All economic activity is based on exchange. A person or organization provides goods or services that others need. Profit is the label we give to positive exchanges which contribute to long-term sustainability of the organization. Non-profits are misnamed. They need to make a profit as much as any other type of organisation, because they must take in more money than they give out. The main difference is that the clients they serve are different from the source of their funds. An organization may provide shelter for the homeless, but they get their funding from elsewhere (the government, perhaps, or a philanthropic outfit). Since their funding must exceed the cost of providing their services, which is the essence of what profit is, non-profits are more accurately called "indirect client organizations". For-profit organizations might be called "direct client organizations". A bakery that bakes bread for its customers, and whose profit comes from those same customers, would be an example of such an organization. --- Related: [[We often define something in reference to something it is not]]