A:

A non-governmental organization (NGO) is a non-profit, citizen-based group that functions independently of government. NGOs are organized on local, national and international levels to serve specific social or political purposes.
As non-profit organizations, NGOs rely on a variety of sources for funding projects, operations, salaries and other overhead costs. Because the annual budget of an NGO can be in the hundreds of millions (or even billions) of dollars, fundraising efforts are important for the NGO's existence and success. Funding sources include membership dues, the sale of goods and services, private sector for-profit companies, philanthropic foundations, grants from local, state and federal agencies, and private donations.

Individual private donors comprise a significant portion of NGO funding. Some of these donations come from wealthy individuals - such as Ted Turner's $1 billion donation to the United Nations, or Warren Buffett's pledge to give 10 million Berkshire-Hathaway class B shares to the Bill and Melinda Gates Foundation (valued at more than $31 billion in June 2006). Many NGOs, however, rely on a large number of small donations (rather than a small number of large donations).

Despite their independence from government, many NGOs rely heavily on government funding in order to function. Some governmental NGO funding may be viewed as controversial because the funding may support certain political goals rather than a nation's development goals.

RELATED FAQS
  1. How does revenue recognition differ between profit and non-profit companies?

    Under the generally accepted accounting principles, or GAAP, for-profit companies recognize revenue as it is earned through ... Read Full Answer >>
  2. Does the federal government fund any NGOs? Which ones?

    A non-governmental organization (NGO) is a non-profit, citizen-based group that functions independently of government. NGOs ... Read Full Answer >>
  3. Do nonprofit organizations pay taxes?

    Section 501 of the Internal Revenue Service (IRS) tax code exempts qualified nonprofit organizations from federal taxes. ... Read Full Answer >>
  4. What does "pro bono" mean?

    The term pro bono is short for the Latin "pro bono publico," which means "for the public good." The term generally refers ... Read Full Answer >>
Related Articles
  1. Economics

    What is UCITS?

    Essentially, UCITS are investment funds regulated by the European Union.
  2. Economics

    What is the Paris Club?

    The Paris Club is an informal group of nations that meet to find solutions for problems facing debtor nations.
  3. Economics

    The Pros and Cons of Being a Nonprofit

    Evaluating the tradeoffs organizations face when choosing between becoming a tax-exempt nonprofit or for-profit business with innovative ease.
  4. Investing

    Baby Boomer Philanthropy Shifts Wealth Adviser Focus

    Wealth advisers who integrate philanthropy and finance planning can stand out with baby boomer clients.
  5. Investing

    The 10 Most Successful Social Entrepreneurs

    These inspiring business leaders successfully tackle global social issues while generating profit.
  6. Investing

    Hybrid Business: Rise of Nonprofits in Private Sector

    Businesses are embracing a mutually beneficial partnership wherein the ideals of the nonprofit sector are coupled with profit motive and capacity to scale.
  7. Home & Auto

    Before you Buy That Home: Find a Great Realtor

    Most people think of a good realtor as a successful salesperson, but we should not assume than that's what makes a great or even a good realtor.
  8. Economics

    Explaining Endowment Funds

    An endowment fund is money set aside to earn revenue to fund some type of charitable activity.
  9. Forex

    Trans-Pacific Partnership Agreement: Pros & Cons

    With President Obama securing fast track authority on the Trans-Pacific Partnership, the benefits for labor and capital can be examined.
  10. Taxes

    Tips on Charitable Contributions: Limits and Taxes

    An overview of the limits and tax deductions of charitable donations.
RELATED TERMS
  1. Endowment

    A financial asset donation made to a non-profit group or institution ...
  2. European Economic and Monetary Union (EMU)

    The successor to the European Monetary System (EMS), the combination ...
  3. National Motor Freight Traffic Association (NMFTA)

    A nonprofit organization representing interstate, intrastate, ...
  4. Guarantee Company

    A form of corporation designed to protect members from liability, ...
  5. Economist Intelligence Unit - EIU

    An organization that provides forecasting and advisory services ...
  6. Investment Counsel Association Of America - ICAA

    A non-profit organization whose members work in the investment ...
Hot Definitions
  1. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  2. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  3. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  4. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
  5. Dark Pool Liquidity

    The trading volume created by institutional orders that are unavailable to the public. The bulk of dark pool liquidity is ...
Trading Center