Lesson 9

Question 1

1. describe the unique characteristics of not-for-profit and government organizations.

Answer 1

• NFPOs differ in that they provide goods or services without the expectation of profit. They do this by raising resources and distributing them in a manner that fulfills objectives
• Resources are provided by contributors without the expectation of gain or repayment. Most consist of donations and grants. Some have restrictions on how the $ can be spent
• There is no readily defined ownership interest that can be sold or transferred or redeemed.
• They are governed by volunteers who receive little or no remuneration or gain for their time and effort. There are few paid employees
• Both
o Lack of profit motive/focus on value generation
o Certainty of income (taxes)
o Evaluating mgr’s performance based on stewardship
o Focus on fund accounting and mgmt. of funds
o Gov’ts are public not for profit