Got a tricky question? Receive an answer from students like you! Try us!

Financial Management in Nonprofit Organizations - Essay Example

Finance & Accounting
Pages 8 (2008 words)
Download 1


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…

Extract of sample
Financial Management in Nonprofit Organizations

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. ...
Download paper
Not exactly what you need?

Related Essays

Financial Management in Multinational Organizations
In addition, it becomes convenient for an organization to draw additional funds from the shareholders if it supports shareholder wealth maximization. Financial management also helps organizations in financial planning and controlling, and evaluation of risks. It has been rightly argued that maximizing shareholder value perhaps only most effective method to benefit every stakeholder. Table of Contents Executive Summary 2 Introduction 4 Maximizing Shareholder Value 5 Financial Planning and Control 6 Forecasting 7 Investment 7 Exchange Risk 7 Credit Risk 10 Conclusion 10 References 13…
10 pages (2510 words)
Financial Management in Nonprofit Organizations
urban, sub-urban, rural area. Most of the non-profit organizations are small in size. For-profit organizations are basically profit motivated. They do not depend on funds or donations but depend on other sources like loans, debentures, ventured capital and leasing among others. The accumulated profit is divided among the stockholders themselves rather than investing it in the company. Both the organizations have their own mottos and goals. The paper intends to discuss the financial management in the non-profit organizations. Also, the study aims to compare the management of finance in…
9 pages (2259 words)
Financial Management in Health Care / Health Care Budget
This has followed a breakdown of the various components i.e. revenues and expenses. A final analysis of the projected income is obtained in the end. Inflation has played a major role in this process and has been considered. The projections show an increase in net income which can sustain the running of the organisation (John et al, 2007). Financial drivers A clear indication of financial drivers’ consideration is deduced from this projection. The management has considered the fixed expenses in the running of the hospital e.g. utilities as well the most vital variable expenses e.g. salaries,…
3 pages (753 words)
Financial Management in Nonprofit Organizations
As for example, social service organizations are required to be more specific with their financial reporting practices so as to comply with the existing rules and regulations. Next, religious nonprofit organizations have vital issues related to the complex requirements of its memberships. Management of finances in nonprofit organizations is quite a challenging task. The sources of revenues of nonprofit organizations are very much vulnerable to changes in political environment or economic issues. Nonprofit organizations being accountable to public require more accurate and reliable presentation…
Financial Management in Nonprofit Organizations
The researcher found some key differences between the financial systems of both types of organizations. Those differences were mainly related to the sources of finance and its use by the organizations. The main difference that gives rise to all other differences is the motive of both organizations. The motive of the owners of for-profit organizations is to earn higher amounts of money to bring it in personal use. On the other hand, the motive of the management of not-for-profit organizations is to help people and society in resolving key issues. Such organizations get money to use it for the…
7 pages (1757 words)
The report is prepared with the sole intent to study the various financial management practices in a non-profit organization. The author of the study will highlight the various financial management practices that ensure smooth operations of the business. It also highlights the difference in the financial management practices between profit and nonprofit organizations. The author of the study will also provide certain inputs which will help in the betterment of the nonprofit organization and help in achievement of goals and objectives. It was essential to conduct this study to understand the…
10 pages (2510 words)
Financial Management in Nonprofit Organizations
Another important difference in the financial management of the two types of organizations is the constraint of non distribution. Nonprofit organizations cannot distribute the profit generated to the owners. Nonprofit organizations do not have any owners. Thus the people who fund the organizations do not necessarily gain any kind of control over the firm. The nonprofit organizations have board just like profit making organizations. Although there is one major difference, that the boards of the nonprofit organizations are self appointed. Thus the board members are not accountable to the…
6 pages (1506 words)