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Financial Management in Nonprofit Organizations - Essay Example
Author : mcculloughchasi
Finance & Accounting
Pages 8 (2008 words)
CUSTOMER’S NAME COLLEGE NAME Semester Executive Summary There has been a debate on the contrasting methods being adopted by nonprofit organizations (also known as not for profit organizations) for financial management. These methods have some resemblance in their structure with the methods of conventional finance, yet they differ in their applicability…
Several performance measure indicators are also discussed and they have a deep co-relation with how the initial funds are generated. Performance indicators of both the types differ slightly but this is the only aspect in which most general finance principles can be applied to both. Finally, we looked at how corporate governance is ensured for nonprofits yet they lack in strong monitoring as the real focus of government, agencies and creditors is on how for – profits are performing. Financial Management in Nonprofit Organizations Financial Management for nonprofit organizations has many similarities with the financial management practices being adopted by profit organizations yet it differs in some respects. Maximization of Shareholder’s wealth and return on investment are the key performance indicators for a ‘for-profit’ organization. However, as far as a not for profit organization is concerned, the key emphasis is on developing the welfare projects of the society by contributing in one form or the other. Major stakeholders of a not for profit organization are not entitled to any wealth maximization. ...
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