Answer to Question #54113 in Accounting for marlisa

Question

In what circumstances do NFP’s compete for funding and what can influence the outcome of funding applications?

Answer 1

The amount and manner of competition among not-for-profits have been changing, and the stakes are getting higher.
Financial, political, and bureaucratic factors have coalesced into a morass that is threatening large and small organizations alike. In short, many nonprofits are finding themselves in a position where they are expected to do more and more, with less and less. Many organizations have cut back their services. Some have ceased to exist.
Solid numbers regarding the dissolution of nonprofits are difficult to come by. The primary source of financial data in the nonprofit sector in the United States has been Form 990. However, if an organization stops filing a Form 990, one cannot assume that it was because it ceased to exist due to the aforementioned pressures. Indeed, some not-for-profits voluntarily close their doors because they have successfully achieved their missions and the need for their services no longer exists. Also, one agency might have merged under the banner of another and disappeared in name only. Furthermore, organizations might dip beneath the dollar threshold at which a Form 990 is required. These continue to function, but are beneath the radar of the federal government.