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Nonprofit organizations

Discuss whether or not you feel the following topics are relevant to Non-Profit Organizations. Discuss how you feel these topics are similar or different in a Non-Profit Organization.

1. ethics
2. capital budgeting
3. strategic planning
4. financial ratios
5. EFN
6. cash flows and other financial statements

You may use an organization you are familiar with or that you research on the Internet to illustrate the points in you paper.

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Ethical: There is a preconceived notion that a non-profit organization is uncorrupted by the desire to achieve profit. However, such organizations are run by people who have same ethical standards as rest of the population in the society. Most of the ethical decisions faced by nonprofit organization such as honesty, and treating people with respect are same as those faced by for-profit sector. A major guiding principle which distinguishes nonprofit from for-profit organization is that profit of the organization is for no other individual. Organizations that have lost the focus on this principle have been subject to many scandals. For example, New Era Foundation was charged with embezzlement leading to imprisonment of CEO.

A nonprofit organization that has a clear focus on ethical principles can concentrate on its mission and fulfill its responsibilities. On the other hand, organizations that do not pay attention to ethics, can damage its relationship with the community, hurt client's interests, and tarnish the image of entire nonprofit sector.

Avon Foundation is one of only 19 companies selected every year from 2002-2008 for Best Corporate Citizen, by Business Ethics Magazine.

Capital budgeting: Capital budgeting is important for long term success of an organization. The concept of capital budgeting may seem out of sync for nonprofit organizations, but the fact is that nonprofits have capital structure. Good management practices are those ...

Solution Summary

Difference between profit and nonprofit organizations on listed topics