Not For Profit Organizations

According to Charities & Organizations, non-profit hospitals provide greater proportions of uncompensated care than for-profit hospitals. Uncompensated care is not carried by all nonprofit hospitals. Nonprofit and for profit hospitals are different and offer different types of services .Services like high-level trauma or intensive care burn wards are

The purpose of this paper is to conduct a comparative analysis between for-profit hospitals and not-for-profit hospital. It will discuss the characteristics of each as well as factors affecting the operations of both systems. Additionally, it discusses potential areas of improvement and some of the challenges associated with each relative to finance and operations.

Nonprofit hospitals have become a common characteristic of the hospital sector because they can be found across the country because of their presence in almost every corner, they never decline to provide treatment, and offer several community-based health programs. On the contrary, the for-profit health facilities are regarded as the corporate model of health care services as they seek to make profit first. They enjoy huge capital that enables them to develop state-of-the-art facilities and purchase the latest clinical technologies.

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).

The debate over non-profit versus for-profit healthcare organization has been ongoing, does one provide better care than the other? Do the operations of for profit perform better than the non-profit organizations? Are the criticisms about for-profit organization validated and is there proof? The goal is to examine those questions as well as offer options to improve the financial and operational performance of non-profit and for-profit organizations criticisms.

The debate on whether all healthcare institution should be non-profit rises many issues and they have been heavily debated. The best way to examine this to analyze if non-profit hospitals are in fact better that for

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.

Most understand the cost of medical services is expensive, so why not combine the best of both types of ownership. Non-profits heart for the community with for-profit’s business acumen. While the care in both may mirror each other, the culture driving decisions is different. The big question is what to do with the profits? Invest back into much needed community programs and outreach? On the other hand, payout as dividends to shareholders? Anecdotally speaking, a large percentage of citizens, and health care providers would more than likely want to spend profits on programs, research, learning and

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).

NFP hospitals are structured as tax exempt corporations., typically under the Internal Revenue Code, section 501c3. The Advisory Board explains the key characteristics of NFP hospitals as:

For-profit hospitals rely on their owners in order to function. The hospital can decide what medical service is provided based on effectiveness. For-profit hospitals are focused on the money rather that the individual's health.

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).

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 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

Non – profit organization- organization whose goods do not include making profit for each owner. These organizations do not strive for making profit in case if these organizations profit again is invested welfare of the society.