Question

1. Describe the differences between management in the nonprofit sector and management in other sectors. How does the success of a double bottom line affect these management objectives?

2. Explain the differences between organizations classified under the 501 (c) (3), 501 (c) (4), 501 (c) (5), 501 (c) (6), 501 (c) (7), and the advantages and limitations related to each classification.

3. Define public, private, and common goals and the role of nonprofit organizations in providing them.

4. Describe the various types of boards, and the advantages and disadvantages of each of them. Explain the board’s legal and functional responsibilities.

5. Describe the responsibilities, of a nonprofit CEO and the relationship between the board and the CEO.

6. Define the concepts of accountability, effectiveness, and performance, and how a nonprofit organization can go beyond the requirements of the law to follow best practices in governing and managing the organization.

7. Discuss some tools that a nonprofit can use to develop a strategy for achieving its goals, create a strategic plan, and build organizational capacity needed to deliver its mission.

8. Explain the potential advantages and disadvantages of various types of nonprofit collaboration, and identify the circumstances affecting the success or failure of these collaborations.

Answer 1

Solution. We will discuss the above given statements one through eight below:

1.Non-profit sector is one which operates to serve a social cause and not aims at maximising interest of the entity. Other sector,here,we can assume the ones which operate in an economic market to maximise their profit/interest.

Management in non-profit sector encompasses all the principles functions of management namely-planning,organizing,leading and controlling.

Now,we will dicuss difference between the management in the non-profit sector and management in other sectors in case of planning and organizing done by the managers:

a. In the first step of planning- In case of non-profit sector,managers encompasses the plans to accumulate donations to support its cause of operation or mission. In case of other sectors, planning for both short and long span to achieve organisational goal is done in a way it can operate on less cost and make more profits.

b.In case of organizing- In case of non-profit sector, organizing representation done by the managers secure donators trust in the operations of the people. In case of other sector, organization of different task,groups,authority represents management's performance layout of different planned tasks.

First, we will understand the meaning of double bottom line system, it refers to a purpose set by the companies to achieve financial advantage along with social performance. Mostly companies aiming to attain this purpose uses the method of growing revenues and increasing efficiency. It adds to the task of calculating social impact of the entity for the management's objective by use of a comparable standard for social impact accounting called social return on investment.

2.It is a non-profit organization and among the organizations exempt from state taxation.We will enlist the differences,advantages,disadvantages related to each classification below:

a.501(c)(3)- This exemption applies to the entities that operate with the purpose of serving religious activities,charities,education,etcetera.

Advantage:It gets the support of reducing tax liabilities for the people donating/contributing.

Disadvantage:It will violate the policies if found serving as an agent to its donors.

b.501(c)(4)- The earnings earned by an organization working as a civic body will go to charitable purposes.Such entities can join politics but should fund less than half percent of earnings.

Advantage:Tax exemptions available for conducting operations under 501(c)(4).

Disadvantage: Money fueled in politics are taxable.

c.501(c)(5)-It encompasses labor organisations,agricultural organisations or a horticultural organisation. And such an organisation is assumed to provide service to its members first.

Advantage:It pays interests in order to increase efficiency to its members.

Disadvantage:Interests may not condition a specific member of the entity.

d.501(c)(6)-It encompasses such entities which operate not to gain interests or individual benefits.

Advantage:It qualifies under exemptions.

Disadvantage:It does not include hobbies of the members as business operation.

e.501(c)(7)-Here an organization is considered operating among members having common interests and goals.

Advantage:It provides room to members of such a group as well to their specified guests.

Disadvantage:It does not approve of gaining individual profit from group's earnings.

3.A non-profit organization operates to serve a cause.

Public goals serve as purpose of benefiting interests to people.It is attained by not attaining profit maximising processes by the non-profit organization.

Private goals are for accumulating funds in form of donations to finance the cause by non-profit organization by allowing people come together for a cause.

Common goals serve people to come together for a cause and provides special considerations such as tax exemptions,legal status,etcetera to the people.

4.We understand by the term board as a group of individuals referred as members who supervises an entity/organisation.

We can classify board into the given types:

a.Working boards represnts people who acquires duties of the organisation.

Advantage:They also serve as governing body to the organisation.

Disadvantage:Lack of resources to hire people can delay in working.

b.Governing board represents the leads who direct and control authority.

Advantage:They set initial work plan and enjoys authority.

Disadvantage:They does not come and control in the picture of operations carried out.

c.Fund raising boards represents the members responsible for accumulating funds in form of connections and representation.

Advantage:Gets to work and make connections outside the entity.

Disadvantage:Pressure of raising enough fund within prescribed time.

d.Policy boards refer to the members that directs the entity by laying out policies.

Advantage:Develops or enjoys policy  making authority.

Disadvantage:Responsible for operational decisions failure by the employees.

e.Advisory board members give their reports and suggestions to decision makers of an entity.

Advantage:Can involve in insights of every step of operation process.

Disadvantage:Have to rescue operation from failing in times of crisis.

5.Chief Executive Officer(CEO) is one who is at the top position of an entity needs active participation in all the processes of an entity.

Responsibilities of a non-profit CEO-a.In accumulating finance for the entity through communications and relationships.

b.Marketing and proper representation of its activities to the donators for developing trust.

The CEO reports to the board members unless he is himself a member of the board.Members of board are more focussed on operations whereas ceo is more into governance.

6.Accountability comes in the form of proper representation of work done and finances put foreward to the cause by the members to the people.

Effectiveness of work done to finance and support the cause undertaken by the entity.

Performance can be measured by public feedbacks and monitoring changes in the economy contributing to the cause.

A non-profit organization enjoys legal status and exemptions to accumulate from people and allows people come together for a cause. It eases government works by taking responsibilities to eradicate disease,poverty,etcetera.

7.A non-profit organisation takes the responsibility to serve a cause.

Developing a strategic planning encompasses by detailing about the responsibility/mission undertaken,vision to achieve the same,extrinsic and intrinsic factors,strategic issues,goals,developing staffing procedure,authority delegation,creating operating budget,evaluation of strategic planning practices.

8. Non-profit collaboration helps to develop efficiency of operations or to attain broader social and system change in economy.

Success of such a collaboration encompasses cost cut on operations,members help and communications.

Failure of collaboration encompasses differences arising in goal settlement,conflict among the members,non settlement in fund distribution.failure to appreciate each other's work,etcetera.