Financial Management In Nonprofit Organizations Essay

Financial Management In Nonprofit Organizations Essay

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A not for profit organization is a corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive (Legal, 2013).” There are immense community benefits as a not-for-profit generally accepts everyone regardless of ability to pay. Nonprofit organizations are granted tax-exempt status which helps them to provide services to the public and are expected to be effective managers of their finances as well as being efficient (Financial Management, 2010). In doing so, they can gain exemptions from federal and state incomes taxes and have the ability to solicit tax-deductible contributions (Financial Management, 2010). Organization must follow legal financial requirements and always adhere to sound accounting principles that produce reliable financial information (Financial Management, 2010).
Background
There are several types of not-for-profit organizations including charitable hospitals, research institutions, educational hospitals, and public health programs. Charitable hospitals provide basic, extensive and emergency health care, but are exempt from federal, state and local taxes, and raise money from the charitable contributions of donors (Litten, et al, 2010). Financial assistance policy needs to be clear and concise and charges should be limited as the majority of the people will be poor and needy. Billing and collection policies should include ‘reasonable efforts’ to determine assistance eligibility (Litten, et al, 2010). Educational hospitals provide clinical education and training to student doctors, nurses and other health care professionals, as well as traditional basic and emergency care and testing and lab services (Medical Dictionary, 201...


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...http://managementhelp.org/businessfinance/index.htm?PHPSESSID=900e2200ce5dd66bf5c5a7252
Medical Dictionary. (n.d.). Retrieved February 24, 2013, from http://medical-dictionary.thefreedictionary.com/teaching+hospital
National Institutes of Health (NIH). (n.d.). National Institutes of Health (NIH). Retrieved February 28, 2013, from http://www.nih.gov/
Parrino, R., Kidwell, D. S., & Bates, T. W. (2011). Fundamentals of Corporate Finance. Hoboken, NJ: John Wiley & Sons. (Original work published 2009)
What is Public Health?. (n.d.). What is Public Health?. Retrieved March 1, 2013, from http://www.whatispublichealth.org/
Zietlow, J., & Seidner, A. (n.d.). Cash & Investment Management for Nonprofit Organizations. Bizknowledge Info. Retrieved March 28, 2014, from http://www.bizknowledge.info/My-books/Wiley-Cash-%26-Investment-Management-for-NonProfit-Organizations.pdf

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