Financial Management in Nonprofit Organizations Research Paper

Financial Management in Nonprofit Organizations - Research Paper ExampleAs for example, social service organizations are unavoidable to be more specific with their financial reporting practices so as to comply with the existing rules and regulations. Next, religious nonprofit organizations have vital issues related to the abstruse requirements of its memberships. Management of finances in nonprofit organizations is quite a challenging task. The sources of revenues of nonprofit organizations are very much vulnerable to changes in political surround or economic issues. Nonprofit organizations being accountable to unexclusive require more accurate and reliable presentation of information by the financial centering team. The fiscal health of nonprofit organizations can be inferred from its financial statements prepared by the financial mangers. This essay gives a descriptive view about the lotion of financial management in nonprofit organizations by taking into account various aspec ts like their fund sources, utilization of its debts, doing evaluation techniques used by them and the governance mechanisms used. It ends with a conclusion and a few recommendations that can be suggested. Table of Contents Table of Contents 3 Introduction 5 Sources of cash 5 Use of Debt 7 Performance Evaluation 8 Efficient use of contributions 9 Fulfilling organizational objectives 10 Government Mechanisms 11 Conclusion 11 References 13 Introduction A nonprofit organization can be defined as a group which operates for purpose like public serve and are not driven by profit motive aspect. The incomes that are generated from nonprofit organizations are usually not shared with the members of the organization. Nonprofit organizations can be in the fields of education, health, human services, environment, etc. Individual grants and donations are the primary sources of funds for nonprofit organizations. Both equity and debt can form the capital anatomical structure of the nonprofit or ganizations but equity is preferred more. This is because loans are not easily available for them due to the unavailability of sufficient collateral and cash flow requirements sought-after(a) by the banks. Several forges can be employed by the nonprofit organizations for their sustainability and achieving their objectives. Many performance evaluation techniques are also available to help boosting their performance and maintain it for a long term. Government funding can also form a key component and most nonprofit organizations are set-aside(p) in several contractual agreements with the government. Hence, managing finance is a vital issue for the continued growth and sustainability of the nonprofit organizations. Sources of Funds Any organizations contrive is the basis of formulation of a successful fund raising strategy. Understanding of the proper funding requirements of an organization and its sources constitutes a good organizational plan. The formulated plan should be balance d too. For any nonprofit organization, the primary sources of funds are as follows a. Grants Funding through grants is available from either the charitable trusts or from the public sector. These funds are not meant to be repaid and are usually tax exempted. In most of the cases grants are associated with some conditions like, attainment of particular results, achievement of accepted milestones that have been agreed upon, excess unutilized money are to be returned back, providing regular progress report of the utilization of the money, etc. Hence, before