Financial management Essay Example | Topics and Well Written Essays - 1500 words

Financial management - Essay ExampleThis is different from For-Profit organizations that source their money from sh atomic number 18holders who are the real owners of these organizations. Organizational structure of nongovernmental organizations and For-Profit are a bit similar in the sense that both set of organizations are managed by boards of directors. Financial management entails the processes of budgeting, Taxation and corporate governance. NGOs typically have financial budgets prepared over the terminus of the activities they are undertaking. On the other hand, For-Profit organizations have their financial budgets prepared for a period of one financial year. Governments levy taxes on all organizations for the purpose of implementing public project or serve well provision but with the exemption of NGOs. match to Brigham (2010, 65), the main difference between NGOs and For-Profit organizations is the objectives and goals of these organizations. NGOs are set up to provide ch aritable goods or services to commonwealth without need of making a profit. This major differentiating factor is the reason behind the differences in financial management practices between these organizations. Corporate governance is important in implementing integrity and management of organizational strategies. NGOs are not particular in enforcing prudent corporate governance practices compared to For-Profit organizations. ... NGOs are organizations which are not set out to overhear profits but instead they are meant to provide a service. This is opposed to profitable organizations which are meant to make profits. Organizational Structure The organizational structure of NGOs is different from that of a profitable organization in that NGOs are mandated to domiciliate services compared to profit organizations which are meant to make profits. NGOs are registered or mandated either by governments or special bodies to undertake projects or service delivery to different people. The m ajor difference between NGOs and profit organizations stems in the ownership structure of the two bodies. NGOs are owned or operated by a board of directors or a steering committee in some cases this board of directors is responsible for drawing up the financial strategies for the organization. The board of directors of an NGO are responsible for sourcing funds for the organization through different ways (Brigham 94). In some instances, some NGOs have adopted the structure of a private company and used this structure to manage their financial operations. Most NGOs source their funds from governments, churches and donations this is because these organizations act as governments and they only use their funds for capacity building. This is in contrast to profitable companies whereby ownership of these organizations belongs to some individuals. Profitable companies are owned by people known as shareholders shareholders are responsible for funding the organization to undertake the goals and objectives of these organizations. Public owned organizations are profit organizations which comprise of a some(prenominal) owners in a company