When it comes to nonprofits, the terms "association" and "organization" are often used interchangeably. However, there are some critical distinctions between the two.
The main difference between an association and an organization is that an association is an organized group formed to represent a specific group of people, while an organization is commonly registered as a legal entity with particular functions, goals and activities.
What is an Association?
An association typically refers to a group of people with something in common, such as a profession, trade, or hobby. For example, the American Medical Association (AMA) is a professional association for physicians, while the National Rifle Association (NRA) is a trade association for gun manufacturers. Both associations lobby on behalf of their respective memberships.
What is an Organization?
An organization, on the other hand, is a type of business entity that is created for a specific purpose. Organizations can be either for-profit or nonprofit. Nonprofit organizations are formed to further a charitable or educational purpose. Examples of nonprofit organizations include charities, foundations, and schools.
Differences between Associations and Organizations
Purpose
The main difference between an association and an organization is the purpose of its existence. An association typically exists to provide a network of support or resources for a specific group of individuals. At the same time, an organization serves a more comprehensive goal-oriented purpose and may be formed to achieve certain objectives.
Structure
Another key difference between associations and organizations lies in their structure. Associations usually have a member-driven focus and are managed by members who democratically elect officers to oversee the organization. On the other hand, organizations may be more hierarchical, with management decisions made by appointed staff or boards of directors.
Funding
A third difference between associations and organizations is the source of their funding. Associations are typically funded by membership dues, corporate sponsorships or donations from the general public, while organizations may be funded through grants, fundraising activities and government contracts, among other sources.
Legal Entity
Lastly, associations and organizations differ regarding the legal recognition they receive. Associations are usually not considered legal entities, while organizations may be established as nonprofit corporations or limited liability companies, depending on their purpose and structure. Thus, organizations have greater access to specific financial resources than associations do.
Comparison Table: Association Vs Organization
| Specifications | Association | Organization |
| Definition | A group of people with something in common | Type of business entity that is created for a specific purpose |
| Purpose | Provide a network of support or resources for a specific group of individuals | Achieve certain objectives |
| Structure | Member-driven | More hierarchical |
| Funding | Membership dues, corporate sponsorships or donations | Grants, fundraising, government contracts, among other sources |
| Examples | Trade unions, music clubs, alcoholics anonymous | Schools, companies, governments |
Similarities between Associations and Organizations
Both associations and organizations have the same end goal: to achieve a common purpose. These goals can involve anything from providing a service that benefits society, advocating for an important cause, or advancing an industry. Regardless of the mission, associations and organizations rely on members to function correctly.
Frequently Asked Questions
Is an association an organization?
An association is a relatively unique type of organization. An association can be defined as a group of people who come together in pursuit of a common interest or goal. Associations typically have members who pay dues and participate in activities related to the association's purpose.
What is the difference between a nonprofit and a for-profit organization?
The main difference between a nonprofit and a for-profit organization is the purpose of its activities. Nonprofits are usually organizations whose primary goal is to benefit the public or provide social services. In contrast, for-profit organizations are businesses designed to make money by selling products or services.
How can I start an organization?
Starting an organization can be a daunting task. You need to decide on the type of organization you want to create, find people to help you with the venture, and ensure that your organization meets all legal requirements.
Conclusion
While the terms "association" and "organization" are often used interchangeably, there are some critical distinctions between the two. An association typically refers to a group of people with something in common, while an organization is a business entity created for a specific purpose. Additionally, associations focus on lobbying for their memberships, while organizations have a particular purpose or mission.
