FACTORS AFFECTING THE EFFICIENCY OF FINANCIAL RESOURCE USE IN NON PROFIT ORGANIZATIONS

Abstract

The efficiency of financial resource use in non-profit organizations cannot be evaluated only  by the amount of funds spent or by the absence of budget deviations. A financially efficient  organization must convert attracted resources into mission-related activities while controlling the  additional costs of fundraising, administration, reporting and monitoring. Therefore, the assessment  of efficiency should distinguish between the nominal amount of financing and the amount that  remains available for substantive activity after necessary transaction and support costs are taken into  account. This distinction makes it possible to evaluate not only how much funding was attracted, but  also how effectively it can actually be used for the organization’s core purposes.