Advanced Financial Accounting

Non-Profit Organizations
"Advanced Financial Accounting"

Profit Organization Definition
An organization, in the words of Mulyadi & Setiawan (2000: 1), is a group of people who have
various skills and depend on one another in order to achieve a shared goal while making use of
a variety of resources. (2000) Mulyadi and Setiawan
A non-profit organization is one whose objectives do not involve the generation of money
for the private gain of its owner or manager, according to Nickels et al (2009: 8). Non-
profit organizations frequently aim to make such earnings for the organization's social or
educational objectives rather than for personal gain (Nickels et al., 2009: 8)
General Non-Profit OrganizationsA non-profit organization is one whose major objective is

to support a topic or issue in gaining public attention for a non-commercial purpose, without
giving any consideration to issues of a financial character. Churches, public schools, public
charities, public hospitals and clinics, political organizations, community assistance in legal
matters, volunteer service organizations, trade unions, professional associations, research
institutes, museums, and some government officials are examples of non-profit
organizations.
Organizational traits of nonprofits
Anthony and Young (Gies et al., 1990)
attempt to define some inherent qualities, such as:
not driven by profiteering,specific factors that are taken into account when imposing taxes,There is
a propensity to only focus on the ministry,Many people face significant barriers in achieving their
goals and plans. Less dependent on his clients for financial supportsupremacy on the field,Political
influence typically has a major impact.

Organizations of a Non-Profit: Types
revenue generated by program activities, Since it is discouraged for non-profit organizations to make
money from their operations, doing so could be a sign that they are conducting business.
revenue generated by program activities, Since it is discouraged for non-profit organizations to make
money from their operations, doing so could be a sign that they are conducting business.
revenue from grants (grants),A non-profit organization will grant money to support a specific activity.
The providing organization, the sort of activity, the implementation, and the setting in which the activity
is carried out are all extremely distinct when it comes to grants. presenting recommendations, outlining
activities, and specifying the financial requirements.
Capital income, which is derived from an organization's capital or assets and is dependent on the
quantity of investment value, includes interest and other investment returns.
revenue from membership fees,It is customary for members of a community or nonprofit organization
with numerous members to pay dues.
revenue from commercial enterprises,A non-profit organization can earn direct income from commercial
enterprises by creating a unique unit and winning or owning shares or ownership of an enterprise.
Organizational differences between for-profit and nonprofit
There are numerous differences between for-profit and other organizations (profits). It's unclear who
exactly owns the nonprofit—whether members, customers, or donors—in terms of ownership. In a for-
profit business, the proprietor obviously benefits financially from the initiatives taken by the enterprise.
Nonprofits depend on donations as a source of funding to achieve their objectives. Unlike profit-making
organizations, which derive their funding from the revenues generated by the businesses they operate. In
the case of a profit-making institution, it is obvious who will be elected to the Board of Commissioners,
which will subsequently choose an Executive Director. However, this is not permitted in nonprofit
organizations. Owners of the organization are not members of the Board of Commissioners.
Organizations classified as nonprofits
Koteen (1991) identified the following Nonprofit Organizations (NPOs):

 Governmental organizations with legal status are permitted to dispense services and
collect taxes.
 Nonprofits in the private or independent sector that normally function as tax-exempt
entities but are constituted outside the purview of the legislative and executive
branches.
 The group may work in trade, professional, or humanitarian societies, or in
education.Quasi-governmental private organizations established with legislative power
are typically given a limited monopoly to supply services or essential necessities to
populations.
Conclusion
A non-profit organization is one whose major objective is to support a
topic or issue in gaining public attention for a non-commercial purpose,
without giving any consideration to issues of a financial character.
Churches, public schools, public charities, public hospitals and clinics,
political organizations, community assistance in legal matters, volunteer
service organizations, trade unions, professional associations, research
institutes, museums, and some government officials are examples of non-
profit organizations.

Advanced Financial Accounting

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Non-Profit Organizations

"Advanced Financial Accounting"

General Non-Profit OrganizationsA non-profit organization is one whose major objective is

Anthony and Young (Gies et al., 1990)

attempt to define some inherent qualities, such as:

influence typically has a major impact.

Koteen (1991) identified the following Nonprofit Organizations (NPOs):

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