Financial Management in Nonprofit Organizations Research Paper

Financial Management in Non loot Organizations - Research Paper physical exertionAs for example, social service organizations argon required to be more specific with their financial account practices so as to comply with the existing rules and regulations. Next, religious noncommercial organizations have vital issues related to the manifold requirements of its memberships. Management of finances in nonprofit organizations is quite a challenging task. The sources of revenues of nonprofit organizations ar very much vulnerable to changes in political environment or economic issues. Nonprofit organizations being responsible to public require more accurate and reliable presentation of information by the financial oversight team. The fiscal health of nonprofit organizations can be inferred from its financial statements prepared by the financial mangers. This hear gives a descriptive view about the application of financial management in nonprofit organizations by taking into accoun t various aspects like their computer memory sources, economic consumption of its debts, performance rating techniques used by them and the governance mechanisms used. It ends with a conclusion and a few recommendations that can be suggested. hedge of Contents Table of Contents 3 Introduction 5 Sources of Funds 5 Use of Debt 7 Performance military rank 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 services 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. two equity and debt can form the cap ital structure of the nonprofit organizations 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 means 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 reenforcement 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 plan 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. Th e formulated plan should be balanced too. For any nonprofit organization, the primary sources of funds are as follows a. Grants Funding done 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 true 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