If Not-for-profit, What For Then?

[hototo]

[calvert]

People who develop and run not-for-profit organizations generally see themselves as helpers or activists or agent of some sort of modify. There is not usually a solution for sale but services geared toward helping some distinct group of individuals such as the homeless or foster children  or addicts by means of efforts such as fundraising, direct service, organizing groups of people to perform toward a aim or some otherwise financially unprofitable venture that seeks to make the world a better location. Some of the people who operate for non-income truly make fairly a bit of funds, but typically these organizations barely make ends meet. It all depends on the size, the funding supply, how the solutions are utilized and by whom.

[Jairus]

[Willard]

Keitharoo, regarding your answer "Depends upon the integrity of the persons involved..."I applaud you for your thorough answer to a question I know all too well. Here's a hint: It's all in the agenda.

[Sefton]

services People who develop and run not-for-profit organizations typically see themselves as helpers or activists or agent of some kind of change. There is not usually a product for sale but services geared toward helping some particular group of people such as the homeless or foster children  or addicts through efforts such as fundraising, direct service, organizing groups of people to work toward a goal or some otherwise financially unprofitable venture that seeks to make the world a better place. Some of the people who work for non-profits actually make quite a bit of money, but often these organizations barely make ends meet. It all depends on the size, the funding source, how the services are utilized and by whom. whirlwind-freefly 72 months ago Please sign in to give a compliment. Please verify your account to give a compliment. Please sign in to send a message. Please verify your account to send a message.

[Meirion]

Non profits can also be thought of as public service organizations.  A lot of these groups work with the government or to act as stopgaps where govt cannot provide required services quickly.  For example a food bank can provide a bag of food immediately during the week it might take to process a food stamp application.  The program receives food donations from corporate sponsors who get rid of usable but unsaleable product as well as a tax deduction. and organizations like Second Harvest who is a nonprofit  A large part of the labor is volunteers who want to help others.  They also receive charitable cash donations again by people who want to help and get a tax deduction.  The cash pays for regular employees, rent and other overhead   Another non-profit in my city is the ARC, Association for Retarded Citizens.  They provide support that the local govt can't.  For a single person to get Section 8 housing might mean being on a list for years.  Even then a landlord might not want a retarded tenant.  What the ARC did was erect a building with apts for 30 clients.  On the ground floor there is a day care for elderly retarded.  The funding comes from individual charitable donations, city section 8 payments, city senior citizen funds and the rent paid by tenants.  The Arc has several training program businesses.  The have a small deli cafe, a janitorial service and a company that contracts to do simple labor intensive jobs.  The goal is to break even and any extra money goes to move clients into jobs in the community.  The people who benefit are the clients but also the taxpayers who don't have to pay to take total care of them.   Many arts-related programs are non profit, museums, theater organzations, the Ballet and Symphony get funding from a mixture of private donations, public funding, fund raising and ticket sales.  The private citizens & govt(us) have decided the community needs to support the Arts and in my city at least it is a way to break into certain social circles.   There are all kinds of these groups Red Cross, PT A's.  Meals on Wheels, cultural groups who raise money for schloarships-something for everyone who wishes to participate   So people who donate get something out of it, people who administer these programs can do something they believe in, the clients end up with needed support.    

[ascott]

aNaIs.In said: 1 Keitharoo, regarding your answer "Depends upon the integrity of the persons involved..."I applaud you for your thorough answer to a question I know all too well. Here's a hint: It's all in the agenda. 72 months ago

[Amdt]

Depends upon the integrity of the persons involved... First, you need to understand what "non profit" actually means. As far as legal and tax implications go, "non profit" simply means that at the end of the fiscal year, there is intentianally no money left over as profit. In some instances, it also means that you are trying to provide some sort of good in the world. "Non profit" does not indicate where the money actually went. Here's a hypothetical example: say I start an organization to help provide corrective footware for dogs. I take in ten million dollars in donations over the year. I use one million of it to buy the doggie footwear, and then spend eight million providing myself a plush office, company car, expense account, etc., plus pay myself one million dollars in wages. At the end of the year, all of the money is spent and I can claim "non profit" status. I don't sell stock, I don't pay investors, so I am "non profit." Of course, I got to live a pretty sweet lifstyle and pay myself quite well, but the money was all spent on organization-related expenses, so I am "non profit." If I have partners, then as long as we all "work" for the organization, we can all enjoy the wealth and still be considered "non profit." So there you go, now you see who potentially benefits. This is exactly why you have to be VERY careful before donating to any charity. Just because they are "non profit," doesn't mean they are worthy of your donation. Always research an organization very well before giving them any of your hard-earned money. There are many very good charities out there, but there are a lot of bad ones too. Sources: www.eclecticsite.com/financial.html Keitharoo 72 months ago Please sign in to give a compliment. Please verify your account to give a compliment. Please sign in to send a message. Please verify your account to send a message.

[Bromleigh]

All well run organizations--for-profit and not-for-profit--are managing to a set of objectives... ...these objectives in a for-profit company may include the usual maximization of Profit=Revenues-Expenses and/or the maximization of shareholder value.   A nonprofit company means it shoots to set its revenues/pricing to cover its budgeted expenses--nothing more complicated than that. There can be tax advantages to this form of corporate organization and there can be less regulatory scrutiny.   Not all nonprofits are charitable organizations that "do good in the world". Some are fiercely competitive businesses that just choose to organize themselves that way.  I worked in one for almost 10 years.  Trust me, it was not much different than working in a Fortune 500 corporation or bank. It was a bankcard association.  The nonprofit pays taxes on its profits, so as crazy as it may sound to the novice, the company absolutely does not want to make a profit, unless it is doing some creative tax accounting. The art and science is in the budgeting process.  The company maps out its plans and carefully budgets what it will take to achieve them.  Then it sets its pricing/fees/donation targets/etc. to cover these costs.  If its financial planning is poor and the company makes a big profit, the CFO probably gets a low/no bonus that year.   So, what does a nonprofit manage to if it is not seeking to maximize profits?   From a financial standpoint, as I indicated above, it is definitely managing to its carefully developed budget.  From a business standpoint, depending upon what the business is, it could be trying to maximize the profitability of its members.  Remember, many member associations are nonprofits.  These could be associations of tiddly winks players or they could be associations of megabanks or insurance companies, etc.  In addition to member institution profitability, the association could be managing to maximize the market share of its brand.  Some large associations are essentially franchises and have that mandate.   As for who benefits, hopefully the nonprofit benefits its members--or, if it is a charitable organization, the beneficiaries of the focused charity. For charities, it is important to watch its administrative ratio.  Afterall, when people make charitable donations to an organization focused on helping refugees from the genocide in Darfur, they want as many of their dollars going to the refugees, not paying for lavish headquarters or excessive executive compensation. These ratios are published.  For the example I used, if you look them up, you will find charities like Americares and the International Rescue Committee highly efficient--meaning a very high percentage of contributions goes to programs, not administrative expenses.  Other organizations, which I will not name, which endeavor to help the same people in Darfur, do so much less efficiently.  You would contribute to those organizations, which might include some religious institutions, if you also had a strong affiliation with that organization for other reasons.  If you didn't have a strong affiliation with that less efficient charity, you would be wasting some of your hard earned charitable donation on an inefficient management team.   Hope this helps.   Sources: About a decade of experience as an executive in a nonprofit association   curious7777777's Recommendations Financial Management for Nonprofit Organizations: Policies and Practices Amazon List Price: $85.00 Used from: $62.64 Average Customer Rating: 5.0 out of 5(based on 1 reviews) Financial Planning for Nonprofit Organizations Amazon List Price: $57.00 Used from: $29.95 Financial Management for Nonprofits: The Complete Guide to Maximizing Resources and Managing Assets Amazon List Price: $39.95 Used from: $17.25 Average Customer Rating: 4.0 out of 5(based on 1 reviews) curious7777777 72 months ago Please sign in to give a compliment. Please verify your account to give a compliment. Please sign in to send a message. Please verify your account to send a message.

[Bernie]

First, you need to understand what "non profit" actually means. As far as legal and tax implications go, "non profit" simply means that at the end of the fiscal year, there is intentianally no money left over as profit. In some instances, it also means that you are trying to provide some sort of good in the world. "Non profit" does not indicate where the money actually went. Here's a hypothetical example: say I start an organization to help provide corrective footware for dogs. I take in ten million dollars in donations over the year. I use one million of it to buy the doggie footwear, and then spend eight million providing myself a plush office, company car, expense account, etc., plus pay myself one million dollars in wages. At the end of the year, all of the money is spent and I can claim "non profit" status. I don't sell stock, I don't pay investors, so I am "non profit." Of course, I got to live a pretty sweet lifstyle and pay myself quite well, but the money was all spent on organization-related expenses, so I am "non profit." If I have partners, then as long as we all "work" for the organization, we can all enjoy the wealth and still be considered "non profit." So there you go, now you see who potentially benefits. This is exactly why you have to be VERY careful before donating to any charity. Just because they are "non profit," doesn't mean they are worthy of your donation. Always research an organization very well before giving them any of your hard-earned money. There are many very good charities out there, but there are a lot of bad ones too.