This will help reinforce some of the ideas listed in Chapter 8 and provide some insight into the challenges associated with Not-for-Profit organizations.
Read through Chapter 8 and complete question 3 that begins on page 401 of our text. Try to pick an organization that’s relevant to you and your future goals.
Question 3:
Not-for-profit organizations lack the authority to levy taxes for support of their programs and must finance their operations from a variety of revenue streams. Some are commercial and operate largely from the sale of goods or services (including revenue from service contracts with governments), others are charitable and operate with various sorts of donated support, and others combine revenue from a variety of sources. Select a not-for-profit organization in your area and analyze its revenue resources. The entity should be chosen because you are interested in the service provided by that entity and because the entity will cooperate with your review and assessment.
a. Analyze the revenues received by the entity (taxes, charges, donations, etc.— provide disaggregated data), examine trends and shifts, determine whether sources are sensitive to general economic conditions, explore limits and con- trols that the entity may face, and review the processes by which revenue decisions are made. You should pay particular attention to the division of revenues from use of endowment, charges for services, and annual donations. To what extent does the entity employ the principle that those using services must pay (an analog to the benefits-received principle in taxation)? In light of the purpose of the entity, to what extent is payment for service appropriate?
b. Examine how the entity manages fund development, that is, money raising. Is it self-administered, or does another entity administer the system, possibly by contract? Are protective controls properly in place? What are the costs associated with this activity?
c. On the basis of your investigation, what do you conclude about revenues
available to the entity? Do you have recommendations for reform and restructuring? Be specific. Link your conclusions to the information developed in your analysis.
question 4:
For this assignment, please pick an article of your choosing relating to either the government or non-profit finance world and provide the reference as part of your review. As you complete this review, don’t forget my suggested Summarize, Analyze and Assess format. Two pages minimum please. No late submissions can be accepted.