An Insight into Financial management Practices of Non Governmental Non-Profit Organizations

Authors

KOLAŘÍKOVÁ Dominika PEJCAL Jakub

Year of publication 2018
Type Article in Proceedings
Conference Current Trends in Public Sector Research
MU Faculty or unit

Faculty of Economics and Administration

Citation
Keywords non-governmental non-profit organizations; financial management; financial health; finacial stability; ratios
Description Just like profit organizations, also non-­governmental non-­profit entities are at risk of financial vulnerability. This can be a result of unstable sources of funding or poor management thereof. The latter cause can be eliminated by using financial management tools. A "right" spending of the limited resources can allow for a long-term performance of the organizations' mission. The aim of the present paper is to describe the level of use of certain financial health assessment tools in selected Czech non-­governmental non-profit organizations (hereinafter referred to as "NPOs"). The paper is based on the authors' research on the knowledge of selected NPO representatives about specific tools (or more specifically ratios) and their practical application. Furthermore, the paper attempts to compare the perceived situation with the actual situation of the organizations' financial health as assessed by the authors' own calculation of the given ratios. Quantitative and qualitative data on the selected sample of NPOs (foundations) are used to illustrate common financial health management practices that can be surprising to a certain extent. In fact, basic financial management tools are used to a rather limited extent and in assessing the entity they represent the responsible persons often "play it by ear".
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