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Financial Management First Student While Nonprofit And Essay

Financial Management First student

While nonprofit and for-profit organizations may have much similarity, they also have significant differences. From the tax perspective, for-profit organizations are taxed in various ways determined by the structure of the organization. For instance, small companies are treated as partnerships and sole proprietorships. They are monitored by the National Revenue Authority and the owners must be help liable for overall business debts. Their non-profit counterparts have the freedom to register for exception from income tax established by provisions of the tax code (Hyatt & Hopkins, 2012). People contributing towards non-profit organizations are eligible to tax incentives for their donations. Not-for-profit entities are treated as legal corporations for purposes of tax. This leaves the owners of the company not to be liable for debts.

The rationale for selected healthcare organizations to enjoy the tax-exempt status

Possible tax exemptions for selected healthcare organizations include tax exemption on fringe benefits, tax rebate on fringe benefits, imputation credit refunds, tax-deductible gifts, and exception from income tax. The rationale for selected healthcare organizations to enjoy the tax-exempt status is their responsibility to the society. The society expects these organizations to return the financial advantage by acting responsibly, remain true to their missions while contributing to the society (Hopkins, 2011). Horticultural and agricultural organizations are eligible for tax exemption status. They include groups involved in raising livestock, forestry, cultivating ornamental plants, harvesting aquatic resources and crops.

I would work in a for-profit organization. Perhaps the most obvious reason for my decision is the possibility...

The company will generate revenue beyond and above expenses, which will be distributed down the employees.
Second student

The fundamental differences between for-profit and a non-profit organization is premised on their reason for existence. Sales revenue in the form of receivables and cash is an attribute of for-profit companies. These organizations depend on suppliers, credit arrangements and earned income to finance their activities. On the contrary, not-for-profit organizations depend most entirely on grants and donations from government entities, individuals and organizations. The source of income determines how the organization can use its finances in both for-profit and non-profit companies (Oster, 2011). Because non-profit organizations derive money from donors, they are required to spend their finances in ways that maximize benefits the target recipients. Because for-profit companies generate their own revenue and are liable to their own debts, they are ethically obliged on how to spend their money.

The rationale for selected healthcare organizations to enjoy the tax-exempt status

The rationale for exempting selected healthcare organizations from taxes is because these organizations are not-for-profit corporations. Therefore, donations to these organizations would cost the government in the form of lost taxes. The government is partially supporting them, through tax exemption status. As a result, the public must expect to reap rewards. Religious organizations and churches qualify for tax exemption. In this case, church implies places of worship including synagogues and mosques. Religious organizations include ministries and other organizations engaged in the study or promotion of religion (Hopkins, 2011).

In this context, I would prefer…

Sources used in this document:
References

Hopkins, B.R. (2011). The law of tax-exempt organizations. Hoboken, NJ: J. Wiley.

Hyatt, T.K., & Hopkins, B.R. (2012). The law of tax-exempt healthcare organizations. Hoboken, N.J: Wiley.

Oster, S.M. (2011). Strategic management for nonprofit organizations: Theory and cases. New York: Oxford University Press.
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