Purchase Solution

Non-profits and the cost of capital from contributions.

Not what you're looking for?

Ask Custom Question

Comment of the following statement. When a not-for-profit facility receives a contribution from a member of the community, the cost of capital is inconsequential when deciding how to use this contribution, because it is, in effect, free money.

Purchase this Solution
Solution Summary

The solution discusses the following comment:

When a not-for-profit facility receives a contribution from a member of the community, the cost of capital is inconsequential when deciding how to use this contribution, because it is, in effect, free money.

Solution Preview

This statement is incorrect. The money is not free for the non-profit organization. The money is revenue in the form of a contribution. The money has to be accounted for properly as revenue, but it doesn't stop there. The non-profit must also practice corporate governance, ...

Purchase this Solution
Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

View More Free Quizzes
Related BrainMass Solutions

  • Contractors and Joint Ventures

    However, regardless of whether the joint venture is an integrated or non-integrated joint venture, provisions must be included that address the responsibility of the parties for working capital contributions and overhead: * Working capital obviously

  • Investment opportunities for a Non-Profit Organization

    So, the increased contributions and salaries saved would be compared to the cost of the software. The method can be any or all of the traditional: payback, NPV, IRR.

  • Strategic plan

    Future position: From the acquisition of Broadspire Disability we can reach the conclusion that Aetna is interested in long and short term disability administration and leave management.

  • St Jude Hospital Revenue Scenario

    The sources of capital available to the not-for-profits include charitable contributions and debt offerings-unless they are governmental, in which case, higher taxes are also an alternative.

  • Return on investment in landscaping business; nonprofit goal

    Non-profits have all kinds of missions, generally to serve as many as they can, find cures for diseases, take the word of God to foreign lands, offer medical procedures to sick kids in poor countries and so forth.

  • Calculation of Domestic Output and National Income

    Now determine NI in two ways: first, by making the required additions or subtractions from NDP; and second, by adding up the types of incomes and taxes that make up NI. c. Adjust NI (from part b) as required to obtain PI. d.

  • Philosophies of non-profit organizations

    Both have to generate money to pay their bills and, if the corporation is to acquire new assets and grow it needs profits both to use for this as well as to attract new investment (in the case of a non-profit, new investment takes the form of contributions

  • Tax planning ideas for Kevin and Janet: IRS rules

    Limitations are an issue in the case of losses, but profits are income regardless. The amounts flowing from K-1s might have changed this analysis of passive gains/losses, but both of them are also profits.

  • What constitutes a pledge or contribution?

    Another example might be that a donor will pledge to donate any profits from the sale of land, if and when the land sells.

View More Related Solutions