Non-profit Organizations in US

Numerous causes have contributed to significant changes in non-profit organization management during the past few decades. One important issue is the emergence of competition as a result of the different adjustments made to funding patterns, sector expansion, and greater accountability demands. Since the 1980s, the federal government has steadily cut funding for different social programs and state government financing while increasing the outsourcing of the provision of human and social services to non-profit organizations. Additionally, some donors see non-profit organizations as a crucial tool for tackling a range of societal issues that are essential to advancing their own personal interests. Despite numerous government efforts social problems such as poverty continue to persist, therefore, nonprofit organization provides a favorable way to address the situation. Additionally, non-profit organizations reflect God’s design that allows individual the care for the well-being of their fellow men (Worth, 2017).

The increased number of a nonprofit organization has increased the need for accountability, thus increasing the need for measurable results. The American Red Cross is a large nonprofit organization that plays a crucial role in saving lives by providing disaster relief on various patterns of the country. The nonprofit organization workforce comprises of 90 percent volunteers. The American Red Cross readily responds to people in need either at the workplace or at home (American Red Cross, 2017). 

Fundraising

A non-profit organization like the American Red Cross incurs numerous cost while undertaking their operations, therefore, a significant number of donors prefer organizations that have a low-overhead and fundraising costs. Therefore, Red Cross ought to ensure that their fundraising costs are fairly reasonable over the long term where the recommended fundraising ration ought to be 3:1. A Non-profit organization needs to ensure that a large number of their total expenditure ought to service program related activities to ensure it effectively employs donor funds. The high cost of raising funds illustrate the high cost may indicate fraudulent or unethical behavior, as well as inefficiency. Numerous organization for accountability purposed is rated based on their overhead cost and fundraising cost. Large overhead cost indicates that the organization spends too lavishly salaries and additional overhead costs. However, critiques claim that rating organization using their fundraising or overhead costs can lead to perverse incentives. For instance, organizations may simply engage in the creative account by allocating cost to programs instead rather than administration (Worth, 2017).

Moreover, low-fundraising cost put young organizations at a disadvantage, as young organizations ought to invest a significant amount of money developing a database. However, for Red Cross to appeal to donors they need to ensure that their organization ought to ensure it minimizes its overhead costs and its fundraising costs. Financial ratios provide critical insights into the various operations of an organization, but the ratios do not effectively represent the entire picture. Therefore, it is important to incorporate a wide scope of data when rating non-profit organizations (Worth, 2017).

Business Partnerships

Partnerships offer crucial opportunities for new revenue as well as visibility that allow nonprofit organizations to acquire visibility. Additionally, partnerships allow nonprofit organizations to access volunteers in addition to acquiring management skills. Corporate philanthropy is still an important force; in 2011 companies gave 14 billion USD in cash as well as company products towards charity. The more corporate company sponsors various events including rides, runs, athletic competition or charity walks. When corporate partner with the nonprofit organization they use their name and logo, thus they are able to get additional visibility. On the other hand, it is important for a nonprofit organization to take caution regarding the corporation they associate with, for instance, an athletic event is unlikely to accept sponsorship from a tobacco company (Worth, 2017). Therefore, Red Cross ought to review sponsorship opportunity, since the decision made reflects on the decision made by the organization’s board.

References

American Red Cross (2017). American Red Cross. Retrieved 4 August 2017, from http://www.redcross.org

Worth, M. J. (2017). Nonprofit management: Principles and practice (4th ed). Thousand Oaks, CA: Sage Publication ISBN 9781483375991