There is a contrast in the administration and objectives of profit and for-profit organizations. The factors influencing the operations of two versions of organizations include taxation, asset sharing on liquidation, and profit allocation from operations. A nonprofit making corporation, such as healthcare provides its products and services to the public without the intent of generating profit or any income for its shareholders (Lauren, 2011). Profit corporations are established with the intent of generating profit or revenues for its owners and shareholders through the products it is associated with. Other distinctions are based on the taxation requirements. Nonprofit generating corporations are exempted from payment of taxes to the government which does the legislation of its operations. Profit generating corporations are entitled to pay taxes out of their gross income (Lauren, 2011).

A nonprofit organization is built on a mission to benefit the general community or the society at large. It may generate income from its marginal operations, but it cannot use the funds in any other way except for the mission objectives for which it is built for (Fritz, 2011). The earnings can also be used for its own internal programs, expenses, among other organizational operations (investorwords.com, 2011). This is a complete contrast to the profit-making corporations which is profit and revenue oriented. In the event of liquidation for a profit-making organization, its assets and all of the proceeds generated from it are distributed and shared equitably among all the shareholders. In the nonprofit organization, if there is a need for its liquidation, all of its assets are given to another nonprofit organization.

In order to improve the general financial status as well as operational performance, the nonprofit making organizations should be ready to adopt various financial management strategies. Budget planning is an effective means of ensuring an organization’s operations are conducted smoothly. Budgets in an organization are defined as operating plans for a given fiscal period. They are a means of expressing the organization boards as well as staff’s decisions on how to attain the stated purposes or goals (Anthony, 2004, p.1). Thus, it is essential for corporations to have a well prepared budget to run its operations. After the preparation of a budget, asset management and planning is an essential measure to ensure that financial operations move smoothly. The nonprofit organizations should look into the financing of current operations through efficient allocation of liquid finances, as well as maximizing the use of the already available resources to guarantee the return of the capital (Anthony, 2004, p.5). The use of fund accounting technique is also a way of ensuring the organization’s resources are allocated and used as intended.

Criticism on the healthcare organizations which operate for-profit is a common phenomenon in the recent times. It is through the heightened concern of the quality of service that is offered by the organization (Epstein, 2011). Some individuals argue that these healthcare concerns operate under economic considerations. Thus, the quality of health care a patient obtains is based on the financial position of the concerned patient. Some patients are turned away from private hospitals because they are not covered by the health insurance (Andre, 2011). Critics usually say that private healthcare institutions at times avoid providing emergency services to uninsured people who are, in many cases, poor people (Layne, 2011).

References

Andre, C. &. (2011). A healthy bottom line: Profits or people? Retrieved 07 18, 2011, from Markkula Center For Applied Ethics: http://www.scu.edu/ethics/publications/iie/v1n4/healthy.html

Anthony, R. N. (2004, 07). financial management of not-for-profit organizations. Retrieved 07 18, 2011, from Blackbaud: http://www.blackbaud.com/files/resources/downloads/WhitePaper_FinancialManagementForNPO.pdf

Epstein, B. E. (2011, 07 18). For-profit and not-for-profit health plans participating in medicaid. Retrieved 07 18, 2011, from Health Affairs: http://content.healthaffairs.org/content/20/3/162.full

Fritz, J. (2011, 07 18). How does a non profit differ from a business? Retrieved 07 18, 2011, from About.com: http://nonprofit.about.com/od/qathebasics/f/nopvspro.htm

investorwords.com. (2011, 07 18). Retrieved 07 18, 2011, from Non-profit organization: http://www.investorwords.com/3331/non_profit_organization.html

Lauren, L. (2011, 07 18). Profit vs. nonprofit corporation. Retrieved 07 18, 2011, from .org advance your mission: http://org.enom.com/profit-vs-nonprofit-corporation-253.html

Layne, E. (2011, 07). For profit vs. not-for-profit healthcare providers. Retrieved 07 18, 2011, from eHow Money: http://www.ehow.com/facts_5974131_for_profit-vs_-not_for_profit-healthcare-providers.html