It runs clubhouses, bars, shops, supermarkets, launderettes, restaurants, cafés and other facilities on most British military bases and also canteens on board Royal Navy ships.
Commissioned officers are not usually supposed to use the NAAFI clubs and bars, since their messes provide these facilities and their entry, except on official business, is considered to be an intrusion into junior ranks' private lives.
The British Expeditionary Force (BEF) - the greater part of Britain's regular Army - was sent to France and hundreds of thousands of young men enlisted to fight for the King and the country.
The Government was unprepared for the problem of supplying and feeding the forces on a scale never before experienced, so a large Army entered the field with insufficient official provision.
The Head of the society was summoned to the War Office together with the managing director of Richard Dickenson & Co., the soundest and most experienced firm of the canteen contractors.
In March 1920, Winston Churchill, then Secretary of State for War, set up a committee to advise on the kind of organisation which would be needed for the Armed Forces in the future.
As a not for profit organisation, with no shareholders to reward, NAAFI was asked to run the catering and recreational establishments needed by the armed forces.
Six years later NAAFI would have a presence in Bermuda, Ceylon, Germany, Gibraltar, Iraq, China, Jamaica, Malta, and the Middle East.
Petty Officer John Leake, NCS canteen manager onboard HMS Ardent, was awarded the Distinguished Service Medal (DSM) in the 1982 Falklands War for his courage while manning a machine gun.
NAAFI now operates out of bases in British Forces Germany, Brunei, Gibraltar, the South Atlantic Islands and onboard HM Ships through the Naval Canteen Service (NCS).
This includes running the officers' and NCOs' messes, providing the catering service as well as a number of retail outlets, coffee forums, bars and the sale of tax-free cars.