(a) Nonappropriated-fund instrumentality (NAFI). An instrumentality of the Federal Government established to generate and administer nonappropriated-funds for programs and services contributing to the mental and physical well-being of Department of Defense personnel and their dependents. A NAFI is not incorporated under the laws of any State and enjoys the privileges and immunities of the Federal Government.

(b) Nonappropriated-funds. Funds generated through the use and patronage of NAFI's, not including funds appropriated by Congress.

(c) Employees of NAFIs. Personnel employed by NAFIs whose salaries are paid from non-appropriated funds.