How do philosophies and share-holding vary among for-profit and not-for-profit organizations when considering financial profitability?
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RESPONSE:
- How do philosophies and share-holding vary among for-profit and not-for-profit organizations when considering financial profitability?
There are similarities between for- profit (FP) and not-for-profit (or non-profit) (NFP), including:
?Both are generally corporations in which assets are held and business transacted in the name of the corporation rather than the individuals involved.
? To survive and grow, both need to generate or bring in more revenue than they spend on operations.
?Both are involved in producing a good or service for society.
?And, both are managed and run by the people who are employed by the corporation. http://hubpages.com/hub/For-Profit-vs-Non-Profit-Form-of-Business).
DIFFERENCES
However, the two types of business organization also differ and vary in philosophies and share-holding among for-profit and not-for-profit organizations when considering financial profitability.
For-Profit (FP)
?A for profit corporation is created when investors get together and transfer assets, money and/or talent to start the corporation.
?For profit business generally have a single focus and that is to make money for their owners.
?The for-profit is intended for the benefit of its owners. (http://www.scoreknox.org/library/versus.htm).
?Exists primarily to generate a profit, that is, to take in more money than it spends.
?The owners can decide to keep all the profit themselves, or they can spend some or all of it on the business itself.
?Or, they may decide to share some of it with employees through the use of various types of compensation plans, e.g., employee profit sharing (http://managementhelp.org/org_thry/types.htm).
Not-for-profit (NFP)
?Note: Not-for-profit does not mean that the organization operates at-cost or at a break-even level. It also does not mean that the organization is prohibited from producing revenue through its activities or from generating a surplus. All the term not-for-profit is meant to indicate is that the organization does not operate with the primary purpose of generating profit (http://www.ontario.coop/upload/FACTSheet%20NFP%20vs%20FP.pdf).
?Non-profits?philosophies and shareholding when considering financial profitability are more …
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