The Nonprofit Sector : A Challenge For Nonprofit Management 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

Collaboration among organization members and community stakeholders is very important, we must begin to study and understand nonprofits not merely as organizations housed within four walls but as catalysts that work within, and change, entire systems. The most effective of these groups employ a strategy of leverage, using government, business, the public, and other nonprofits as forces for good, helping them deliver even greater social change than they could possibly achieve alone (Crutchfield, 2012). There is also an understanding that community partnerships and assistance from caring individuals will be of a great benefit to the organization and the young men they serve. The different chapters in the organization are funded through member dues, grants and contributions from corporations, foundations, individuals and combined federal

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 nonprofit sector in America is a reflection some of the foundational values that brought our nation into existence. Fundamentals, such as the idea that people can govern themselves and the belief that people should have the opportunity to make a difference by joining a like-minded group, have made America and its nonprofit sector what it is today. The American "civil society" is one that has been produced through generations of experiments with government policy, nonprofit organizations, private partnerships, and individuals who have asserted ideas and values. The future of the nonprofit sector will continue to be experimental in many ways. However, the increase of professional studies in nonprofit management and the greater

When Zoot Velasco looks at American nonprofits, he sees a sector that is struggling, in spite of limitless potential for innovation and impact. Noting that 22.3% of the country’s GDP is in the nonprofit sector, yet only 20% of such organizations have a budget exceeding $1 million, Velasco hopes to lead a transformation in the industry.

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.

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 tool is sponsored by the United Way of America. This tool is designed for United Way organizations but can be applied to nonprofits for internal evaluation purposes. This tool can be used to: (1) gauge your organization’s current status relative to the Standards of Excellence, (2) identify areas of strength where your expertise could be shared with others; and (3) determine where to focus your organizational development and improvement efforts (“United Way”, n.d.). This tool is marketed towards United Way organizations but can be applied to nonprofits for internal evaluation purposes.

The purpose of this paper is to gain a deeper understanding of the non-profit sector by analyzing a non-profit organization. The organization chosen for this report is SickKids Foundation located at, 525 University Ave, Toronto, ON M5G 2L3.

Over the years, the government has given more responsibility through subcontracts for nonprofits to carry out a range of services for communities. Consequently, nonprofits face major challenges in a constantly changing environment. This type of environment has created a battle amongst other nonprofits as they struggle to obtain similar resources. In this memorandum, the topic of strategy formulation in the not-for-profit area and its application to nonprofits are touched on.

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,

Taking a look at non-profit organizations will breed a sense of familiarity. Five of the most known and recognizable non-profits are National Public Radio (NPR), United Nations Children’s Fund (UNICEF), Human Rights Watch (HRW), Wiki Leaks, and Green Peace. These are all organizations we have come across with familiarity, with maybe the exception of Green Peace. As any avid listener of National Public Radio I can attest to the programs being run on the basis of callers calling in and pledging donations to help keep certain programs as well as the station afloat. Some of these other organizations are also based upon donation interaction, however, to label their financial situation as strictly donation base would be an ignorant train of thought. All of these organizations do a great job acquiring revenue to help the operation of the organization.

diversified portfolios that embody sensible levels of risk in order to achieve strong financial returns” (Fremont-Smith, 2004 as cited in Young n d, p. 2) . While such financial decision-making is a bit more complicated for nonprofits than it is for private firms or individual investors and since nonfinancial impacts of financial decisions often matter to nonprofits, it is also clear why nonprofits have been able to approach risk strategically in the financial area. In particular, the primary metric for success, financial returns. In other areas of nonprofit decision making,

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.

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).