Issues Facing Non Profit Organizations

Issues Facing Non Profit Organizations

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Issues Facing Non Profit Organizations

Fox Valley Hands of Hope is a non-profit organization that has been in operation for thirty-five years serving the Fox valley Community. The organization focuses on the provision of exemplary services to individuals facing near death illnesses. Over the last five years, the company has recorded decreased federal funding, as it now receives two-thirds of what it used to in 2010. The funding amounts contrasts the federal budget given that donation have increased since the year 2010 (Hoque & Parker, 2015). This makes non-profit funding an uncertain process. According to economists, despite donor numbers decrease, per capita giving is increasing. Personal donors who remain consistent in their giving increase their donations leading to conflict between non-profit managers and their serving communities. The public is not aware of how non-profit organizations work resulting in the availability of several avenues for conflict. There is need for public awareness on the modern non-profit organization in terms of economics. Moreover, there is need for more effective fiscal analysis by the federal government in order to improve resource distribution for non-profit organizations.

Various factors influence budget determinations. Some of these factors are unpredictable meaning that resource distribution always faces the risk in uncertainty. According to the government budget, the level of non-profit donations given in the year 2011 was 7.5% (Hoque & Parker, 2015). This was a value more than twice of 2002, which was 3.9% (Hoque & Parker, 2015). Contrastingly, funding has gone down due to the unprecedented factors such as natural and man-made disasters that necessitate redistribution of resources. After the 2009, Recovery and Re-Investment Act, non-profit organizations suffer state and federal budget cuts. The matter is even worse given that the number of such organizations have increased. The issue is of importance in modern management because it teaches on the uncertainty involved in large-scale economic budgets. Moreover, it teaches on how solicitation is changing the non-profit industry into one that requires self-sufficiency.

The present non-profit sector needs to think outside the box in order to derive novel ways of acquiring operational funds. The status quo employed by traditional organizations is no longer adequate to meet the present market demands. Fox Valley Hands of Hope needs to establish a new way of growing its income. In addition, the income streams for generating funds need to be flexible or static in the face of novel risks. Economists argue on the ‘fallacy of composition’ within the non-profit sector. In meaning, economists argue that for long-term income generation, non-profit organizations need to implement fiscal solutions that are unique to other charities. In addition, they need to implement public awareness programs to educate their community on how resource distribution is undertaken by the federal government and by the organization.

The case by Fox Valley Hands of Hope makes a compelling argument given the volatility and dynamicity of the modern global economy. Fiscal planning is a complex process as it integrates many variables in its formulation. Non-profit organizations need to carry out their own market analysis based on their serving communities in order to identify their changing needs. The data collected is then employed to guide on designing the corporate structure in terms of operations. The federal government needs to improve resource distribution for non-profit organizations through more effective fiscal evaluations. Non-profit organizations over the coming years will have to invest to improve their funding despite the gradually increasing federal funding meant to increase volunteering.

References

Hoque, Z., & Parker, L. D. (2015). Performance Management in Nonprofit Organizations: Global Perspectives. Thousand Oaks, Calif: SAGE.