Financial Sustainability And Its Effects On The United States

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

Multiple non-profit organizations have to rely on what’s called a grant. Foundations, corporations and government agencies help out with the fundraising efforts for the non-profit organization. Grants can be used for multiple purposes from supporting online fundraising that you created to crowd-funding. Grants can be from a few hundreds of dollars to millions of dollars. The amount depends on the source and the purpose of the grant. Receiving a grant is a different process than just receiving a donation from an individual. Non-profit organizations most of the time need to fill out a request and send out to what’s called a grantor. Non-profit organizations can help the organization grow, help the organization reduce risk and can come

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

Most nonprofit agencies follow the same management structure. The structure normally consists of a vertical hierarchal structure with the chief executive manager at the helm, and divisional leaders rounding out the strategic leadership team. Since 9/11, then government shutdowns, multiple wars, natural disasters, and the government sequester, the challenge to most nonprofits is to compete for every available charitable dollar. Chief Executive Officers (CEO) of nonprofits must not only be skillful in maximizing the outcomes with fewer dollars, but also politically savvy in vying for monies for federal, state, local, foundation, and private funding sources.

The major economic forces that have affected and will continue to affect nonprofits’ liquidity are economic growth, consumer confidence, equity, housing and credit housing market conditions, as well as present and future local, state, federal and global economic policy (Zietlow, 2010).

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

I interviewed three nonprofits located in the San Francisco Tenderloin Neighborhood. These non-profits varied in staff size, budget, and services they provide, but serve similar communities. The communities these organizations serve connect them as a network. However, they are fairly interdependent of each other, therefore the organizations are only loosely coupled (Perrow, 1972, p.196). Based on my interviews, the organizations shared similarities in influences that affected adaptations to their environments. However, their coping strategies varied in their adaptation. Variables that influenced the life cycles and the success of these particular non-profits were securing organizational funding, investing in staff leadership, and responding to political environments.

Kingma (1993) discusses for a nonprofit organization, an increase in its financial risk, for a given level of expected revenues, is undesirable. A manager in a nonprofit organization who risks the expense of requesting funding from a particular revenue stream and perhaps the expense of promising additional services also risks not receiving the additional expected funding. For donations, a nonprofit organization risks fundraising expenses. For government revenues, a nonprofit organization risks the expenses of complying with government standards (p-106). At this points, without existence of competent staff, supportive policies, internal systems to manage assets and financial, will the organization be

A nonprofit organization is one that is tax-exempt and serves the public’s interest. Their purpose must be charitable, educational, scientific, religious, or literary. The organization does not declare a profit, instead uses all the revenue available after standard operating expenses in serving the public interest. The individuality of nonprofit organizations is not obvious, possibly they are no different from private organizations; they are influenced by business motives and opportunities for ambition just as private organizations. Nonprofits are not independent of private enterprise or the government. Nonprofits compete and collaborate with other organizations in many ways in order to finance theorganization, develop markets for

Effective and sustained leadership is vital to the success of the nonprofit agency. Leadership and leadership development can occur in small ways, but there is much is still much work to be done because of the growth of the nonprofit sector and the complexity of challenges addressed. A nonprofit organization can monitor and demonstrate effort, but measuring the impact of that effort is more challenging. As nonprofit organizations and their leaders look to the future, there are opportunities as well as challenges associated with these trends that we will explore more in depth to help myself and my nonprofit organization succeed (Bono, 2003, p557).

This book, starting out with a realization that the nonprofit institution has been America’s resounding success in the last forty years, clarifies the revolutionary achievements in nonprofit sector. Peter F Drucker thinks the nonprofit sector is growing expeditiously; as a result, managing organizations with sound missions, leaderships, advertisings, is vital in terms of the surviving and thriving of the organizations growing at speed. In the book, he illustrates comprehensively

In our great nation, nonprofit organizations have played a critical role in helping people in need by providing education, training, residences, counseling, and in‑kind and cash support. Our nations has called upon nonprofit agencies, to take the leading role in American society in addressing social problems. Their belief in the efficacy of nonprofits combined with the current political and financial constraints on government spending, suggests an even larger service role for nonprofit organizations. We know that politics is complexed in its operating environment. There is a real danger when we choose to ignore the complexity of government and how it

A non-profit organization cannot be effectively managed if it is not effectively planned. One of the challenges facing non-profit organizations has been long range, strategic planning. Long range, strategic planning in the non-profit sector is essential to the success of an organization. Long range, strategic planning encompasses broad policy and direction setting, internal and external assessments, attention to key stakeholders, the identification of key issues, development of strategies to deal with each issue, decision making, action and the continuous monitoring of results. (Herman, The Jossey-Bass Handbook of Nonprofit Leadership and Management, 154) While it is important to deal with the short term planning and activities of non-profits, managers or directors must consider the future of their organizations. Successful planning should be comprehensive, integrating all areas of responsibility of an organization.

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).