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ACCA Applied Skills · Financial Management · Financial and other objectives in not-for-profit organisations

Which of the following is a typical difficulty in setting and measuring objectives for a not-for-profit organisation?

The typical difficulty is that outputs are often intangible and hard to measure, and the organisation must balance the conflicting aims of many stakeholders such as donors, beneficiaries and government. Profit is not an adequate measure, and funders frequently influence objectives.

  1. AOutputs are often intangible and hard to quantify, and there are many stakeholders with conflicting aimsCorrect
  2. BObjectives are always limited to a single financial target
  3. CPerformance can be fully measured by profit after tax
  4. DFunders usually have no influence over the organisation's objectives

Explanation

Not-for-profit organisations produce outputs such as wellbeing or education that are hard to quantify, and must satisfy multiple stakeholders such as donors, government, beneficiaries and staff. Profit is not a suitable sole measure. Funders often strongly influence objectives, so the other options are false.

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