Running Non Profit Organizations

February 4th, 2012

 

Non profit organizations are also called incorporated organizations. Such organizations are created for charitable or education purposes and no financial benefit are expected by the trustees and shareholders. The money that the organization earns is kept by the organization for running its programs, expenses and operations. The status of tax exemption is sought by most of the non profit organizations. Property taxes and sales taxes are examples of local taxes that the organizations can be exempted from. Red Cross, Habitat, United way and Humanity are examples of non profit organizations that well known.

There are certain characteristics that are associated with these organizations, in showing their effectiveness. One of the characteristics is its mission being fulfilled appropriately by having strong governance, proper management and being results oriented. There are certain characteristics that need to be looked into during the establishment of the organization because future lenders will assess them. This includes accountability being clear, the mission being vital, revenue streams being diverse and reliable, facilities being adequate while the services and programs are of an acceptable quality. Therefore these characteristics must be considered during the establishment of the non profit organization.

Generally, the society views the individuals running non profit organizations as people who are after the money and newspapers headlines also carry these negative messages. Consequently, such organizations are encouraged to come up with a code of ethics and be certified as ethical organizations. Thinking through the negative issues will be easier when you have the code. The codes are also needed in daily operation especially with newly established organizations. The policy’s ethical precepts need to be introduced to employees for them to be following. When employees are being trained, the values can be reinforced, the code’s language will be explained, while hypothetical and situations that have been experienced can be discussed.

Non profit organizations need to learn ethical principles most of which are associated with organizations for profit making. This includes being respectful and honest. The stakeholders need not to forget that they are not meant to benefit from the money made there. Many scandals will be experienced by the organization if sight is lost. The topics that are covered by nonprofit ethics include transparency, honesty, conflict of interest, about fundraising and treatment of clients, employees and volunteers with respect.  The most crucial principle is honesty because where it lacks, reputation is damaged with ease.

Transparency is at times referred to as openness. When there is openness regarding the operations of non profit organizations, public trust is likely to be maintained. Scope of activities, mission values and how revenue is used need to be articulated by appeals for fund raising and website. Yearly reports and financial statements that have been audited should also be released and let the organization’s accomplishments and goals be outlined too. Due to regularity in the non profit organizations, conflicts of interest are likely to occur. Professional abilities of board members can be utilized. Such conflicts can also be seen with clients, employees and volunteers.

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General Information on Antitrust

February 4th, 2012

Without antitrust laws, there would be less healthy competition among businesses and thus, less choice for the consumers. The basic antitrust laws require that consumers must be protected from harmful competition practices among companies. For example, unfair practices by a company in an attempt to obtain a monopoly over the market might be covered by antitrust laws. In case of any foul play, several state divisions have been authorized to be actively involved in the recovery of huge amounts of money on behalf of the consumers. These measures have ensured that most companies consider the consumers first ahead of their profit schemes.

Each state has its own antitrust laws and although many of them differ, they might share some similarities because of their common purpose to protect consumers. It is therefore prudent for one to understand the laws governing antitrust in the particular state in which they reside. This is beneficial for both the consumers and the companies. Consumers in most states are offered the opportunity to present their complaints by whenever they experience unfair practices by any company. Many of these complaints are later made public especially when investigations are being undertaken and the corrective measures are put in place.

Offenses covered under antitrust enforcement are many and as varied as businesses come. You can find lawsuits ranging from price-fixing to suits against companies that fail to comply with quality requirements. One of the most famous antitrust lawsuits involves computer software manufacturers, which have tried to control the most share of the lucrative market. Due to the freedom enjoyed in software programming, it is difficult to determine the source of an original concept used by many different companies. This has been attributed to the diversity of the Internet and development in the world of technology. However, new laws attempting to rein in on piracy continue to be enacted.

Most antitrust laws have indeed benefitted the consumers who have been aggrieved by some companies. Apart from the improved quality of services, there have also been financial rewards as the states have attempted to recover damages caused. For example, in the state of Vermont, a settlement was reached worth thousands of dollars with some vitamin manufacturers who had been involved in a price-fixing conspiracy. Vermont state’s and federal laws try to prevent companies that manufacture a common product from exploiting consumers by fixing high prices. Without such conspiracies, it would be difficult to have a single price for the product. Thus, consumers would opt to purchase the lowest priced product and ignore others.

Most antitrust lawsuits are filed by the Attorney General on behalf of the state and the consumers. They might involve a company but sometimes the lawsuits could be filed against individuals who have gone against the laws. Companies in some sectors of the economy have been fortunate to be exempt from the antitrust laws. However, some of these exemptions have been subjected to review, and have been considered for repeal. For example, insurance companies have been enjoying immunity for a long time and states are considering their exemption.

 

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Understanding Franchises

February 4th, 2012

One can start a business or sell a product that operates under another established company’s brand name to benefit from its many advantages. This is known as franchising. Your company will be the franchisee to the franchise that is the established business that you have adopted its name. Franchising is good for business but it can sometimes cause confusion and that is why proper understanding of the term if important. There are also legal issues involved that might lead to one losing a huge amount of money through fines or one being imprisoned for lack of understanding of how it works.

People get into franchises to gain from the fact that the name of the product will not require much marketing and advertising as the name is already established. A new product requires familiarization to the people who are going to buy it. This will involve branding in the print and electronic media and it needs plenty of money before people will even start looking at it. A franchise, on the other hand, provides a ready market for your goods with the usual advertising to maintain its relevance in the market. However, you may have to pay some fee or royalty to the franchise for using their product’s name.

The franchise will benefit a lot from this arrangement, as it will not have to bear all the advertising and marketing expenses. These expenses are shared among the franchise and the franchisee. In some cases, the franchisees are many, thus the expenses are spread out thinly among them. This causes each business entity to pay a very small amount compared to what they could have paid if they were to operate alone. Additionally, one will also require a more reduced starting capital due to the reduced need for marketing of the company. Besides, you will not need to conduct much research on about the product and its market as it is already in the market.

On the other hand, your small business will suffer some disadvantages of having to be in the shadow of the franchise. For example, you need to understand the legal requirements that will be binding your company to the franchise. Before you put pen to paper on any document, you should take your time to read the documents carefully. Some business people who have hurried through the signing process have found themselves losing their businesses through some clauses in the contracts, which they did not see before. It is recommended to have a lawyer present when making such an agreement.

Finally, a franchise might be in a poor financial position and might rely on your capital to regain some balance for his company. Also, a saturated market will offer little profit and so one should research about the product and decide if it is worth getting into a franchise for it. A wise move would also be to enquire from other franchisees on whether the franchise is good to work with or whether he is dishonest in his dealings. Find out about the business’ directors to establish whether any of them has questionable attributes.

 

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