Financial Management In Nonprofit Organizations Essay

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).

Successful management of a not-for-profit organization requires providing high-quality service, but at the same time, careful administration - to reduce expenses and automate processes are ongoing requirements. Each type of not-for-profit organization has unique management needs. For example:

The variety of resources available for financing nonprofits may seem overwhelming and unmanageable, especially to someone looking in form the outside. The publication Financing Nonprofits: putting theory into practice (Young, 2007) addresses not only the variety of resources that are available but also the challenges of managing multiple revenue sources. This paper presents a brief reflection on some of the ideas presented in the publication.

A nonprofit analysis helps nonprofit executives and board members understand their organization’s underlying fiscal health and readiness for change and growth. The analysis is a critical tool for Northeast Health Council planning for program expansion, organizational restructuring and/or realignment, financial and fundraising challenges, new executive and board leadership, a new capital project, or acquisition or merger with another nonprofit organization (such as the local health clinic).

This paper was originally written for Financial Management for Nonprofits 380, taught by Professor Zelhart.

1. Connors, T. D. (2001). The Nonprofit Handbook. New York: John Wiley & Sons, Inc. [US].

Nonprofit organizations have similar financial transactions and needs as for-profit businesses (Viader, & Espina, 2014). Their financial statements describe and summarize operating activities, obligations, and economic resources for a given period, usually one year (Viader, & Espina, 2014). A nonprofit is defined as a legal entity that does not conduct substantial commercial activity or earn a profit as its primary purpose (Viader, & Espina, 2014). The goal of the nonprofit is typically to provide services (Epstein, & McFarlan, 2011). In nonprofit organizations, management decisions are intended to result in furnishing the best possible service given resource constraints (DioGuardi, 2014). Basically, the success of a nonprofit entity is measured

The challenges involved in accounting for charitable activities revolves around many special factors that distinguish the two types of organizations. First, charitable activities are always given to a single set of beneficiaries using resources that are donated by unrelated parties. The stewardship element of financial reporting becomes quite vital because the donor wants to get the assurance that their gift was put to the intended purpose (Burks, 2015). Financial reporting is the conduit through which transparency is created for donors and the nonprofit organization is held publically accountable. It is only through financial reporting that they get the assurance that may encourage them to donate more funds when they find out that their money or resource is put to the right use and managed well (Reheul, Van Caneghem, & Verbruggen,

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).

As a junior in high school, I had the opportunity to travel to Washington D.C. with a nonprofit organization, the Foods Resource Bank. We visited congressional offices and nonprofits in the area, building relationships over critical issues regarding the importance of food sustainability. These few days completely changed my perspective and showed me the power of my own voice. I now see the needs of the world, and how I can affect them, in a different light. In ten years, I intend to find a group of people with which I can take that light to dark places and bring people who are underwater to the shore.

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 have several functions, and not each one is alike. Essential to all non-profit organizations are four functions: planning, budgeting, funding and management.

The main purpose of commercial organization is to earn money for its owners. The NPOs can’t have owners, as this entity is intended to serve the population, and the law clearly defines that the property (with the concomitant extraction of private benefits) is incompatible with serving the public interest. ## So non-profit organization is the organization that has no profit as the main objective of its activity and doesn’t distribute the profits among the participants. This doesn’t mean that non-profit organizations can’t make money, but the money should go to public purposes for which organization was created. These funds can also be set aside for future programs or transferred to other organizations working for the benefit of society. In this way the NPOs can engage business activities: to produce goods and services, acquire and dispose of securities and property and non-property rights, participate in the economic companies and limited partnerships as an investor.

A Non-profit Organisation (NPO) is an establishment that uses its funding for the pursuit of a specific purpose such as for a charitable cause (Lorette, 2015). It is different from a for-profit organisation as its objective is to provide greater good to the society rather than to maximise the wealth of its stakeholders. The surplus revenues of an NPO are used for either its expansion, self-preservation or plans and no part of the profit is distributed to its members. NPOs are increasingly starting to operate like traditional business organisations as strategic planning and marketing is imperative for their survival.