Essay_MGMT640.pdf - Running Head NON-PROFIT ORGANIZATIONS A...

Info icon This preview shows pages 1–4. Sign up to view the full content.

Running Head: NON-PROFIT ORGANIZATIONS: A FINANCIAL MANAGEMENT OVERVIEW 1 Non-Profit Organizations and Their Financial Management Practices University of Maryland University College Dr. Paul Lowengrub MGMT 640: Financial Decision Making for Managers
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

NON-PROFIT ORGANIZATIONS 2 Executive Summary Non-profit organizations are important to the economy and to the county’s society. Though they are not in business to make money and their financial position is entwined to their mission. In order to stay current and in business, an organization needs a dedicated financial manager, tasked and responsible to lead the organization in the many avenues of financial management. Usually overseen by a Board of Directors, together the organization should successfully accomplish its goals. Using a balance sheet, cash flow statement and income statement, allows the financial aspects to be analyzed and improved as often as needed. Understanding financial health is critical to navigate the situations of an organization. Key words: Financial management, statement, non-profit financial health, non-profit organization.
Image of page 2
NON-PROFIT ORGANIZATIONS 3 Non-Profit Organizations: A Financial Management Overview Non-Profit Organization Financial management, practiced by the accounting officer or chief financial officer (CFO), is amongst the most important role in an organization. It is the planning, directing, and organizing of the company’s finance that is the life of the organization. The purpose of financial management is to understand a company’s current financial situation, providing full information about debts and credits. There are two main types of organizations, non-profit and for-profit. A nonprofit organization is a group that is organized for the purpose of generating profit in which no part of the organizations’ income is distributed to its members, directors, or officers. Although a non-profit organization is similar to a for-profit organization, their goals are much different. The non-profit organization operates on a charitable basis, tasked to influence lives through on an ongoing basis of utilizing resources. The resources provided are directed towards providing goods or services to a client other than the actual resource provider. Ranging in size, more than 1.4 million non-profits were operating in the United States in 2013 (Statista, 203) and it is only trending to increase. A for-profit organization’s goal is to make money. Management of a Non-Profit Organization A nonprofit organization is not only led by the people that work at the organization, it is usually overseen by a board of Directors. The management of a non-profit organization is tasked to lead with limited resources to achieve the planned goals. A Board of Directors are put
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern