...society and human necessities. Nonprofit organizations function on responsibilities to society, profit organizations function on responsibilities to themselves. Nonprofit organizations foundation is the “pluralistic theory, it means that a mosaic of agencies try to meet the needs”, of others. Citizens view themselves as benevolent and truly care for others, their needs, and are ready at moments’ notices to assist with solving their basic needs. Charity dates back to the new world in New England as religious missions, and the people providing the services were referred to as overseers of the poor. The overseers sought basic necessities of life to allow the needed short term relief during distress of the poor. The public view of nonprofit organizations is a complex sociological concert and is a solid foundation of real return of resources. Nonprofit organizations have interactions with mutual benefits and it structure (“History and Theory” 2010). GOVERNANCE “Governance in South Africa” (2013) defined governance as the act of governing, it is what governing bodies do (govern). Governance deals with decisions which defines expectation, validates performance or awards power. It is a portion of the decision making process or the leadership process. Governance deals with the quality of governance within an organization and is compared to standard of good governance. When speaking of nonprofit organizations governance looks at management, intransigent policies, and responsibilities...
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...Financial Management for NPO I. Introduction “Ten years ago, management was still a dirty word for those involved in nonprofit organizations. Nonprofits prided themselves on being free of the taint of commercialism and above such sordid considerations as the bottom line… Today, nonprofit organizations have learned that they need management and leadership even more than business does…” (Montana and Petit, 2009) The years when “management” was a prohibited word in nonprofit organizations are long gone. Nowadays, nonprofit leaders are starting to realize what an essential role financial management plays in NPOs. Moreover, as the number of nonprofit organizations around the world keeps rising, more nonprofit leaders and managers have aimed to develop their skills in financial management. As a matter of fact, the nonprofit sector is one of the fastest-growing sectors around the world: just in the United States there are 1.5 million nonprofit organizations and growing, employing one in 10 American employees. In this paper, we will look at: 1) the financial management process, 2) the importance of financial management for nonprofit organizations, 3) financial management for nonprofits organizations. II. What is Financial Management? One of the most accepted definitions of financial management was given by Kuchal, stating that “Financial Management deals with procurement of funds and their effective utilization in the business” (as cited in Paramasivan & Subramanian...
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...Studies There are many forms of health care organizations, they are grouped by their financial structures, and sources of funding. The three types that exist in the United States are for-profit, non-profit, and government funded organizations. The financial resources and how profit is appropriated are different amongst all three types of organizations. Government Funded The most well-known government funded health care system is the Department of Veterans Affairs. This health care system is unique in that it was created specifically to treat American veterans of the US military, whereas for-profit and non-profit organizations must treat every patient regardless of status, or ability to pay. A person who served in the active military, naval, or air service and who was discharged or released under conditions other than dishonorable may qualify for VA health care benefits ("Office of Public and Intergovernmental Affairs", 2014). Many diseases and permanent disabilities or service-connected disabilities, US veterans suffer from were acquired serving in wars both past and present while serving this country. It is the governments’ intention to help treat those who so bravely laid their life on the line to serve and protect this country. On that note, most military are eligible to be treated within this health care system for little to no cost, with very few not meeting eligibility requirements. There are still however financial assessments as to how much a veteran makes and...
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...Executive Summary Nonprofit organizations (NPOs) play a major positive role in all economies and societies that they service. These organizations have helped millions of people around the world by providing a great deal of valuable assistance and support via educational, scientific, charitable, legal, and many other means. An NPO is “a group organized for purposes other than generating profit and in which no part of the organization's income is distributed to its members, directors, or officers” (law.cornell.edu). Types of NPOs include volunteer service organizations, public charities and schools, public clinics and hospitals, political organizations, legal aid societies, labor unions, churches, research institutes, professional and environmental associations, museums, and some government agencies (law.cornell.edu). Some of the purposes service for these organizations include working for social change, to help people help themselves, and to fight for the civil rights of others. NPOs are a vital part of our nation’s economy, as they not only provide much needed public services to all concerned citizens and inhabitants of the U.S., they also provide millions of jobs for nation’s workforce. This essay will discuss the application of financial management techniques in NPOs. A comparison and contrast of nonprofit and for profit organizations (FPOs) will be examined while focusing on the fundamental differences between the two. How NPOs and FPOs are affected by different laws that...
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...BSHS 373 - Week 3 Individual Assignment: Accounting Short-Answer Questions Resource: Financial Management for Human Service Administrators Write 200- to 300-word responses to the following questions: What are the major accounting differences between nonprofit and for-profit organizations? Why are audits becoming increasingly important in the nonprofit sector? Cite at least three reasons. Complete Exercises 4.1–4.3 in Ch. 4 of Financial Management for Human Service Administrator July 1, 20XX–December 31, 20XX (a).July 1, 20XX— Received unrestricted donation check in the amount of $15,000 from the Multnomah County Department of Health and Human Services. Debited Cash $15,000 Credited Revenue $15,000 (b) July 19, 20XX—Paid Great Northwest Insurance Company $9,000 for six more months of fire and liability insurance coverage. Debited Prepaid Insurance $ 9,000 Credited Cash $ 9,000 (c) July 15, 20XX—Paid Portland Arts & Crafts Company $3,000 for additional arts and crafts supplies. Debited Arts & Crafts Supplies $ 3,000 Credited Cash $ 3,000 (d) July 15, 20XX—transferred temporarily restricted funds in the amount of $3,000 from investments to pay for additional arts and crafts supplies. Debited Investments $3,000 Credited Cash $3,000 (e) July 30, 20XX—Paid Oregon Sporting Goods $5,000 for additional recreational equipment. Debited Expense $ 5,000 Credited Cash $5...
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...Financial Management in Non-profit Organizations and How It Compares to For-Profits Organizations are usually classified as either non-profit or for-profit. Business corporations are organized for-profit. While non-profits usually include associations, charities, and other voluntary organizations formed to further cultural, educational, religious, or public service objectives. Non-profits and for-profits do have some things in common. Both types of organizations attract individuals focused on maximizing income, minimizing expenses, and reaching their goals. While there are many similarities, non-profits and for-profits have many differences. The most fundamental difference between nonprofit and for-profit organizations is the reason they exist. A non-profit organization exists to provide a particular service to a community, while a for-profit organization exists primarily to generate a profit for the company’s owners and shareholders. A non-profit organization channels all of their income into services and programs aimed at their mission compared to for-profit organizations that distribute profits between owners, employees, shareholders and the business itself (Bottiglieri, Conway, & Kroleski, 2011). Financial management for non-profit organizations is similar to for-profit organizations in many ways however key differences shift the focus of a nonprofit manager. These differences include organizational structure, ownership, distribution of profits, generating revenue...
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...Solutions is a nonprofit organization specializing in providing services of psychotherapy for individuals who have been diagnosed with Post Traumatic Syndrome Disorder, commonly referred to as PTSD. After disaster strikes, or is experienced by someone, it is difficult to lead life the same way as before, causing several issues to arise. Some are recommended to seek treatment, and Magnolia is the place to seek treatment. After the terrorist attack on September 11th, 2001, Magnolia took the opportunity to help New York City sufferers who have been diagnosed with PTSD. Due to the high volume of individuals who needed treatment, the state provided a sizable grant to the organization to meet the increase of demands and services. This allowed the organization to hire additional professionals and utilize the remaining funds for administrative services. However, there was a decision made to increase the budget for the next year by the board of directors which resulted in a loss of funds. Importance of Financial Management Financial management is an important factor for nonprofit organizations. In order to compete with for-profit businesses, nonprofit human service agencies and administrators must become more cost conscious and much better at the practice of financial management (Martin, 2001). Financial management is probably more important to nonprofit organizations, including both government and private nonprofit human service agencies, than it is to business organizations (Martin, 2001)...
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...Comparative Summary HCS/577 Comparative Summary Financial environments vary from one entity to the next. Although most health care organization might be viewed as simply providing health care, however they vary in the way finance is handled and is reported. For example there are health care entities that are known as for-profit where there is a major focus on bringing in revenue to make a profit and some as not-for-profit where any revenues that come into the entity get reinvested in the organization and the major focus is on the community. Also entities that belong to the government will have many differences in the way financial statements are reported. Some examples include health care providers such as urban hospitals that are for-profit, rural hospitals that are not-for-profit and government entity such as military hospitals. These entities their own financial structures and have policies that are unique to each. Also financial managers are under a lot of pressure to prevail in such competitive field, so it is important to have a management practice that is prevalent as financial management in health care are deemed difficult. The Financial Structure Medical landscape continues to change in many ways and it has led to changes such as the roles and structure of health care provider. Not-for-profit hospitals usually take patients whether or not they can afford to pay for treatments. For-profit hospitals however will not treat a patient unless they are covered by an...
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...are just not enough providers to go around. In this essay we will discuss how the shortage affects healthcare from a business aspect; how non-profit and profit organizations impacted, what the responsibilities of the management staff is, and what rules and standards the financial management must address with this problem. In, the end we may not have a answer to this problem but we will have a better understanding of what the financial management must juggle in order to run a successful department or organization. The shortage of physicians is likely going to affect every aspect of healthcare. Profit and Nonprofit organization will both be affected some ways similar and in some ways different. Not-for-profit organizations, “are owned by the entire community rather than by investor-owners,” and profit organizations, “earn profits that are distributed t the investor-owners of the firms or reinvested in the firm for the long term benefit of these owners.” (Cleverly, 2011, pg. 8) The Affordable Health Care System has made a large impact on how organizations are reimbursed which is the major interest to both organizations. The shortage comes at a bad time while our nation is trying to improve access to care and improve quality. The lack of Physicians is causing an increase strain to business not just for profit but also nonprofit hospitals. “Investor-owned companies have powerful motives for expansion. The price of their stock—and, therefore, their continued access to equity...
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...Sugar Comparative Summary There are several financial environments that various entities exist in. These include for-profit, not-for-profit, and government organizations. These environments have many similarities, as well as differences. Examples of these may include the Methodist Hospital in San Antonio, which is a for-profit organization; the American Heart Association, which is a not-for-profit organization; and the U.S. Department of Health and Human Services, which is a government organization. Each of these organizations has their own practices and policies unique to them. Not-For-Profit According to Investopedia (2016), a not-for-profit organization does not earn profits with the intent to line the pockets of an owner, but rather it is earned or donated and then used to achieve the goals or objectives of the organization. Many, but not all NFPs are charities or some other public service organization. NFPs are able to apply for a tax exempt status, as long as they meet certain criteria set by the state and federal government, thereby freeing them from most forms of taxation. Any donations that are made to the organization may be tax deductible for the person making the donation. According to Carter (2016), “Not-for-profit organizations raise capital by soliciting donations from businesses and individuals. Government and private grants may be used to fund the operation of a nonprofit organization. A not-for-profit organization may have an easier time getting the public...
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...State University, Long Beach PPA-525 – Tuesdays Presented to: Dr. Sundstrom December 4, 2012 Final Paper Overview of the nonprofit sector The nonprofit sector is the collective name used to describe institutions and organizations in American society that are neither government nor business. (“What is the Nonprofit”, n.d.) Outside the United States, nonprofits are often called nongovernmental organizations (NGOs) or civil society organizations. (Campbell, 1987) However within nonprofit organizations there are other names which emphasize the characteristics that distinguish nonprofits. Essentially they are categorized as: voluntary sector to acknowledge the importance of volunteers and voluntary action, independent sector to distinguish nonprofits from business and government, and social sector to underscore how the activities of nonprofits enhance the social fabric of our country. (Anheier & Seibel, 1990) Nonprofit organizations, unlike businesses do not exist to make money for owners or investors; instead these groups are dedicated to a specific mission. There are currently more than 1.6 million organizations. (McSween, n.d.) About one million of them are public charities that employ over seven percent of the country's work force, close to 10 million paid workers. (“What is the Nonprofit”, n.d.) Careers in nonprofit management Nonprofit institutions play an important role in community life and are an integral part of the economic, political, and social structure...
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...Using a Balanced Scorecard in a Nonprofit Organization Joel Zimmerman, Ph.D. Director of Consulting Services Creative Direct Response This paper is part of the CDR White Paper Collection. It is maintained and distributed by the Nonprofit Learning Center. 2004, Creative Direct Response, Inc. USING A BALANCED SCORECARD IN A NONPROFIT ORGANIZATION Using a Balanced Scorecard in a Nonprofit Organization Joel Zimmerman, Ph.D., Director of Consulting Services Creative Direct Response, Inc. Since its invention in the 1990s, the balanced scorecard has won acceptance as a management tool in the for-profit sector. Now, nonprofits are becoming familiar with, and trying to use, balanced scorecards. This white paper explains what balanced scorecards are and gives critically important tips about how to adapt them successfully into the nonprofit world. “Balanced Scorecard” has been a corporate management buzzword for about a decade. Like many management movements before it, balanced scorecard is migrating from corporate management into the offices of nonprofit management. The transition of a balanced scorecard concept from for-profit to nonprofit organizations is not direct. The basic ideas behind creating a balanced scorecard are as valid for nonprofits as they are for corporate businesses, but the implementation of this idea needs to be modified a bit to make it work effectively in the nonprofit world. In this article, we will look at what a balanced scorecard is all about...
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...Issues and Problems Faced by Non Profit Organizations: Funding for Non Profit Organizations “Funding for Non-Profit Organizations” Introduction In general, non-profit organizations conduct business activities and actually raise revenues but their surplus funds are not distributed to owners or shareholders. They operate with the help of some staff who are, although paid salaries, do not earn as much as those who are employed in business corporations that operate for profit. There are also volunteers who provide manpower, skills and talents but are usually paid minimally or get no payment at all. As such, non-profit organizations are exempted from income and property taxation. While businesses and corporations are a source of funding, volunteerism renders the necessary fuel to keep non-profit organizations moving. By and large, non-profit organizations operate relying heavily on volunteer workers and generating funds through the assistance of business benefactors and foundations as well as through fund-raising activities. The number of people or staff that they maintain varies according to the size of the organization, but one thing that can be said about most of them is that they are generally understaffed primarily because of limited funds. DISCUSSION There are many existing international, national and local non-profit organizations. One common thread about them is that they exist for a cause, which...
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...RUNNING TITLE: MAGNOLIA THERAPEUTIC SOLUTIONS CASE STUDY Magnolia Therapeutic Solutions Case Study Tamara Owens University of Phoenix Financial Management in Human Services/BSHS 373 Frieda Flowers October 28th, 2013 In the Magnolia Therapeutic Solutions case study the board member made decisions based on what if’s. Working in the financial area in the nonprofit industry I have seen decisions like this come about numerous of times. The board decided to approve a budget and spend money on a grant which they received the previous year and was almost sure that they would be rewarded on that grant again in the future. The boards decision caused the organization to take a vital financial fail because the grant was not renewed so this caused layoffs and other organization cut backs. If I was on the board I would have definitely rejected the decision to spend money which was not approved or in present. Majority of grants are city, state or government funded. This means there are certain stipulations which may come with getting approved for those grants and sometimes the funds are not always available. Magnolia was a new organization which was growing at a steady pace. The jump and demand of services happened because of a major event “911” which had occurred in their city. It was great that Magnolia was able to assist the victims and their families with PTSD. Which this is why they receive the grant they received to increase staff and services. However, I would have based...
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...Valley of the Sun United Way was founded in 1925, an Arizona nonprofit organization whose mission is to improve lives. For more than 80 years Maricopa County’s community has used their caring power to address human care needs. In 2005 Valley of the Sun United Way Foundation was organized to help engage in activities for the benefit of the VSUW. Each fall VSUW conducts a campaign that helps to offset the following year. Along with the campaign contribution there are three options for donors. The first is the Results That Matter Fund that is invested into health and human services programs, the second is the Impact Areas that identify the community needs, and third is a specific nonprofit agency or program. Cash flow and functional expenses are exampled at in all nonprofits and profit organizations. To identify properly the organizations’ strengths, weaknesses, and areas of threat the internal and external factors must first be analysis. An audit was conducted for 2008 and 2009 in accordance with the Government Auditing Standards. This audit was conducted to make sure that the statements are free of material misstatement. VSUW reported a combined statement of financial position statement for two years, 2008 and 2009 with the end of the fiscal year being June 30. Beginning with their current assets, cash and cash equivalents between 2008 and 2009, they are showing an increase of more than two million dollars has occurred. The reports showed that the contributions or pledges...
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