Not-for-profit Organisations

Similarities between profit and not for profit

Differences

Charities

Charities exists to provide assistance in the form of goods, services or finances to disadvantaged or marginalised groups in society. It mainly relies on volunteers, donations to keep the organisation running

They both:

  • Require revenue
  • Incur expenses
  • Consists of people-- have people working within the organisation
  • Produce a product or service
  • Strive to satisfy consumers
  • Must be ‘managed’
  • Management skills and techniques often
    transferable across the two sectors
  • Two types:
    – Charities
    – Government organisations

Government Organisations

e.g. Doctors Without Borders

Real life examples

There are three types of HR in a charity

Charity - Salvation Army
-international charitable organisation

  • Established with a specific mission to help a particular cause, raises its own funds from donations.
  • sought to bring salvation to the poor, destitute and hungry
  • running charity shops, operating shelters for the homeless and disaster relief and humanitarian aid to developing countries



They are funded through taxpayer revenue and exists to benefit the tax organisations

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Profits in a charity is called surplus

Government Organisations
-Australia Post
-Australian-Government-owned entity
-To deliver a series of benefits to taxpayers

  • to ensure that every dollar goes as far as possible so that it is not wasted- maximum output

paid staff: paid at market rates

paid staff: below market rates

volunteers: relies on the volunteers' goodwill to keep the charity running

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Generally supplies goods/services that cannot or unlikely to be supplies by the private sector.-------public goods <defence,transport infrastructure>.merit goods<health services,education>
Not designed for profit maximisation but value maximisation
Each ministry,department,and local authority given strict budget
Increases in productively key to success

surplus is reinvested back to the charity for future activities

Aim is to benefit society rather than for individual success and health

Losses in a charity is called deficits

Not for profit organisations don't have an owner whereas for profit may have one owner or many owners

must be made up by revenue, to ensure the charity's long term operation

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Many not for profit organisations are tax exempted whereas profit organisations must continue to pay for taxes

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A not-for-profit is an organisation that does not operate for the profit, personal gain or other benefit of particular people,, but to help certain people in the community. These types of organisations are usually in the form of a charity. A for profit organisation is an organisation thats main goal is to generate a profit for their organisation

competitions between organisations within each group involves different pressures. Rather than competing for product sales which is evident in a for profit organisation, not for profit organisations are competing for funds, members, sponsors, media exposure and supporters

talk about profit and not for profit organisations. the similarities and differences. An example of profit and not for profit organisations. and then real life examples.