Nonprofit Organizations: Non-Profit Research

ReferencesRobert D. H. & Associates (2005). THE JOSSEY-BASS HANDBOOK OF NONPROFIT LEADERSHIP & MANAGEMENT (2nd ed.). San Francisco, CA: John Wiley & Sons, Inc.

The diversity of nonprofit organizations, services provided and the problems faced shows that nonprofits require leadership with an in-depth understanding of the multifaceted nonprofit landscape. Understanding the culture of nonprofit work is also crucial and much easier to understand once you have been through a nonprofit management program. My career interests lead me towards an avocation of a deeper knowledge of strategic management/planning, legal structure and standards, increase my skills in quantitative analysis of policy, financial governance and developing fundraising strategies. These areas allow for macro management within the nonprofit

According to our text, “Not-for-profit organizations lack a residual ownership claim and the organization’s purpose is something other than to provide goods and services at a profit.” “Because significant resources are provided to governments and not-for-profit organizations, financial reporting by these organizations is important.” (Page 2).

At the center of any successful nonprofit organization there is an effective chief executive and board of directors. These leaders must work as a team with a vision and specific skills, to effectively produce resources in order to accomplish the organization's goals. The majority of the decision making authority and leadership is shared amongst board members; however, critical management skills and day-to-day operational decisions rest within the authority of the chief executive. However, members of the board must also be sufficiently skilled in management in order to assess the work of its director to assist in the implementation and evaluation of strategic decision making.

Independently if the organization is not-for-profit or for-profit, a vital duty of the management team is to keep the organization finances in a status that allows it to operate, and produce a level of revenue that secure its existence over the years. To reach these objectives, managers must perform key functions that involve planning, decision

Net assets are defined as “the difference between an organization’s assets and liabilities.” For nonprofit organizations, net assets are related to an organization’s ability to borrow funds. Tuckman and Chang (1991) found nonprofit organizations less likely to alter their programs and mission, following a financial shock, if they can leverage their net assets. An operating margin, or surplus, is “the difference between an organization’s revenue and expenses, divided by its total revenue.” A Nonprofit organization holding a great surplus can readily operate at a reduced surplus following a financial shock – allowing it not to alter any programs. The third factor for nonprofit financial vulnerability is revenue concentration. Revenue concentration is “the proportion of income an organization receives from its various sources of revenue.” Nonprofit organizations who receive many sources of revenue can better withstand the impact of a financial shock than those with little sources of revenue. After a financial shock, nonprofit organizations, along with all businesses, will try to cut down expenses. Woronkowicz (2016) states “administrative costs are preferred to those to program

This paper will examine budgeting procedures for profit and non-profit businesses and compare similarities, and if they exist, differences in accounting practices. This paper will also attempt to review what is Generally Accepted Accounting Procedures (GAAP) for budgeting for any organization to be successful.

Nonprofit Organizations The purpose of this research is to define nonprofit organizations, describe opportunities that are present in nonprofits, outline advantages and disadvantages of working in the nonprofit sector, and explain how you can determine if this is an area for you to consider as a career. WHAT IS THE NONPROFIT SECTOR? "Nonprofit" is a term that the I.R.S. uses to define tax-exempt organizations whose money or "profit" must be used solely to further their charitable or educational mission, rather than distribute profits to owners or shareholders as in the for-profit sector.

Among all nonprofit organizations existing, including Public Charities, Foundations, Professional and Trade Organizations, Social Advocacy Organizations, the Trust as a nonprofit seems to be the most viable. Indeed, charitable trust is the first legal form of nonprofit organization (Hopkins, 2013). Its creation usually involves financial services and investment Management Company that stands as its pillar. In this form of nonprofit, the administrator uses trust to fulfill charity purposes. In this logic, we distinguish three types of charitable trusts, which are the charitable remainder, the pooled charitable trust and the charitable trust (Hopkins, 2013).

The financial environment for not for profit organizations can be understood by their name and objective. They

Non-profit organizations do not belong to the commercial sector or the public sector, but occupy an intermediate position. It gives

Financially healthy nonprofits use income-based, rather than budget-based spending which allows them to have income projections that are realistic and helps to determine realistic costs (Zietlow, Seidner, 2014). The most successful nonprofit should have an operating reserve to finance shortfalls and hopefully allows them to have a positive cash flow at the end of the year (Zietlow, Seidner, 2014). However, most nonprofit organizations fight to manage cash flow due to how income and the expenses often may occur at different times, so that there may not be enough cash to pay for the expenses as they become due and payable (Zietlow, Seidner, 2014).

Hence, financial management is vital for all types of organizations, profit making as well as non-profit making. In case of non-profit making organizations also the effectiveness and performance depends on their financial resources management. Financial Management = == ==

How the Chief Executive Officer (CEO) or Executive Director (ED) and the board of directors address their responsibilities to the nonprofit organization determines the quality of their leadership and the level of determination in their service to achieving the nonprofit’s mission. While the Free Software Foundation (FSF) makes their financial information publically available (FSF, 2015), an extensive search so far reveals that their attempts at transparency extend neither to examples of oversight of management by their board of directors and executive staff, such as formal written assessment of the CEO or the a self-assessment of the board’s performance, nor to written agreements regarding the

Strategic financial management calls attention to financial matters that encompass an organization’s mission, objectives and goals. When working in the nonprofit sector, there are many financial challenges faced by the leadership and the board of directors. An effective board of directors, along with the organizations’ finance committee will work together to develop an annual operating budget, in addition to monitoring internal controls. These internal controls include the process of achieving financial goals and objectives, producing reliable reports and remaining compliant with rules, regulations and policies that have been established. The oversight and guidance provided by the board and finance committee provides transparency and accountability to the nonprofit and should be a strong indication that the organization is committed to good stewardship.