Analysing the financial effectiveness of the nonprofits. Case study on health nonprofits

The effectiveness in nonprofit organizations has different meanings than in profit orientated companies. The study proposes to see how the financial effectiveness can be analyzed based on the data provided by their financial statements. Within the Income Statement, Romanian nonprofit organizations have to include the income and expenses realized as well as those estimated, so this is the source of information needed in our study. Our research is based on a sample of nonprofits, chosen from a database developed by CENTRAS (Assistance center for NGO). The financial effectiveness is calculated, using the ratios method, by reporting the realized elements to the targeted ones. The period of our analysis involves three fiscal years for the chosen sample. The results of this study involve measures of financial effectiveness for each entity studied, the effectiveness evolution over the studied period, identifying factors which influence both effectiveness and its evolution, and interpreting the results for the whole field. (C) 2015 The Authors. Published by Elsevier B.V.