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defining distinction between not-for-profit; more efficient

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1.) What is the defining distinction between for-profit businesses and not-for-profit entities, including governments? In your opinion, which is run more efficiently and why?

2.) Is there a direct link between revenues and expenditures in business entities? What about in government or not-for-profit organizations?

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Solution Summary

Your tutorial is 359 words and gives examples of why neither can be presumed to be more efficient and examples of the lack of matching in non-profit organizations.

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1.) What is the defining distinction between for-profit businesses and not-for-profit entities, including governments? In your opinion, which is run more efficiently and why?

For-profit business attempt to maximize revenue and minimize expenses in order to earn a profit for the shareholders. Not-for-profit and governmental agencies attempt to maximize services based on the revenues collected or contributions received. If they have not yet spent some portion of the revenues, they will seek to expand and provide services for the excess or retain the surplus as a reserve. The excess of revenues over expenditures is not retained for the advantage of a set of owners. The defining ...

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Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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