Non-Profit Organizations

Non Profit Organizations

References

1. It is well aware that nonprofit organizations work in a different way. The main objective of the nonprofit organizations is to address the economic, social and educational needs of the public. The success of the nonprofit organization depends on its leadership, efficiency of the employees and its outcomes. So it is very important that a person should have the skills, abilities and knowledge to run the nonprofit organization effectively and efficiently. There are lots of techniques which are used by nonprofit organization to measure the management and employee efficiency within the organization. But two most important techniques are the nonprofit budgeting and accounting and fundraising and grant writing.
2. Nonprofit budgeting and accounting defines the financial situation of the company. Generally, the nonprofit organizations have the advantage of receiving the tax exemption. Nonprofit organizations have to use the special method of reporting and accounting because it receives the funds from various sources. It helps in monitoring and using the cash flow in proper way and executing all the predefined activities in a predefined way.
3. Second the employee efficiency is measured in terms of getting the funds and grants. It is very important for the nonprofit organization to raise the appropriate funds to run the organization and executing the services. So if it is important that employees should be talented enough in raising the funds from the different sources and in writing the grant. If a nonprofit firm has enough number of funds, it means the firm is capable of surviving in the market.
4. Actually, financial and management evaluation ratios such as return on assets (ROA), return on equity (ROE), economic value added (EVA), and market value added (MVA) do not apply to nonprofit organizations. All these ratios are the profitability indicators that show the status of the company. These financial and management evaluation ratios are used to calculate how the management is performing to earn the profits. But nonprofit organizations work in favor of the society. These firms identify the social problems and resolve it. So these firms have to generate the funds from the different sources to achieve its goal and use these ratios in different ways. These ratios are very helpful for the non-profit organizations to calculate its efficiency in terms of its financial stability.
5. Economic value added ratio helps in calculating the revenue and cost. It includes three main components – increased revenue, decreased cost and time. It is very important for the nonprofit organization to calculate it. For example – it may be difficult or impossible to calculate the economic value added for the nonprofit organizations like the zoo, and museum etc. But these services are considered important for the community because it creates the intrinsic value. So the non-profit organizations use time and energy as the important factor to calculating the economic value of their services.
6. Like economic value added, market value added is also used in different ways in nonprofit organizations. If the value is not available, the resources receive from the government or other services are used for calculating the market value added in the form of the voluntary contribution or in-kind donations. Then the value of the non-market items adds to the financial resources that is received to come up with a proxy for market value.

http://patimes.org/nonprofit-management-techniques-ensure-success/

https://books.google.co.in/books?id=nvxLHDR6f_kC&pg=PA180&lpg=PA180&dq=market+value+added+apply+on+non+profit+organizations&source=bl&ots=R41Vq_EA6r&sig=SIFypuL6jtE4F9R0Olmbl5fZHS8&hl=en&sa=X&ved=0ahUKEwix3dXAu6TNAhVFv5QKHbmPCW8Q6AEINzAE#v=onepage&q=market%20value%20added%20apply%20on%20non%20profit%20organizations&f=falsehttps://books.google.co.in/books?id=nvxLHDR6f_kC&pg=PA180&lpg=PA180&dq=market+value+added+apply+on+non+profit+organizations&source=bl&ots=R41Vq_EA6r&sig=SIFypuL6jtE4F9R0Olmbl5fZHS8&hl=en&sa=X&ved=0ahUKEwix3dXAu6TNAhVFv5QKHbmPCW8Q6AEINzAE#v=onepage&q=market%20value%20added%20apply%20on%20non%20profit%20organizations&f=false

http://ssir.org/articles/entry/how_nonprofit_economic_value_creates_new_capital_sources