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Goodwill of San Francisco, San Mateo and Marin Counties 2009 
Mary E. Vradelis, Consultant Berkeley, California www.sfgoodwill.org In February 2009, the CEO and president of Goodwill of San Francisco, San Mateo and Marin Counties (Goodwill), Deborah Alvarez-Rodriguez, prepares for the launch of a challenging fund-raising campaign that will determine how the organization weathers the next few years. Only a few months into the new fiscal year (which started in July 2008), Alvarez-Rodriguez realized that the organization was facing a projected deficit of $3 million that threatened its ability to provide many services that are the core of its mission. The nonprofit organization, with a budget of over $32 million, was deeply affected by the national economic downturn. Goodwill operates independently as a member of Goodwill Industries International Inc. Goodwill International has 184 autonomous chapters in the United States, Canada, and 14 other countries. 

a) Analyze the situation facing Good Will.
b) Outline the potential solutions, giving the pros and cons for each alternative solution
c) From item b), chose a solution and outline how you would implement it.

Situation facing by Goodwill

There are two types of organisations i.e.for-profit organisation and not for profit organisation. not for profit organisations are usually known as non-profit organisations or NPO. Non-profit organisations are established in order to provide social services by introducing several programs for the citizen of a country. Economic definition of non-profit organisation is different. Non-profit organisations use their surplus of revenue in developing their programs and services while for-profit organisations distribute their surplus of revenue among the leaders and the shareholders (Denzin and Giardina, 2018). Budget is financial documents or may be termed as report which provides an overview of the way the organisation is planning to execute their plans by spending the revenue it brings. Expenses and revenue are the two key components of the budget. Budget surplus for a non-profit organisation means the company has managed to bring more money than It has spent for the services it provides and budget deficit for a non-profit organisation means the organisation could not meet the budget goals which is outlined by the finance committee of the organisation, spending and fundraising etc (Carlson, 2016). In February 2009 the organisation named Goodwill San Francisco has faced a serious economic problem and there was 3-million-dollar budget deficit which has threatened the ability of the organisation to provide services to the citizen. In this article potential solutions to raise funds and to prevent budget deficit will be provided with the strategies to implement the most secured solution.

Goodwill International was established in the year 1902 by Dr Edgar Helms. The organisation used to distribute household goods and clothing to the poor people. Dr Edgar Helms employed some unemployed people in order to repair the goods that would be distributed to the poor people and this is how the organisation started its business with this philosophy of “hands up, not hand out” (Hazy, 2015). Goodwill of San Francisco accompanied by Reverend Samuel Quickmire started helping those citizens who were in need. In 2004 the organisation has appointed Deborah Alvarez Rodriguez. She came to the organisation with clean vision and mission in order to make the organisation a bigger one. The board of goodwill San Francisco has appointed some staffs and interdisciplinary team in order to review its mission and vision (sfgoodwill.org). The organisation has developed a set of programs for the citizen who are in need. The mission of the organisation is to find solutions to reduce poverty through the business they operate. And the vision was to build a poverty free world where the people would be live in safe and growing communities and will have the opportunity to support their families and would be able to take active care for the environment (Epstein, 2018). In order to implement the New vision and mission in the business operation, Deborah Alvarez Rodriguez the management team the board of the organisation and the interdisciplinary team had started to change the way they used to operate the businesses by introducing job training and services through which the organisation would be able to earn revenue in future. The organisation has started its revenue generating programs with training and development services. In February 2009 the company has faced a serious economic problem and there was 3-million-dollar budget deficit which has threatened the ability of the organisation to provide services to the citizen. David Alvarez Rodriguez, San Mateo and Martin Counties, the CEO and the president of the organisation Goodwill San Francisco, has decided to introduce a fundraising campaign in order to determine how the organisation will be able to do its business for the next few years. The situation has caused due to a failed sale of its headquarters in July 2008 which has resulted in a severe damage to the cash flow of the organisation. The company has lost 6 million dollars in terms of investment capital and 1 million dollar in terms of operating capitals. The company used to earn its revenue from selling salvage products like metals woods etc and drop in the prices of the commodity has plummeted the revenue of the organisation due to National economic downturn. During the economic crisis of 2008 several countries have experienced a significant drop in in portfolio values of their organisation and like other non-profit organisation Goodwill San Francisco has also experienced this situation which has threatened its yearly income (Bartlett and Beamish, 2018). Demand for the services that the organisation offers to the needy citizens has also increased during this time. Deborah Alvarez Rodriguez and the board of the organisation has decided not to eliminate any of the services the organisation offers while trying to counter the economic crisis as over the time the organisation has managed to provide job training and development services to homeless and severely disabled people. Within the period October 2008 to 2009 the organisation has managed to reduce the budget deficit from 3 million dollar to 1 million dollar without eliminating any service. The whole organisation and its staff showed their passion for the mission of the goodwill and in order to provide High Quality Services and to meet the demand that has occurred due to the significant rise in the rate of unemployment in 60 years, the organisation has decided to organise a fundraising campaign for the first time in 93-year history (Steger, 2017). Deborah Alvarez Rodriguez had two options to reduce the budget deficit or the gap; one is by approaching the donors in order to raise 1 million dollar to fill the gap and the second is by eliminating some services that the organisation offers. But the organisation had worked really hard in order to get rid of this economic crisis without affecting the services they provide to the needy people across the country.

Outline the potential solutions, giving the pros and cons for each alternative solution

Goodwill of San Francisco was facing a budget deficit of 3 million dollar due to economic downturn in 2008. Goodwill of San Francisco, the non-profit organisation, had failed to achieve the earning goals for the year or the organisation might have overspent in one or more services. Due to the projected deficit, the company didn't have enough money to spend for the next year which has threatened the ability of the organisation to provide the services to the people (O'connor, 2017). During the economic crisis of 2008 several countries have experienced a significant drop in in portfolio values of their organisation and like other non-profit organisation Goodwill San Francisco has also experienced this situation which has threatened its yearly income. Demand for the services that the organisation offers to the needy citizens has also increased during this time. Deborah Alvarez Rodriguez and the board of the organisation has decided not to eliminate any of the services the organisation offers while trying to counter the economic crisis as over the time the organisation has managed to provide job training and development services to homeless and severely disabled people (Abratt and Bendixen, 2018). Between October 2008 to 2009 the organisation has managed to reduce the budget deficit from 3 million dollar to 1 million dollar without eliminating any service. Budget deficit is not a temporary problem and it requires permanent solutions. In order to deal with reduced income and budget deficit, the organisation should adjust its expenditures. Sometimes organisations find the hardest solution of cutting the staffs in order to prevent budget deficit. Maybe cutting staffs is the quickest way to solve the problem of budget deficit.

Tracking down the spending and the earnings of the organisation may prevent budget deficit. If overall economic atmosphere is causing the budget deficit, tracking down the budget every month will help the organisation by giving an opportunity to adjust the budget as needed. It will also help the organisation to control spending cost or alert the organisation to overspending. Tracking down the budget may help the organisation to review those services where the organisation is spending their money and allows them to cut some spending. The organisation will be able to identify the problem areas by tracking down the spending and the earnings (Liebman and Mahoney, 2017).

Reviewing business spending in order to cut some unnecessary spending will help the company to prevent the budget deficit. If the organisation is able to limit their spending, they will be able to avoid deficit (Macaulay, 2018). The organisation will be able to cut some money by reviewing every areas where they are spending for example employee parties. Reviewing business pending will also allow the organisation to transfer the spending from unnecessary services to more important services. There are other options to limit spending such as reducing payroll costs by decreasing employee hours (Rubin, 2016).

In order to address the projected deficit, the organisation needs to identify those areas from where it can raise revenue. Raising revenue is the most effective way to prevent budget deficit. The organisation should also outline strategic plan in order to increase sales (Bryson, 2018.). If the organisation is relying on donors, it should build a strong advertising campaign and make its board members to contact them in order to raise money to prevent deficit. Sometimes deficit can be covered up by getting a loan from the bank. But banks don't give loans to those organisations if they don't see any bright future of the organisation. Banks will only lend loans to those organisations when they figure out that the organisation will be able to cover the loans shortly (Fuller, 2016.).

Deborah Alvarez Rodriguez had two options to reduce the budget deficit or the gap; one is by approaching the donors in order to raise 1 million dollar to fill the gap and the second is by eliminating some services that the organisation offers. But the organisation main head work really hard in order to get rid of this economic crisis without affecting the services they provide to the needy people across the country.

It is important to manage the intricacies of the finances of non-profit organisations effectively and to do that, the finance committee, the board of directors and executive members need to manage and review the financial report very often (Hopkins, 2017). A proper financial management system should be built and the organisation should have the necessary tools in order to make strategic plans, employee policies, annual budget, annual cash flow etc. Without managing these financial documents and reports, the company will have to face a huge risk of reduced cash flow and the issues of overspending. The issues of projected budget deficit should always be taken very carefully. And the most important thing is to determine why it has occurred in the first place and whether it is a short time problem or it can continue in the future. While addressing budget deficit, it is important to come up with a solution that can raise funds to cover the deficit. When budget deficit is occurred to a non-profit organisation, it is important to lower the expenses of the organisation by eliminating a program it offers or by reducing staff or by transferring funds to more important services it provides (Gitman, Juchau and Flanagan, 2015). Budget surplus for a non-profit organisation means the company has managed to bring more money than It has spent for the services it provides and budget deficit for a non-organisation means the organisation could not meet the budget goals which is outlined by the finance committee of the organisation, spending and fundraising etc. When a non-profit organisation is facing a budget deficit, it should arrange money from restricted funds. The company we can arrange funds from the grants but there are some certain limitations as grants usually come for a certain purpose or there is a time limitation. The organisation can also arrange solicited donations these solicited donations are usually seen as temporarily restricted funds for a specific program that the organisation is going to offer to the customers (Kerzner and Kerzner, 2017). If the company manages to make a proper fundraising campaign, it will be able to get some unsolicited donations which can be referred to as a resource that are given to a non-profit organisation independently. Raising revenue is the most effective way to prevent budget deficit. The organisation should also outline strategic plan in order to increase sales. If the organisation is relying on donors, it should build a strong advertising campaign and make its board members to contact them in order to raise money to prevent deficit (Weerawardena, 2018).

Conclusion

In February 2009 the company has faced a serious economic problem and there was 3-million-dollar budget deficit which has threatened the ability of the organisation to provide services to the citizen. David Alvarez Rodriguez, San Mateo and Martin Counties, the CEO and the president of the organisation Goodwill San Francisco, has decided to introduce a fundraising campaign in order to determine how the organisation will be able to do its business for the next few years. The situation has caused due to a failed sale of its headquarters in July 2008 which has resulted in a severe damage to the cash flow of the organisation. The company has lost 6 million dollar in terms of investment capital and 1 million dollar in terms of operating capitals. In this article, potential solutions to raise funds and to prevent budget deficit has been provided with the strategies to implement the most secured solution.

References

Abratt, R. and Bendixen, M., 2018. Strategic Marketing: Concepts and Cases. Routledge.

Bartlett, C.A. and Beamish, P.W., 2018. Transnational Management: Text and Cases in Cross-border Management. Cambridge University Press.

Bryson, J.M., 2018. Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement. John Wiley & Sons.

Carlson, M.E., 2016. The Role of Trustees, Presidents, and Chief Financial Officers in Long-Term Capital Investments at Small Colleges (Doctoral dissertation, Endicott College).

Denzin, N.K. and Giardina, M.D., 2018. Introduction. In Qualitative Inquiry in the Public Sphere (pp. 9-22). Routledge.

Epstein, M.J., 2018. Making sustainability work: Best practices in managing and measuring corporate social, environmental and economic impacts. Routledge.

Fuller, G.W., 2016. Introduction. In The Great Debt Transformation (pp. 1-24). Palgrave Macmillan, New York.

Gitman, L.J., Juchau, R. and Flanagan, J., 2015. Principles of managerial finance. Pearson Higher Education AU.

Hazy, J.K., 2015. Growing a Large-Scale Social Enterprise: How Goodwill Industries (R) Succeeds as a Hybrid Organizati.

Hopkins, B.R., 2017. Starting and managing a nonprofit organization: A legal guide. John Wiley & Sons.

https://sfgoodwill.org/about/history/

Kerzner, H. and Kerzner, H.R., 2017. Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.

Liebman, J.B. and Mahoney, N., 2017. Do expiring budgets lead to wasteful year-end spending? Evidence from federal procurement. American Economic Review, 107(11), pp.3510-49.

Macaulay, S., 2018. Non-contractual relations in business: A preliminary study. In The Law and Society Canon (pp. 155-167). Routledge.

O'connor, J., 2017. The fiscal crisis of the state. Routledge.

Rubin, I.S., 2016. The politics of public budgeting: Getting and spending, borrowing and balancing. CQ Press.

Steger, M.B., 2017. Globalization: A very short introduction (Vol. 86). Oxford University Press.

Weerawardena, J., 2018. 8 Non-Profit Marketing Strategy. Transformational Leadership and Not for Profits and Social Enterprises.

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