Financial Mgmt in Nonprofit
Financial Management in Nonprofit Organizations - Discuss financial management in nonprofit organizations and write an essay that compares and contrasts the application of financial management techniques in nonprofit and for-profit organizations. Sources of funds, use of debt, performance evaluation (efficiency in use of contributions and meeting the organization’s objectives), governance mechanisms in non-profits, etc. would be good topics/issues for discussion in the essay.
In order for any organization to be successful, it is imperative that a very strong financial management program exists and be managed properly. In nonprofit organizations, a strong financial management program is the most critical step in success of the organization. Before we can discuss why a financial management program is necessary in a nonprofit organization, I must first define what a nonprofit organization (NPO) is. A Nonprofit Organization is a tax-exempt organization that has been put together with a common goal and/ or purpose in mind. This organization is formed to provide service to the public without obtaining or making a profit. In order for an organization to be classified as a nonprofit it must be charitable, religious, educational or scientific. Nonprofit Organizations do not distribute excess funds to its shareholders or owners, instead they reinvest all surplus funds to the organization in an effort to continue meeting and pursuing its goals and missions. "Legally, a nonprofit organization is one that does not declare a profit and instead utilizes all revenue available after normal operating expenses in service to the public interest. These organizations can be unincorporated or incorporated. An unincorporated nonprofit cannot be given federal tax-exempt status or the designation of being a 501(c)(3) organization as defined by the Internal Revenue Service. When a nonprofit organization is incorporated, it shares many traits with
In order for any organization to be successful, it is imperative that a very strong financial management program exists and be managed properly. In nonprofit organizations, a strong financial management program is the most critical step in success of the organization. Before we can discuss why a financial management program is necessary in a nonprofit organization, I must first define what a nonprofit organization (NPO) is. A Nonprofit Organization is a tax-exempt organization that has been put together with a common goal and/ or purpose in mind. This organization is formed to provide service to the public without obtaining or making a profit. In order for an organization to be classified as a nonprofit it must be charitable, religious, educational or scientific. Nonprofit Organizations do not distribute excess funds to its shareholders or owners, instead they reinvest all surplus funds to the organization in an effort to continue meeting and pursuing its goals and missions. "Legally, a nonprofit organization is one that does not declare a profit and instead utilizes all revenue available after normal operating expenses in service to the public interest. These organizations can be unincorporated or incorporated. An unincorporated nonprofit cannot be given federal tax-exempt status or the designation of being a 501(c)(3) organization as defined by the Internal Revenue Service. When a nonprofit organization is incorporated, it shares many traits with