Page 3 - SPLS104_Obery.A_Assessment Task 1

In contrast, a non-profit organization is an organization that is not driven by making a profit but is

instead driven by furthering a cause or providing a public benefit (Kenton, 2020). A non-profit sports
structure is therefore a sports organization, such as a sports team, that operates with the motive of
not making a profit but to just provide the opportunity for the public to participate in that sport,
whether that be playing or spectating. In fact, most sports structures are non-profit and this includes
sports clubs, leagues, and federations, such as the South African Ice Hockey Federation (SAIHF),
which is the national governing body for ice hockey in South Africa, and even larger federations such
as the South African Football Association (SAFA), the national governing body for soccer in South

Africa. Non-profit organizations can still make a profit and in a lot of cases they do, but it’s their
motive that is considered. As previously stated, a non-profit organization’s motive is not to make a
profit, but to provide a service to its members and the public and therefore any profit that they do
make, is used to grow the organization. Their primary sauce of income is from donations, grants, and

sponsorships, and in the case of a sports club, most of their income comes from membership fees
(Meaning, Characteristics and Accounting for Non Profit Organizations, n.d.). The disadvantages of a
non-profit organization are that they can fall into a situation where they do not have enough funds.
This can also result in low pay for its members and a slow growth rate of the organization. An
advantage of a non-profit organization, on the other hand, is that they are more likely to receive
various grants, donations, and sponsorships from the public or other businesses. They also allow you
to contribute to a cause and do good for the public or a certain group. The biggest advantage they

have in my opinion is the fact that they are exempt from paying tax (Adhikari, 2020). Their greatest
benefit is one of the reasons professional sports clubs should be questioned about whether or not to
give up their non-profit status.

The major difference between a for-profit and a non-profit organization is their motive, which is to
generate a profit, for a for-profit versus to contribute to a cause without the purpose of generating a

profit, for a non-profit. For-profit organizations also operate however they see fit, whereas in the
case of non-profit organizations, the government and donors expect them to use their money for a
cause and they generally have to report how they use their money (Kokemuller, 2019). It’s also a lot
easier for non-profits to receive donations and grants, which is where most of them get the majority
of their income from, whereas for-profits make the majority of their income off sales. Non-profits
also do not distribute their income amongst their owners, however, for-profits do (What is the

difference between nonprofit and for-profit companies?, n.d.). A big difference between non-profit
and for-profit organizations is that a non-profit is exempt from paying tax while for-profits do pay tax
on their profits.