Because so few ordinary users (38% according to Pew Research Center) realized that many of the highest placed "results" on search engine results pages (SERPs) were ads, the search engine optimization industry began to distinguish between ads and natural results.[citation needed] The perspective among general users was that all results were, in fact, "results." So the qualifier "organic" was invented to distinguish non-ad search results from ads.[citation needed]
Well, yes and no. Sure, you can get hit with an algorithm change or penalty that destroys all your traffic. However, if you have good people who know what they are doing, this is not likely to happen, and if it does, it is easy (in most cases) to get your visits back. Panda and Penguin are another story, but if you get hit by those it is typically not accidental.

Clients often ask me the difference and I give them a simple answer that normally puts an end to the conversation and their questions, much like the answer shane thomas gave, but less detailed.  Direct is people putting in your url in the top and organic is people searching for you.  Here is an example: If I want to buy a book i type in amazon.com (direct traffic) but if i forgot where to buy a book online i search for "where to buy a book online" which directs me to amazon.com (organic traffic).  When i explain it like this, a light bulb goes off and they understand.  Hope that helps.
You also should not underestimate the impact that organic search can have on the success of your website. Our research here at BrightEdge has found that about 51 percent of the traffic on the average site comes from the SERPs. In other words, more people land on your site because of the results pages for particular queries than because of your email, social media, and paid marketing efforts combined.
Movies: a great movie experience gets people talking about it + public relations (TV show appearances or for example, People naming Gwyneth Paltrow the most beautiful woman in the world when Iron Man 3 came out). Advertising just helps to spark word of mouth. The point is to spark word of mouth, because people don’t often see movies alone. They take their family, friends or a date. Those people will base their decision either purely on their recommendation, or by going online and looking for a preview or reading about it, which is also organic marketing. The difference is this: paid advertising will only get the movie so far; organic marketing is what will multiply sales. Money only buys the ad spot, it doesn’t guarantee a return on that ad; the quality of the ad and the storytelling in it is what makes it effective or not.
On October 17, 2002, SearchKing filed suit in the United States District Court, Western District of Oklahoma, against the search engine Google. SearchKing's claim was that Google's tactics to prevent spamdexing constituted a tortious interference with contractual relations. On May 27, 2003, the court granted Google's motion to dismiss the complaint because SearchKing "failed to state a claim upon which relief may be granted."[67][68]

Retargeting: Each platform offers retargeting to help you reach people who’ve already visited your website. The benefit of retargeting is that a conversion is more likely when you know the prospect is interested. You might also upload an email list and use Facebook Custom Audiences to serve ads directly to subscribers. In the following example, we see two ads that show in the Facebook sidebar to reach former web visitors.
Cost and Sustainability. While it’s not totally free and easy, SEO can be more cost-effective in the long run as it will give you a targeted and relevant results that you are aiming for your business. With regards to sustainability, even with the smallest of a budget, you can still develop a plan that will still give you the quality of results and still keep the traffic that your business is getting.
Organic is what people are looking for; the rest of these simply put things in front of people who may or may not be seeking what you offer. We know that approximately X number of people are looking for Y every day. So if we can get on front of those people, we have a much greater opportunity to create long-term relationships and increase our overall ROI.
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