CIMA BA1 Syllabus B. Microeconomic And Organisational Context Of Business - Not for Profit objectives - Notes ^{2 / 13}

A not-for-proﬁt organisation’s primary goal is to provide some socially desirable need on an ongoing basis.
A not-for-proﬁt generally lacks the ﬁnancial ﬂexibility of a commercial enterprise because it depends on resource providers who often gain no tangible benefit themselves.

Charities, unlike companies, do not have shareholders.

Charities could not operate without the work of employees and volunteers, or without donations from their donors, so these are both important stakeholder groups.
The objective of a charity is to provide help or support for its beneficiaries, so beneficiaries are also an important stakeholder group.

The non financial objectives are often more important in not for profit organisations.
However, they are harder to quantify
eg Quality of care

Economy – Buy goods at minimum cost (still paying attention to quality)
Efficiency – Use these goods to maximise output
Effectiveness – Use these goods to achieves objectives
Another way of looking at these is:
Economy - ‘doing things at a low price’
Efficiency - ‘doing things the right way’
Effectiveness - ‘doing the right things’
A final way of looking at these is as input - process - output
Inputs - Economy - get as cheap as possible given quality
Process - Efficiency - perform the process as efficiently as possible
Outputs - Effectiveness - These match the objectives set
Input driven - Try to get as much out given limited inputs e.g. library
Output driven - Maintaining standards even when output changes eg Prison service