Nonprofits have been broadly defined as voluntary organizations formed to fulfill a social mission or public benefit. Such organizations generally are formed by individuals in a community who join together to serve clients or the community.

Although many organizations are formed at the grassroots level, nonprofit organizations make up 5% of the gross domestic product of the U.S. For the most part, they receive funding from sources other than their clients. Accordingly, they are accountable to those resource providers for stewardship of the funds they receive.

In addition, nonprofits are accountable to a variety of regulators, standard setters, advocacy groups and selected professional groups. Thus, in addition to being responsible for managing the delivery of services, the management of these organizations must continually be alert to the needs of society.