...All organizational information in this paper is obtained from the latest IRS Form 990 that could be found. The form was obtained from the Foundation Center Website. The name of the nonprofit organization of interest is The Sheltering Arms. It is located on Centennial Olympic Park Drive in Atlanta, Georgia. This organization is Georgia’s oldest nonprofit organization that majorly focuses on early childhood education programs. It is also one of the most respected organizations in the state. Its main mission is to give high-quality service to families. It also aims to provide affordable child care, education, and all-inclusive supportive services to the families in addition to providing professional development training to early childhood educators...
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...ReadingWhat is a Nonprofit?Key RolesThree Major Sections of Personnel in a NonprofitManagement Skills Generally Unique to NonprofitsCurrent Major Challenge: DevolutionRevenue: Fees and FundraisingUnique Nature and Struggles of Traditional Small NonprofitsGeneral ResourcesAdditional Perspectives on Nonprofit Organizations Also See the Library's Blogs Related to Nonprofit OrganizationsIn addition to the articles on this current page, see the following blogs which have posts related to Nonprofit Organizations. Scan down the blog's page to see various posts. Also see the section "Recent Blog Posts" in the sidebar of the blog or click on "next" near the bottom of a post in the blog. Library's Consulting and Organizational Development BlogLibrary's Leadership BlogLibrary's Nonprofit Capacity Building BlogLibrary's Supervision Blog Also seeRelated Library Topics Suggested Previous ReadingNote that the reader might best be served to first read the document Introduction to Organizations to understand the overall general nature of all organizations. As noted in that document, today's leaders are faced with continual change in their organizations. Consequently, today's leaders should have a strong sense of what their organizations are about. This document will accomplish that for nonprofit leaders. An organization is a collection of resources arranged to accomplish an overall goal. The purpose of a nonprofit organization is to meet one or more needs in a community. Each nonprofit describes...
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...Financial Disclosure Management by Nonprofit Organizations1 Ranjani Krishnan, Michelle H. Yetman, Robert J. Yetman* Eli Broad College of Business, Michigan State University, East Lansing, MI 48824. Tippie College of Business, The University of Iowa, Iowa City, IA 52240 ______________________________________________________________________________ Abstract This paper examines how nonprofit organizations respond to incentives to manage their publicly available financial information. Prior research identifies two operating ratios donors commonly use to evaluate the efficiency and effectiveness of nonprofits (i.e., the program service ratio, defined as the fraction of total expenses committed to advancing the charitable mission of the organization, and the fundraising ratio, defined as the ratio of fundraising expenses to donations revenue). Nonprofit managers have an incentive to over-report the expenses classified as program services and under-report the expenses classified as administrative and fundraising in order to improve these ratios. We examine whether nonprofits respond to these incentives, and we find evidence consistent with opportunistic cost shifting to improve the program service and fundraising ratios. Additional analysis finds that smaller nonprofits that are more reliant on donations revenue manipulate their operating ratios to a greater extent. JEL classification: M4; L3 Key words: Nonprofit organizations, earnings management, disclosure, hospitals. __...
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...of charitable organizations in the United States originated almost at the same time as the formation of our new nation. Benjamin Franklin, was one the founders of our nations and the earliest American philanthropists. He founded the University of Pennsylvania to educate youth. The early setters formed charitable and voluntary associations to help with issues of the era like education, orphanages, and illness (Arnsberger, Ludlum, Riley & Stanton, 2008 p. 1). Young Americans were able to form charitable organizations to fill gaps in the social welfare programs. Back then, charities were mainly hospitals and orphanages support by religious groups and wealthy individuals. During the 19th century, these organizations were controlled and founded by private corporations or a person (Arnsberger, Ludlum, Riley & Stanton, 2008 p. 2). The bloom of the American industry gave birth to bigger corporations; at the same time, the increase of more formal charitable organizations. It wasn’t until the late 19th century that government began paying more attention to this new sector. The first legislation the government imposed was in1894, the Tariff Act that established a flat two percent tax to corporate income, but excluded charities. However, the Tariff Act was declared unconstitutional two years after it was approved (Arnsberger, Ludlum, Riley & Stanton, 2008 p. 20). Later, a variety of additional legislation placed important restrictions on tax exempt organizations. Nevertheless...
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...Marketability of an Organization? Abstract Every type of organization both small and large needs marketing to survive and continue in business. Even though marketing may not be the reason why an organization was established, it stands as the core of business behaviors. Any type of organization can become a not-for-profit organization, but why? Why compete with for-profit businesses or go through the hassle of becoming established with the IRS? Not-for-profit organizations continue to show growth in its market of the US economy, equaling or even rivaling with their for-profit counter parts. How Does Establishing Not-For-Profit (501c(3)) Status Benefit the Marketability of An Organization? A Review of the Literature Not-for-profit organizations (NPO’s) serve a very important role in society and thus, are often given a special status. The Internal Revenue Service (IRS) is very selective when granting Section 501 status. Any organization can establish itself as a NPO, as long as it meets the metrics laid out by the IRS. The Section 501 status grants tax-exempt status within 24 different categories of organizations. (Andreasen & Kotler, 2008) 1. Are Not-For-Profit Organization Business Savvy? 2. What are the perceptions of Not-For-Profit Organizations? 3. How do Not-For-Profit’s differ from For-Profit Organizations? 4. Why become a Not-For-Profit Organization? This review of the literature on Not-for-profit organizations marketability focuses...
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...What is a Non-Profit Organization? A. The basic definition of a non-profit organization is not established for the purpose of making a profit; not entered into for money: a non-profit organization (dictionary.com). In a society where everything costs, how can it be that an organization can exist that is not established for the purpose of making a profit? What is their purpose? By answering these questions, one will gain an understanding of what a non-profit organization is as well as the history of how non-profit organizations came into existence. B. Digging a little deeper, the premise of a non-profit organization is that a non-profit organization is an organization which exists for educational and charitable reasons, and from which its shareholders or trustees do not benefit financially from. Any money earned must be retained by the organization, and used for its own expenses, operations, and programs. Many non-profit organizations also seek tax exempt status, and may also be exempt from local taxes including sales taxes or property taxes. (investorwords.com). Bottom line, their purpose of existence is for the greater good of the community by the services they offer. A few well-known non-profit organizations are Kaiser Permanente, Easter Seals, Habitat for Humanity, the Red Cross, and United Way. Although many of the aforementioned organizations have a different look and feel, they all share the same unique key characteristics of a non-profit organization. C. Some of those...
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...healthcare organization or nonprofit hospital to become income tax exempt under Section 501(c)(3) they must ensure that no portion of the hospital or organizations net earnings benefits any individual or private shareholder associated with the organization. When an organization qualifies as a 501(c)(3), the IRS presumes it is a private foundation unless the organization can show it is a public charity. This excludes statutory public charities such as schools and churches. A charity organization can lose tax exempt benefits if found to violate the private inurement proscription. Inurement violations can occur when a financial benefit occurs from the allocation of an organization’s financial resources to an individual without regard to exempt status in mind and based solely on the individual’s relationship with the organization. Individuals or private shareholders are known as “insiders” who have a personal interest in the organization’s activities or the individual is in a position to influence the organization (Zarzar, 2001). According to Karl Emerson, excessive compensation is the most common type of private inurement paid to insiders within an organization. There are other forms of private inurement that can cause an organization to lose their tax exempt status or impose intermediate sanctions such as: organizations purchase of an asset from an insider; sale of organization’s asset to an insider; the organization’s rental of property to or from an insider; organization lends...
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...Profit Versus Not-for-Profit Hospitals In Partial Fulfillment of the Requirements for Health Services Systems HSM 541 Blaise X. Schmidt DeVry University Keller Graduate School of Management September 2012 1.0 Purpose The purpose of this paper is to conduct a comparative analysis between for-profit hospitals and not-for-profit hospital. It will discuss the characteristics of each as well as factors affecting the operations of both systems. Additionally, it discusses potential areas of improvement and some of the challenges associated with each relative to finance and operations. 2.0 Comparing Not-for-Profit and For-Profit Hospitals Not-for-profit hospitals are organized under the Section 501 (c)(3) of the Internal Revenue Service (IRS) tax code, and as such, are exempt from federal and state taxes and generally from local property and other taxes. Not-for-profit hospitals also have access to tax-exempt bond financing and have tax-deductible status for gifts and contributions (Barton, 2010). For-profit hospitals do not have this luxury. Public or private hospitals can be classified as non-profit. Non-profits include a majority of the hospitals in the US. The two types of hospitals differ mainly in regulatory rules. Not-for-profit hospitals do not need to pay property, sales, or income taxes. For-profit hospitals do. Despite these differences, the two types of ownerships have been becoming more and more similar and many hospitals...
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...under the Internal Revenue Code, an organization must be organized and operate exclusively for exempt purposes set forth in section 501(c)(3). Earnings may not be received by any private shareholder or individual. The organization may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity against political candidates. The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals. The term “charitable” is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency (IRS. org, 2013). Charitable organizations are eligible to receive tax-deductible contributions. The Community Benefit standard was adopted in 1969 by the Internal Revenue Service (IRS) as an alternative basis for recognizing hospitals as income tax exempt. The community benefit standard for healthcare organizations offer unreimbursed goods, services, and resources...
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...guidance about an aspect of nonprofit corporate governance in the specific and limited context of the governance questions contained in the new IRS Form 990 (published by the IRS in 2008 and applicable to 990 filers based on a 2009-2011 filing year phase-in period depending on the size of the nonprofit). It is intended to provide some general guidance on the establishment of processes and/or policies to address a specific governance question in the Form. The subject matter of that question implicates a broad array of legal and practical issues ranging far beyond the immediate subject matter of the question itself. This material may address some of those issues but does NOT attempt to review them comprehensively and is NOT intended to be relied on for guidance on how they should be addressed in any specific situation. Whether or not a nonprofit organization adopts a specific governance process or policy (or modifies an existing one), either in response to the disclosure requirements of the new IRS Form 990 or to change its governance practices for other reasons is a matter to be carefully considered by that organization, with input from its board and advisors and evaluation of its specific circumstances. The IRS has explicitly stated that adoption of the policies and practices about which the new Form 990 asks is not mandatory, although the IRS has also indicated that it attaches significance to the manner in which all tax-exempt nonprofit organizations govern themselves. These...
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...Executive Summary Nonprofit organizations (NPOs) play a major positive role in all economies and societies that they service. These organizations have helped millions of people around the world by providing a great deal of valuable assistance and support via educational, scientific, charitable, legal, and many other means. An NPO is “a group organized for purposes other than generating profit and in which no part of the organization's income is distributed to its members, directors, or officers” (law.cornell.edu). Types of NPOs include volunteer service organizations, public charities and schools, public clinics and hospitals, political organizations, legal aid societies, labor unions, churches, research institutes, professional and environmental associations, museums, and some government agencies (law.cornell.edu). Some of the purposes service for these organizations include working for social change, to help people help themselves, and to fight for the civil rights of others. NPOs are a vital part of our nation’s economy, as they not only provide much needed public services to all concerned citizens and inhabitants of the U.S., they also provide millions of jobs for nation’s workforce. This essay will discuss the application of financial management techniques in NPOs. A comparison and contrast of nonprofit and for profit organizations (FPOs) will be examined while focusing on the fundamental differences between the two. How NPOs and FPOs are affected by different laws that...
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...Ans. 1 As per the rules and regulations in the Internal revenue service the allegation led by the company on the client, in the first case of unreasonable compensation The person's reward must be accepted in proceed by an "certified body." This can be the whole of a committee of the board, board of directors, or persons authorized by the board or other persons to act on its part. Thus, it is not obligatory to have the complete board agree the deal. It can be permitted by a board selected for the idea by the executives committee. They consist of minimum of two board members. However in IRS only one member is required as allowed under state's nonprofit business law. If tolerable by your state's nonprofit corporation act, a sovereign board consisting of non-board members can also be certified by the board to agree such dealings--for example, a board consisting of the managerial principal and chief financial officer. In this scenario there are three major shareholders in which one of the director is having 45% of the voting right there and his son is also having 45% therefore compensation is allowed. (IRS, 2014). This section will be purposed as the allocation is significantly unbalanced if— (i) The percentage which the selection companies stock which is investor owning bears corporation’s all voting stocks immediately after the redemption and was 80 percent for the first time. (ii) The share of the company’s voting stock owned by the investor owning bears corporation’s all voting...
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...Teaching Case Topic: Social Entrepreneurism Organization: Get One, Give One Foundation (GOGO) Event: Get One, Give One Foundation is a nonprofit organization founded in 2012 by Scott Nelson, a social entrepreneur from Washington, D.C. During Nelson’s time volunteering with a public kitchen in an impoverished area of D.C., he identified a need in the homeless population for sustainable winter coats. Because of this need, he developed Get One, Give One for consumers to purchase coats and winter accessories and use those profits to create similar sustainable coats and donate those to U.S. homeless individuals. In founding GOGO, Nelson properly filed the organization as a tax-exempt, 501(c)3 nonprofit with the U.S. Internal Revenue Service,...
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... Team Research Paper Fundraising for a nonprofit organization in a weak economy is very uncertain; not many individuals or businesses have the financial means to lend money. Thus, it is imperative to use all approaches to fundraising. Fundraising for a nonprofit organization typically involves applying for loans, grants, and using other forms of government and public assistance. When implementing non-traditional approaches to fundraising, it is important to use every possible means of government assistance, community support, and family contribution methods because there are limited the country’s economic status. Raising money based on contributions, sponsorships, personal investments, seeking family support, applying for a loan, and obtaining government grants are all effective ways of fundraising for a nonprofit organization. Another way of fundraising for a nonprofit organization is to use creative ways of providing a service to the community. Community fundraising requires detailed planning stages such as creating a plans and goals, picking a team, knowing the audience or customer, targeting the audience, and showing appreciation ("Community Fundraising Inc.," 2012). For any nonprofit organization, funding is a must . Funding is generally sourced from grants and loans. When a government grant is provided to nonprofit organizations an Internal Revenue Service 501 (c)(3) isn’t a necessity for qualification. When applying...
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...and gardens. The Music Center campus covers 12 acres in downtown Los Angeles. The largest venue is the Dorothy Chandler Pavilion, which seats approximately 3,200 audiences. Followed by the Walt Disney Concert Hall, Ahmanson Theatre, and Mark Taper Forum. According to the organization’s Form 990, their mission is to be “A leader at the cultural heart of Los Angeles County, the Performing Arts Center of Los Angeles County brings to life one of the world’s premier arts destinations by creating opportunities for arts participation, enabling compelling programming and providing first class facilities and services.” The audited financial statements and Form 990 will be used to analyze the financial health and position of the Performing Arts Center of Los Angeles. SARBANES OXLEY ACT The Sarbanes Oxley Act of 2002 required a number of disclosures, including information on internal control mechanisms, corrections to past financial statements, and material off-balance sheet transactions. The Act also requires companies to disclose information on material changes in the operations or financial situation of the...
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