Jasmine Murphy University of Maryland university College October 15, 2013 Executive Summary The chief goal of a nonprofit Is not to make money, but to serve a public mission. However, to serve that mission, It needs to make money. Balancing a mission and funding Is what defines the not-for-profit organization and separates It from for-profit companies.
A nonprofit spends much of Its time and efforts attracting funds, often without even selling a product. A nonprofit can just ask people to hand funds over, and contributors willingly comply. On the other hand, a nonprofit has to convince contributors of the value of its mission and its ability to spend the contributor’s money wisely to meet that mission. In order for any organization to be successful, it is imperative that a very strong financial management program exists and be managed properly.
In nonprofit organizations, a strong financial management program is the most critical step in success of the organization. Before we can discuss why a financial management program is necessary In a nonprofit organization, I must first define what a nonprofit organization (NP) Is. A Nonprofit Organization Is a tax-exempt organization that has been put together with a common goal and/ or purpose In mind.
This organization Is formed to provide service to the public without obtaining or making a profit. In order for an organization to be classified as a nonprofit it must be charitable, religious, educational or scientific. Nonprofit Organizations do not distribute excess funds to its shareholders or owners, instead they reinvest all surplus funds to the organization in an effort to continue meeting and pursuing its goals and missions.