Different Views of the Comparison Between Non-profit and For Profit Organizations

As Oxfam, being a not for Profit Company there is lots of advantages and disadvantages. One of them is that Oxfam has lots of opportunity to assist the community for example funds and volunteer work. Oxfam is a tax exempt meaning that they do not have to pay any tax. Also, registered non-profits have limited liability under the law when it comes to dept. the owner of the business are not responsible for the business debt. Non-profits also have access to government-sponsored and loans. A disadvantage of Oxfam being a not for profit is that the Fund development and fund-raising can be a challenge, particularly during an economic downturn and when unemployment rates are high.

According to Daft the main difference is that for-profit organizations’ bottom line is to earn money, while non-profit will focus on social impact (p.13). Therefore, the key stakeholders’ expectations would be within the increase profit and market position of their organization. In contrast, regarding the non-profit organization the expectations are parallel to diversity of the stakeholders. For instance in the case of the Salvation Army, the volunteers, customers, donors, and government agencies, will have different expectations of the organization, while the leadership would balance those expectations to achieve the non-profit goals.

This paper will discuss about organizational structure, philosophies and business practices of for-profit healthcare organizations and non-profit organizations. The most essential dissimilarity between nonprofit and for-profit organizations is the reason they exist. As for-profit organization in healthcare, they are generally found to generate income for entrepreneurs and their employees. However, nonprofits are generally found to serve a humanitarian or environmental need. Furthermore, nonprofits an organization does not pay property taxes due to a consideration of a charity and they establish a certain community in agreement with state and federal

In 1986 for-profit hospitals had a higher market power but non profit hospitals increased after 1986. In nonprofit hospitals, there is a higher frequency of treatment of patients who are uninsured so the care given is mostly uncompensated. This is also similar in forprofit hospitals although with a bit lower frequency. Nonprofit hospitals are associated with government institutions, which provide quality care than demanded. They are almost similar in providing quality healthcare although there is a slight higher quality in non-profit hospital. Non profit hospitals are required to report on the benefits provided to the community (to the tax department) but, for for-profit, it is not a requisite. If Non profit hospitals seek permission they will be exempted from paying taxes. The organizationgrants the permission if the hospital is operating for non profit purposes.

receive donations which is the lifeblood of an charity or non-profit. This paper will discuss the

Whereas a not-for-profit healthcare provider, cannot share their profits with any shareholders since they receive a tax-exempt status as long as their services are towards the members of the surrounding communities and are following a stricter set of rules and regulations. Non-for-profit healthcare providers are also seen as a voluntary healthcare organization and are known for providing charity care, especially to those that are uninsured.

For-Profit versus Non-profit entities in relation to healthcare organizations, both have similarities and differences within their healthcare concept. Therefore, one needs to analyze key components of both health care entities.

The White Paper released by the Camden Group and presented for review by the contributing authors (Rebecca Bales, Kelly Tiberio, and Tara Tesch) offers a perspective from one of the nation’s leading Health Care advisory firms. The paper brings to the forefront the characteristics of Non-Profit and for-profit hospitals, and the outlook for conversion from one industry classification (Non-Profit into a For-profit) business entity. Contained within the paper are a wide-range of topics with regards to the similarities between the two health care models, laws and regulations from both the State & Federal levels that guide their respective classification, market outlook for the health care industry and case studies that highlight the impact of actual conversion from Non-profit to For-profit hospitals from an industry standpoint. The health care is a challenging and competitive environment, therefore the paper focuses on providing insight on a strategy based on adapting from one business model into another in order to remain competitive.

Not for profit organisations consist of organisations that are not run for the profit or personal gain of individual/s. They are often referred to as charities and provide benefit services to society, often encouraging people to band together by sharing resources to achieve a common goal. Profits can be obtained by these organisations but must applied for the organisations purposes. These organisations include Surf life-saving, Churches, and Salvation Army etc. (Sessoms, 2014).

Stakeholders play a critical role in the management and decision-making process of an organization. An example of a stakeholder includes employees, managers, patients, vendors, suppliers, the community, creditors, customers and the government (Daft, 2013). Also, Daft (2013) says, “Stakeholders are groups “within or outside of the organization that has a stake in the organization’s performance” (p. 23). There are a few differences surrounding stakeholder expectations between non-profit and for-profit organizations. The differences in nonprofit organizations and for-profit business organizations are the direction of activities for the end goal (Daft, 2013). Although it is very difficult to measure the impact that a nonprofit has on society, community, or a particular group as opposed to evaluating an income statement from a for-pro-profit organization. The same level of attention should be paid to stakeholder for nonprofit organizations as stakeholders of for-profit organizations.

Disadvantages for non-profit hospitals is they are not owned by anyone; meaning that some non-profit hospitals may not be able to afford all of the latest technology or sometimes offering the cost-effective services when operating in lower-income areas. Non-Profit hospitals have “higher operating costs because of a high amount of uncompensated care and the charitable component of their operations” (Kovner & Knickman, 2008).

Non-profit hospitals are hospitals that are not charged state and local property taxes. They are affiliated with lower income populations and people who not all of the time have insurance to cover their health care. Non-Profit hospitals are considered charitable hospitals but can sometimes make out to be a million dollar hospital depending on the location and type of facility that is being owned. Not for profit hospitals are publically owned primarily by privately owned hospitals known as “for-profit” facilities.

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

A not for profit organization is a corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive (Legal, 2013).” There are immense community benefits as a not-for-profit generally accepts everyone regardless of ability to pay. Nonprofit organizations are granted tax-exempt status which helps them to provide services to the public and are expected to be effective managers of their finances as well as being efficient (Financial Management, 2010). In doing so, they can gain exemptions from federal and state incomes taxes and have the ability to solicit tax-deductible contributions (Financial Management, 2010). Organization must follow legal financial

Any company aim is to increase the profit for the share holders, receive dividend (distribution of profits) in order to invest again or issue shares (selling part of the capital, method mainly used by big business to avoid asking bank loans and have liquidity – cash flow), take bank loans, while non for profit organization aim, is not to gain profit or save money but to spend for social purposes, explaining how the money was spent. There are four main types of charities structure; Charitable incorporated organization, Charitable Company,