...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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...INTERNAL CONTROLS AND FRAUD PREVENTION IN NON-PROFIT ORGANIZATION WRITTEN BY DAVID SANNI Designed to provide information on key areas that can strengthen the internal control system of VI-MID-ISLAND SERVICE (VIMS) Submitted To VANESSA OLTMAN Faculty of Management Vancouver Island University Nanaimo, BC, Canada (Nov/15/2012) Table of Content 1.0 INTRODUCTION 3 2.0 NATURE OF FRAUD IN CANADIAN NON PROFIT ORGANIZATION 3 2.1 TYPE OF FRAUD IN NON PROFIT ORGANIZATIONS 3 2.2 PERPETRATORS OF FRAUD IN NON PROFIT ORGANIZATION 4 2.3 IMPACT OF FRAUD TO NON PROFIT ORGANIZATION 4 3.0 COMPREHENSIVE APROACHE TO REDUCE FRAUD 5 3.1 UNDERSTANDING INTERNAL CONTROL 5 3.2 BENEFIT OF INTERNAL CONTROL 5 3.3 LIMITATIONS OF INTERNAL CONTROL 6 3.4 CONTROL MEARSURES IN PREVENTING FRAUD 6 3.5 SUMMARY AND CONCLUSION……………………….………………….8 4.0 REFERENCE…… ……………………………………………………………9 1.0 INTRODUCTION The Canadian non profit sector has one of the largest populations in the world, accounting for over 7% GDP and creating 2 million full time jobs for Canadians. Further discoveries was made that 78% Canadians donates money to non profit Organization irrespective of all walks of life and income bracket. These donations are received to address core issues...
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...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 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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...Developing a non-profit organization is a challenging task. The process takes time and work whether it is starting a new organization from the bottom up, or developing a new non-profit department. Budget is a vital part of this process. Overestimations or minor mistakes in budget may cause long-term damage if the agency is not careful dealing with the financial management. Magnolia Case Study is a prime example of this. Even though the organizations reviews were strong and the organization received awards, a mistake in the budget caused the agency to go downhill unintentionally. Ultimately, I felt that the board should have reconsidered what Mary asked for. For the year Magnolia was awarded a grant that was not to extend past the year. The board should have examined the possible changes that may happen within a year. I felt like Mary asked for money that would not be needed for the following year and got a head of herself when she made her funding request. I understand that New York City needed an excess amount of help after the 9/11 terrorist attacks but requesting the money for the next year should have been considered a bit more carefully. Due to the organizational infrastructure possibly changing within the next year, a temporary grant should not be considered or budgeted as permanent funding. I felt that Magnolia was running smoothly and I would not have done anything different except the budgeting request. I would also have taken into consideration the hiring of extra...
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...Hum/ 260 Dq 1 and 2 The statement of activities is basically an accounting of all agency revenues and expenses for the fiscal year. In standard business (and in some sense, to non-profit agencies as well), this statement is called a profit and loss statement. It shows how much profit is left over after all expenses have been taken out. While non-profits do not make a profit in the traditional sense, they can take a portion of revenues and expand the program or purchase new equipment for use within the program. The statement of functional expenses does not represent revenues; only the total expenses incurred (or to be expended) during the fiscal year. They are common broken down in to various categories; program, management and general, fund-raising, and other normal expenditures (such as salaries, benefits, and others standard operating costs). Revenue centers are part of an organization (usually a department) which is responsible for the revenue (incoming cash) for its own department's use. While there may be some monies that cross lines with other functional departments, a percentage is earmarked as earned by a given department. This type of center allows supervisors to actively seek out funds to support their department via grants and other fund-raising operations.An expense center is similar to a revenue center, but departments are responsible for the expenses used to run their department. This allows supervisors and managers to control what expenses are paid out directly...
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...many companies/organisations have starting focusing on non-financial factors which include customer and employee satisfaction, work atmosphere, etc. which are not financial but in long process increase profitability of the organization. Further, right Amalgamation of both financial and non-financial measures can provide key executives with the glimpse of company’s progress well before a financial verdict is made. This paper concentrates on comparing financial and non-financial metrics used in traditional and lean enterprise. Traditional financial measures were first introduced 1900’s and have been used since then to size financial performance of the organization. The following are basic financial measures implemented in traditional organization: Liquidity Metrics: One of the many reasons organization fail is poor cash management, therefore liquidity management play an important role. Doing so, organization can limit and control cash flow problem and induce profitability. One of the most common liquidity ratio applied is current ratio, which is the ratio of current asset to current liability. Current ratio directs the ability of the organization to pay bills. If the ratio is less than one that means the organization is under liability or debt. The ratio of greater than provides safety cushion to the organization. Solvency: For the company to fulfil long term commitments, stay in business and continue making profit require common solvency ratio that is debt-to-asset and...
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...invest and how much of the profit will be distributed among the shareholders. “Finance” Came from Latin word “finis” means “dealing with the money”.finace is called the art and science of managing money. At the micro level, finance is the study of financial planning, asset management and fund raising for business and financial institutions. At the macro level, finance is the study of financial institution and financial markets and how they operate within the financial systems in both the domestic and global economics. Scholar’s view: “Finance consists of providing and utilizing the money, capital rights, credit and funds of any kind which are employed in the operation of an enterprise.” _George R Terry “Finance is concerned with the process, institutionsmarkets and instruments involved in the transfer of money among and between individuals, business and governments”. _Lawrence J Gitman From the above discussion, it can be said that finance is the process of financial planning, identification of sources of fund raising, investment of fund, protection of fund, distribution of profit to achieve the goal of the organization. Question-2: What is business finance? Ans: Generally, finance which is concerned to meet all the financial needs of business enterprise...
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...facilitate to people in need of medical attention (American Hospital Association, 2014). The 5,000 hospitals are broken down into for-profit, not-for-profit, and governmental organizations. All of the hospitals have the common goal of quality care for patients but have a different financial structure. For-profit, nor-for-profit, and governmental agencies are the types of organizations that make up the health care system. For-profit hospitals make up a little over a 1,000 of the community hospitals around the United States (American Hospital Association, 2014). For-Profit hospitals are usually owned by a private or public investor. The profits that the hospitals make go to pay expenses, salaries, and also the shareholders. For-profit organizations have to give some of the profits to the shareholders in order for the company to remain viable within the market. For-profit hospitals have higher cost of health care services than other hospitals or organizations (Horwitz, 2013). For-profits have to raise the cost of services in order for a profit to be made and to bring additional income into the facility. The financial structure of a for-profit hospital starts with medical costs for each patient that is serviced. Then the billing and coding department will charge the patient and the insurance company for monies owed. The main goal of a for-profit hospital...
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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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...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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...Governance in Non-Profit Healthcare MGMT 640 Executive Summary Good leadership, financial management, and governance are the essentials for success in any organisation, whether the organisation is a non-profit organisation or a for-profit organisation. In non-profit healthcare the seamless interaction of all the parts makes the organisation successful as a whole. Service provided must be consistent with the goals of the organisation. Agencies and watchdogs have become even more visible seeking accountability and transparency. But how do leaders within the organisation work together to make it a success, how are they governed to achieve the goals of the organisation? In for-profit effective governance is easily recognisable, and achieved. The most important element in an organisation that operates for profit is its balance sheet, great sales and rising stock prices, profits being paid out as dividends, no mention of fraud in the company accounting, these are all excellent indicators of effective governance. In non-profits more so in healthcare, it is terribly difficult to measure or see effective governance. Also, the idea of optimum efficiency may have differing connotations for each stakeholder. Non-profits benefit from the luxury of not having to suffer agency conflicts; nevertheless they must ensure that there are measures in place that ensures transparency. Based on the five (5) overarching strategies suggested...
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...common aim and objective, working in a common platform. Profit making organization: The organizations which are working for their benefit as well as for the benefit of the common people are called as the Profit Making Organization, for example cooperatives. A profit organization exists primarily to generate a profit, that is, to take in more money than it spends. The owners can decide to keep all the profit themselves, or they can spend some or all of it on the business itself. Or, they may decide to share some of it with employees through the use of various types of compensation plans, e.g., employee profit sharing. Non profit making organisation: A non profit organization exists to provide a particular service to the community. The word "non profit" refers to a type of business one which is organized under rules that forbid the distribution of profits to owners. "Profit" in this context is a relatively technical accounting term, related to but not identical with the notion of a surplus of revenues over expenditures. The main aim of these organisations is helping the community and is concerned with money only as much as necessary to keep the organisation operating. TREASURY MANAGEMENT. Treasury management (or treasury operations) includes management of an enterprise's holdings, with the ultimate goal of maximizing the firm's liquidity and mitigating its operational, financial and reputational risk. Treasury Management includes a firm's collections, disbursements, concentration...
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...Comparative Summary Of Financial Environment Liliana Varela HCS/577 April 2, 2012 Destiny Chen Health care financial environments exit in three types of organizations. These organizations are: a) Not-for-Profit, b) For-Profit, and C) government. A non- profit organization’s main purpose is to perform a mission rather than focusing on making a profit. The mission aims at helping the people in the community. One non –profit organization is the World Vision foundation. The World Vision foundation’s main goal is to provide children around the world with food, shelter, medicine, and education. “Dr. Bob Pierce began World Vision to help children orphaned in the Korean War. To provide long-term, ongoing care for children in crisis, World Vision developed its first child sponsorship program in Korea in 1953” (World Vision web site). The financial structure of this particular non –profit organization consist of grants, private citizens donations, and donations from other corporations. It also receives financial help from government agencies. For example, The United States Agency for International Development (USAID). This agency provides financial aid to the World Vision organization. The financial policies of this organization directly explain how each dollar is contributing to the realization of a project (education, food, clothing, medicine, etc.). The financial support is divided into three parts: a) 85% of the total revenue goes directly to programs, b)...
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...Non-profit organizations including hospitals, function under special state and federally mandated provisions that incorporate the idealization of law in each state. They play a big role in community service and act as a “safety net” for those in the community that seek aid when they have nowhere else to go. Non-profit organizations use a specially designed structure of financing which would never work for organizations that seek profit. This is simply due to the objectives sought by each entity. Non-profit organizations provide for the application and funding of diabetes as well as obesity. They generally have a disposition that is intended for reducing the cost of operation unlike profit organizations. Hospitals and research centers that aim for making a profit will only provide their services to those that can afford it. From that perspective, a citizen is only as healthy as they can afford to be. Unlike non-profit hospitals where everyone is cared for no matter what socio-economic class they are from, those looking to make extra money will actually reject some patients that can’t afford potentially save lifesaving...
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