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Charities: |
Businesses |
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1. |
Purpose: |
serve a public good, such as promoting education, research, or alleviating poverty. |
Exist to generate profit for their owners, shareholders, or other stakeholders |
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2. |
Impact Measurement: |
Often measure their success by the number of people impacted and the effectiveness of their programs in achieving their mission. |
Measure their success by financial metrics such as revenue, profit, and market share. |
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3. |
Funding: |
Charities: Rely on donations, grants, sponsorships, and fundraising activities. |
Businesses: Primarily earn revenue through the sale of goods or services. |
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4. |
Taxes: |
Charities: Often exempt from paying income taxes, as their revenue is used for charitable purposes. |
Businesses: Must pay income taxes on their profits. |
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5. |
Accounting: |
Account for donations, grants, and fundraising activities, often with specific requirements related to how funds are used. |
Account for sales, costs of goods, and other business expenses in accordance with standard accounting principles. |
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6. |
Organizational Culture: |
Often have a community-oriented culture, focused on addressing social problems and benefiting the public. |
May have a more profit-focused culture, emphasizing financial performance and metrics. |
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7. |
Governance: |
Typically have a board of directors that is accountable to the public and ensures the organization is fulfilling its charitable mission. |
May have a board of directors that is accountable to shareholders and focuses on maximizing profits. |
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