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Not For Profit Organisation

Presented By:Deepak Saini-11BSP1937 Yatin Mundeja-11BSP1229

as defined by law. or directors. officers.Non Profit Organizations A non profit organization.  Organisations . is an organization that cannot distribute assets or income to. which are formed not for earning profits but for a charitable or social purpose are called as not for profit organisations. or for the benefit of. its members.

Special Characteristics  Absence of the profit measure capital  Contributed  Fund accounting  Governance .

not a motivator Funding Accounts .FEATURES 1) 2) 3) 4) 5) 6) Separate legal entity Service motive Form Profit.

 . These are the separate entity promoted by individuals or companies. but these are not owned by the promoters or managers.Separate legal Entity  According to the principle of separate legal entity. a not for profit organisation is an separate entity independent of its members.

motive is to provide services. providing services to its members.  Main .Service Motive These organisations are formed  For  For welfare of the society.

Form        Charitable hospitals Schools Trusts Colleges Clubs Hospitals Societies .

Some NPOs may involve in trading activities Main objective is not to earn the profit but to benefit the members and society. charity. commerce. education. science.Profit – not a motivator      NPOs do not operate with the objective of earning profits. sports etc. religion. . culture. Any excess of income over expenditure is termed as SURPLUS while any excess of expenditure over income is termed as DEFICIT. Their aim is to promote art.

Grant-in-aid.Funding The main sources of income of such organisations are:     Subscriptions from members. etc. Donations. Legacies. .  Income from investments.

Accounts  The Not-for-Profit Organisations are also required to prepare financial statements at the end of the each accounting period.  They . have to prepare their final accounts at the end of the accounting period and the general principles of accounting are fully applicable in their preparation.

. and Balance Sheet.The final accounts of a ‘not-for-profit organisation’ consist of the following: Receipt and Payment Account Income and Expenditure Account.

.Management control system  Product pricing: Many nonprofit organizations give inadequate attention to their pricing policies. A nonprofit hospital should price its health care services at full cost. but prices in its gift shop should be market based. Pricing for peripheral activities should be market-based. Pricing of services at their full cost is desirable.

even though the budgeted amount may be higher than is neccesary. strategic planning is a more important & more time consuming process than in the typical business.Management control system  Strategic planning & budget preparation: In nonprofit organizations that must decide how best to allocate limited resources to worth-while activities. Operation & evaluation: In most nonprofit organizations. therefore. especially from government resources. there is no way of knowing what the optimum operating costs are. Many organizations have had increasing difficulty in raising funds. tend to spend whatever is allowed in the budget. Responsibility center managers.  .