This document compares and contrasts the public, private not-for-profit, and commercial sectors of financial management in areas like ownership, legal authority, funding sources, success indicators, opportunities, and challenges. The public sector is usually government-owned and funded through taxes, the private not-for-profit sector serves specific social interests and is funded through donations, and the commercial sector aims to realize profit for investors. Competition between the sectors can increase choice for consumers while cooperation provides benefits like operational efficiency and a more coordinated service delivery approach.
NCV 3 Business Practice Hands-On Support Slide Show - Module 3
Fin Multiple Sectors
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3. Comparison of the Sectors Area of Contrast Public Private Not-for-Profit Commercial Ownership Usually government Private organization Private corporation Legal Authority Enabling legislation Enabling legislation & designation of tax status Incorporation (state & federal government recognition, regulations & protection Mandate Serve social welfare and needs of citizens Serve specific social welfare needs or leisure interests of specific population Realize maximum return on investment - Profit
4. Comparison of the Sectors Area of Contrast Public Private Not-for-Profit Commercial Source of Funds Taxes, grants, donations, earned income Grants, membership, donations, fund-raising, earned income Investors, creditors, earned income Market Management Market limited to geographic/political area. Segmented based on need. Market defined by particular need Market composed of those who can pay Defined by merit Success Indicators Social change Social change, financial viability Profitability, growth, return on investment
5. Comparison of the Sectors Area of Contrast Public Private Not-for-Profit Commercial Opportunities Tax exemption, volunteers, bulk purchasing and discounts Tax exemption, volunteers, public concern Entrepreneurship, support for eliminating financially unsuccessful products Challenges Public accountability and scrutiny Changing political directions Relative uncertainty, reliance on gratuitous income and volunteers, limited qualified staff and leadership Developing and maintaining skills