For-Profit Organizations Essay

All charitable givers dislike their money going toward overhead, although it is part of running any business or even household. In order for organizations to grow, expenditures have to be spent toward overhead items, such as salaries, marketing, advertising, or risk capital adventures. Limiting the organization’s ability to advertise or market appropriately, limits the social awareness of the organization and mission they are trying to fulfill. Therefore, if marketing and advertising are inadequate, then donations are going to be fewer and lower. As stated by Pallotta, only 144 non-profit organizations crossed the 50 million annual revenue threshold as compared to 46,136 organization in the for-profit sector during 1970-2009. For-profit organizations are not nearly as criticized for spending their money on advertising and marketing as the non-profit sectors.

Over spending is also a societal norm in America and easy to do. Again, a balance needs to be established between the income coming into a non-profit organization and all its overhead. It is a circular cycle in that the more funds allocated toward items such as marketing, the more potential for larger income to come into the organization. Growth of the organization is dependent on both these factors. Therefore, overhead is dependent on the income; and if there is little income, there will be will be little to no overhead. Overhead also needs to be a portion of an organizations income, creating a balance in income versus expenses in order for the organization to be