What is the difference between a not-for-profit and a non-profit organisation?

Non-profit and not-for-profit mean the same thing

In Australia, there is no legal distinction between a “non-profit organisation” and a “not-for-profit organisation.” They are different words for the same type of entity. However, in regulatory and legislative contexts, Australian bodies — including the ATO and the ACNC — consistently use “not-for-profit” as their standard term.

Other terms used to describe the sector

Several other terms describe these organisations or the sector they belong to:

• NFP — not-for-profit
• NGO — non-governmental organisation (commonly used in international development contexts and by bodies such as DFAT, though also applied to domestic organisations operating independently of government)
• NPO — non-profit organisation
• NPI — non-profit institute
• For-purpose — an alternative framing emphasising mission over legal structure
• Third sector, civil society, community business, social-benefit — broader sector descriptors

The term “non-profit” is also written without the hyphen as “nonprofit.” In most cases, these terms are used interchangeably.

Legal terms are different

These general sector labels should not be confused with legal terms that carry a specific registration status and government approval. These include:

• Charity — registered with the ACNC under the Charities Act 2013
• Public Benevolent Institution (PBI) — a subtype of charity, also registered through the ACNC
• Deductible Gift Recipient (DGR) — endorsed by the ATO, allowing donors to claim tax deductions

These terms should not be used to describe an organisation unless it is legally registered as such.

Which term is “correct”?

Both non-profit and not-for-profit are widely used. While some Commonwealth Government departments have historically used both interchangeably, Australian regulatory bodies and legislation now predominantly use “not-for-profit.”

At Better Boards we prefer “non-profit,” but we allow for the terminology preferences of our contributors, so “not-for-profit” does appear in some articles on this site.

The broader point is that Australia’s non-profit sector is large and varied — covering everything from charities and churches to sporting clubs, trade unions, cooperatives, and community organisations.