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Nonprofit Capital Structure+definitions
501(c) is a provision of the United States Internal Revenue Code (26 U.S.C. § 501(c)), listing twenty-eight types of non-profit organizations exempt from some Federal income taxes. Sections 503 through 505 list the requirements for attaining such exemptions. Many states reference Section 501(c) for definitions of organizations exempt from state taxation as well. - Wikipedia at: http://en.wikipedia.org/wiki/501%28c%29
In finance, capital structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities. A firm's capital structure is then the composition or 'structure' of its liabilities. For example, a firm that sells $20 billion in equity and $80 billion in debt is said to be 20% equity-financed and 80% debt-financed. The firm's ratio of debt to total financing, 80% in this example, is referred to as the firm's leverage. In reality, capital structure may be highly complex and include tens of sources. Gearing Ratio is the proportion of the capital employed of the firm which come from outside of the business finance, e.g. by taking a short term loan etc.
http://en.wikipedia.org/wiki/Capital_structure
Nonprofit Capital Structure+where to start
Nonprofit Capital Structure+best practices
Hidden in Plain Sight- Understanding Nonprofit Capital Structure
The Nonprofit Quarterly
Clara Miller
"Capital Structure can be simple, with small amounts of cash supplemented by 'sweat equity' and enthrusiasm or highly complex, with multiple reserves, investements and assets."
http://www.nonprofitquarterly.org/content/view/104/28/
Getting Beyond Breakeven: A Review of Capitalization Needs and Challenges of Philadelphia-Area Arts and Culture Organizations
This report is an excellent resource and exercise for understanding organizational strategic financial planning, especially for arts organizations, but the lessons are transferable to other types of nonprofit organizations. Includes five instructional case studies, where profit/loss statements and balance sheets are examined and assessed.
The report can be downloaded from the websites of William Penn Foundation (www.williampennfoundation.org) and The Pew Charitable Trusts (www.pewtrusts.org), or at www.tdcorp.org/capitalization.
Financing nonprofits: putting theory into practice By Dennis R. Young
Lanham, MD : National Center on Nonprofit Enterprise and AltaMira Press, ©2007.
find at a library: http://www.worldcat.org/oclc/69104249
Tax-exempt bonds and the capital structure of nonprofit organizations.
Wedig GJ, Hassan M, Morrisey M. AHSR FHSR Annu Meet Abstr Book. 1995; 12: 20-1.
Health Care Systems Department, Wharton School, University of Pennsylvania, Philadelphia 19104, USA.
http://gateway.nlm.nih.gov/MeetingAbstracts/ma?f=102216012.html
Nonprofit Capital Structure+lessons learned
search scholarly articles regarding Nonprofit capital structure: http://tinyurl.com/y8wb363
Nonprofit Capital Structure+standards in field
Formation and structure
In the United States of America, nonprofit organizations are formed by incorporating in the state in which they expect to do business. The act of incorporating creates a legal entity enabling the organization to be treated as a corporation under law and to enter into business dealings, form contracts, and own property as any other individual or for-profit corporation may do.
Nonprofits can have members but many do not. The nonprofit may also be a trust or association of members. The organization may be controlled by its members who elect the Board of Directors, Board of Governors or Board of Trustees. Nonprofits may have a delegate structure to allow for the representation of groups or corporations as members. Alternately, it may be a non-membership organization and the board of directors may elect its own successors.
A primary difference between a nonprofit and a for-profit corporation is that a nonprofit does not issue stock or pay dividends, (for example, The Code of the Commonwealth of Virginia includes the Non-Stock Corporation Act that is used to incorporate nonprofit entities) and may not enrich its directors. However, like for-profit corporations, nonprofits may still have employees and can compensate their directors within reasonable bounds.
The two major types of nonprofit organization structure are membership and board-only. A membership organization elects the board and has regular meetings and power to amend the bylaws. A board-only organization typically has a self-selected board, and a membership whose powers are limited to those delegated to it by the board. A board-only organization's bylaws may even state the organization has no membership, although the organization's literature may refer to its donors as "members"; examples of such structures are Fairvote[4][5] and the National Organization for the Reform of Marijuana Laws.[6] The Model Nonprofit Corporation Act imposes many complexities and requirements on membership decision-making. Accordingly, many organizations, such as the American Society of Association Executives[7] and Wikimedia,[8] have formed board-only structures. The National Association of Parliamentarians has raised concerns about the implications of this trend for the future of openness, accountability, and understanding of grassroots concerns in nonprofit organizations. Specifically, they note that nonprofit organizations, unlike business corporations, are not subject to market discipline for products and shareholder discipline over their capital; therefore, without membership control of major decisions such as election of the board, there are few inherent safeguards against abuse.[9] [10] A rebuttal to this might be that as nonprofit organizations grow and seek larger donations, the level of scrutiny rises, including expectations of audited financial statements.[11]
http://en.wikipedia.org/wiki/Non-profit_organization#Formation_and_structure
