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While common parlance now, the term nongovernmental organization (NGO) was not officially coined until 1945 when the United Nation's (UN) Economic and Social Council (ECOSOC) clarified its relationship with intergovernmental specialized agencies and international private organizations in the UN Charter. ECOSOC decided that an “international NGO” (INGO) was “any international organization that is not founded by an international treaty.” The UN also determined that NGOs should be given suitable arrangements to be consulted on key issues. The status of NGOs was confirmed in the three conventions arising from the UN Earth Summit in Rio in 1992.

It is important to distinguish between NGOs and not-for-profit agencies. Unlike NGOs—which tend to emerge specifically to address certain issues, offer specific services, or advance a cause—nonprofit agencies may also include other organizations, such as museums, universities, and hospitals, servicebased organizations that are not necessarily independent of government or campaigning for a cause. An NGO should not be mistaken as a social movement per se, despite the fact that it may perform an important functional role within such movements.

The term nongovernmental organization implies independence from government, which often enables NGOs to promote, or expose, activities and events in ways a government cannot. NGOs rely heavily on fundraising, grants, and sponsorships to fund their activities. To some NGOs it is important to maintain financial independence from government at all times; Greenpeace does not accept donations from governments or corporations but relies on contributions from individual supporters and foundation grants. Nonetheless, many NGOs depend in part on government funding. For example, the British government and the European Union donated a quarter of Oxfam's budget (U.S. $162 million) for famine relief in 1998. Medecins Sans Frontieres (MSF) operates with almost 50 percent of its budget coming from government sources.

There are thousands of active NGO organizations operating at local to international scales. According to one estimate, some 37,000 organizations now qualify as international NGOs (with programs and affiliates in a number of countries), up from less than 400 a century ago. Active international organizations include the Red Cross, CARE, and the World Wildlife Fund (WWF). Most NGOs operate within a single country and often function within a purely local setting. Many are essentially neighborhood groups established to promote local issues such as community improvement or street safety.

The 2002 United Nations Development Programme's Human Development Report notes that nearly one-fifth of the world's NGOs were formed in the 1990s. A 1995 United Nations report found that the United States has an estimated 2 million NGOs, Russia has 65,000 NGOs, and that in countries such as Kenya, up to 240 new NGOs come into existence every year. NGOs are significant employers. In 1995, CONCERN, which is an international NGO campaigning against poverty, employed 174 expatriates and over 5,000 national staff across ten developing countries in Africa, Asia, and Haiti.

NGOs have wide scope and appeal. Lesser-known acronyms for the different types of NGOs include: INGO: International NGO; BINGO: Business NGO; RINGO: Religious NGO; QANGO: Quasi Autonomous NGO; and ENGO: Environment NGO. Religious NGOs include Caritas International, the World Jewish Congress, and the International Muslim Union; examples of political NGOs include the Inter-parliamentary Union and Socialist International. There are active cultural groups as well, such as International PEN, a literary organization. The activities of Amnesty International in the human rights field, as well as those of Greenpeace in the field of environmental protection, are well known. Many NGOs, such as the WWF and Friends of the Earth (FoE), investigate issues that affect human and environmental welfare, and often the nexus between the two.

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