A charitable organization or charity is an organization whose primary objectives are philanthropy and social well-being (e.g. educational, religious or other activities serving the public interest or common good).
The legal definition of a charitable organization (and of charity) varies between countries and in some instances regions of the country. The regulation, the tax treatment, and the way in which charity law affects charitable organizations also vary. Charitable organizations may not use any of their funds to profit individual persons or entities. (However, some charitable organizations have come under scrutiny for spending a disproportionate amount of their income to pay the salaries of their leadership).
The second-hand shop of UFF, a non-profit and non-governmental humanitarian foundation, in Jyväskylä, Finland.
Financial figures (e.g. tax refund, revenue from fundraising, revenue from sale of goods and services or revenue from investment) are indicators to assess the financial sustainability of a charity, especially to charity evaluators. This information can impact a charity's reputation with donors and societies, and thus the charity's financial gains.
Charitable organizations often depend partly on donations from businesses. Such donations to charitable organizations represent a major form of corporate philanthropy.
In order to meet the exempt organizational test requirements, a charity has to be exclusively organized and operated. In order to receive and pass the exemption test, a charitable organization must follow the public interest and all exempt income should be for the public interest. For example, in many countries of the Commonwealth, charitable organizations must demonstrate that they provide a public benefit.
The practice of charity is the voluntary giving of help to those in need, as a humanitarian act. There are a number of philosophies about charity, often associated with religion. Effective altruism is the use of evidence and reasoning to determine the most effective ways to help others.