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What Is The Corner Stone For A Nonprofit Organization

451 Words2 Pages

Financial management is the corner stone for a nonprofit organization. Without clear financial objective, the organization fall behind the performance regardless of the mission, size or the purpose for which the organization has set up. It’s not important for a nonprofits organization to show financial surpluses, but it’s important to generate enough income to cover their costs. Financial objectives include raising money to fund the activities and cover fixed costs such rental, staff compensation and utility bills. The two mainly sources to generate income are fundraising activities and revenue from services provided. The primary objectives for a nonprofit organization are to break even and maximize cash flow, while avoiding excessive financial risk. There are …show more content…

Third, apporpraite size for cash and financial service , nonprofit organizations management seeks to satisfy the needs and desires of its constituents within a set of financial constraints. In either case, financial resources are the focal point for managerial decision making, action, and accountability.
Forth, using reserve to self fund new program and program expeansion, and maintenance . The organization must pay close attention to whether it has enough cash reserves to continue to provide services to its clientele. Cash flow can be extremely challenging to predict, because an organization relies on revenue from resource providers that do not expect to receive the service provided. In fact, an increase in demand for a not-for-profit’s services can lead to a management

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Analysis of 501(c)(3) IRS Regulations Federal and state laws require 501(c)(3) organizations to comply with regulatory guidelines set forth by either the Internal Revenue Service (IRS) or state regulations to obtain tax-exempt status. The complexity of compliance is determined by the organizations demographics, such as gross receipts, expenses, and assets. Despite the size of the organization’s income, the organization must adhere to the IRS publication 557 for filing requirements and required disclosures. Failure to abide by the IRS rules places an organization at risk for losing its 501(c)(3) status.

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In the healthcare industry, for-profit and nonprofit organizations play similar roles in the delivery of health services. The difference is more pronounced in tax payments and the use of profits. Nonprofit healthcare organizations prioritize serving the community over profits. Any earnings are used to improve their services. These hospitals provide medical care at little or no cost to uninsured individuals.

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The non-profit organization does not reveal its financial health with transparency. The web page has no visual annual report, nor any links to follow the finances. “Be informative” and “Transparency” (Brinckerhoff, 2009) are two important attributes for your organizations financial health to the public. Further research on the web, the discovery of 85 Hope finances revealed revenue in 2012 of $87,265 and 2013 revenue of $76,776. The total liabilities of $5,851 in 2012 and in 2013 $2,748 are reported.

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1889 Words | 8 Pages

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1270 Words | 6 Pages

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1436 Words | 6 Pages

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812 Words | 4 Pages

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