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Non Profit Organizations And The Need For Be Financially Sound

Decent Essays

Kevin Hogue
PAD 4144
Short Essay Assignment
Based on Question 3

Non-profits Organizations and the Need to be Financially Sound
The African Entrepreneur Collective is a 501(c)(3) company that has a commendable and admirable social mission. Essentially their goal is to create jobs in Rwanda, Africa. They believe that the best method to accomplish this is to help the entrepreneurs who are already creating jobs, create more of them. They primarily receive their funding from government grants and private foundations, but they also accept personal donations. Their reliance on these grants and foundations makes the people in charge of retaining and finding new sponsorships extremely vital to the company, and therefore they wield substantially …show more content…

While this has surely benefitted the people who got the jobs, it equates to only 175 jobs per year and is a very small number overall. One factor that this organization does not take into account, that further dilutes its effectiveness, is the number of jobs that these entrepreneurs would have created regardless of the company’s involvement. The only true benefit provided would be the additional jobs that would be gained from using the company’s service, not the total jobs these entrepreneurs added.
I cannot find any financial reports from 2012, and since the African Entrepreneur Collective received their 501(c)(3) status in 2013, Guidestar.org does not have this information either. However from 2013-2016 total income was $1,464,414 ($1,875,943 total income minus the $411,529 in retained earnings that can be utilized in the future). This means that the company needs to raise/earn $2,092.02 per job created, hardly an impressive figure. That number is assuming all 700 of these jobs would not have been created without the company’s help, and that is a highly doubtful conclusion at best.
The African Entrepreneur Collective primarily relies on grants, foundations, and private donors to survive ($813,764 or 83.4% of their total income in 2016). The largest grants come from the United States Agency of International Development (USAID) and other international development agencies such as Global Giving UK and the

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