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California Management Review
California Management Review is a premier academic management journal published at UC Berkeley
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Article Information
Managing the Finances of Nonprofit Organizations
Herzlinger, Regina
21
/
3
(
Spring
1979
):
60
-
69
The article presents information about management of finances of nonprofit organizations (NPOs). Certainly inflation, unions and increased demands for services have affected costs of these organizations, but private-sector organizations also have to contend with these factors and seem to be more successful at it. The heart of the problem is internal and largely controllable. It lies in the neglect of proper procedures for fiscal management, a neglect that is apparent in the behavior of NPO managers and in the absence of systems of sound fiscal management. The indifference of the top managers of most NPOs to matters of fiscal management is pervasive, many of them are professionals, untrained and unskilled in this area, preferring to delegate it entirely to their technical subordinates or to dabble in it only to the extent of fund raising. On a technical level, organized, articulated and integrated systems for planning, resource allocation, budgeting and evaluation are usually absent. Many nonprofit organizations are deficient in one or more aspects of the fiscal management process and some are even more deficient in the fundamental element of any fiscal management system a sound system of accrual accounting. which enables revenues to be measured and collected.
