Not for profit organizations are growing immensely as a sector around the globe. There are several factors which are igniting the need of such welfare organization worldwide. Unlike profit-oriented organizations whose primary function is to wealth maximization of shareholders, not for profit organization as evident for its name is not operating to generate profit for their shareholders. Most not for profits organizations are operating to serve a welfare cause and humanity.
Objective Oriented Organization:
For every not for profit organization, there are set of objectives which need to be fulfilled by the organization. These predefined set of objectives are the reason for the existence of not for profit organization. By various legislations and By-laws not for profit organizations are bound to work towards that certainly defined objective.
Performance of not for profit organization in meeting a certain object should be a measurable commodity. For example, if a certain NPO has an objective to provide education to 50% of the homeless kids in the country. This can be quantified and estimated if the organization has met their objectives.
To meet certain objectives there are certain critical success factors which ensure that organization is on the right path to achieve objectives. These critical success factors are broken down form of objectives.
It is like a stepping stone which ensures the organization is step by step meeting the objective. For example, critical success factor for the 50% homeless kids education can be increasing admission percentage by 10%, increase the percentage of student retention by 15%.
These critical success factors can be monitored by key performance indicators. Various KPIs can be established against a single critical success factor. This close monitoring helps the organization to keep a close eye on their performance to achieve their critical success factors.
Beneficiaries of the not for profit organization must be predefined. Merit must be ensured in working towards transferring the benefit to the related beneficiaries.
For Example, if a certain not for profit organization is working towards taking care of the old age people. All the funds that are donated for this cause must be used in relevance with those beneficiaries because there are certain compliance audits which ensure that organization is spending the funds it is supposed to be spending.
Objectives of the Not for profit organizations have to be time restraint. Because time restraint element enables the organization to ensure that within a fixed period of time objectives of the organization are achieved and monitored.
As far as registering and not for profit is a concern, because it is a complicated process and it might deter people from starting a welfare cause. Best company formation services in London have introduced some auxiliary services to solve that problem for the people. This has enhanced the trend of not for profits around the globe.