Issues Involved with Calculating the Cost of Capital in the Not-for-Profit and Public Sectors

doi:10.33423/jabe.v21i5.2271

Assuring Not-For-Profit Hospital Competitiveness Through Proper Accounting For The True Cost Of Capital

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v8i11.42 ◽

2010 ◽

Vol 8 (11) ◽

Author(s):

Rakesh Duggal ◽

Michael Craig Budden

Keyword(s):

Cost Of Capital ◽

Profit Maximization ◽

Font Size ◽

Non Profit ◽

True Cost ◽

Wealth Maximization ◽

For Profit ◽

Not For Profit ◽

The Cost

The topic of cost of capital is very important, especially for not-for-profit (NFP) organizations.  Since profit maximization or stockholder wealth maximization cannot be their objective, NFP firms must be all the more aware of their costs, including the cost of capital, to sustain and grow the quality and quantity of their services to their consumers.  Yet, research into this topic has been lagging.  This paper adapts and enhances an existing methodology and illustrates how a non-profit hospital’s cost of capital can be estimated.

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Social housing provision for minority ethnic older people with dementia: Findings from a qualitative study

Dementia ◽

10.1177/1471301215616539 ◽

2015 ◽

Vol 16 (6) ◽

pp. 750-765 ◽

Cited By ~ 2

Author(s):

Valerie Lipman ◽

Gillian Manthorpe

Keyword(s):

Housing Provision ◽

Housing Associations ◽

Fully Integrated ◽

For Profit ◽

The United Kingdom ◽

Not For Profit ◽

People With Dementia ◽

Housing Services ◽

Audit Approach ◽

The Cost

Little research has explored how not-for-profit housing providers, often termed Housing Associations in the United Kingdom, meet the needs of older tenants with dementia who are from black and ethnic minority communities. This article presents findings from an exploratory study conducted in 2015. The study took an audit approach, investigating current practice and policy in 12 Housing Associations. All were developing their understanding of dementia; some were augmenting their standard rented property portfolio to include housing with care provision; and most had policies relating to equalities and diversity and were offering dementia training to members of staff. None appeared to have fully integrated the three strands of housing services, dementia care, and cultural or ethnicity-related needs and preferences. A range of strategies was reported as being developed to meet tenants’ changing circumstances. Anxiety about the cost of adaptations was commonly reported, although the nature and extent of this were ill-defined. Discussion focuses on the findings’ implications for housing providers and for dementia professionals.

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The cost profiles of alternative approaches to journal publishing

First Monday ◽

10.5210/fm.v12i12.2048 ◽

1969 ◽

Cited By ~ 8

Author(s):

Roger Clarke

Keyword(s):

Open Access ◽

Journal Publishing ◽

For Profit ◽

Digital Era ◽

Not For Profit ◽

Alternative Approaches ◽

The Cost

The digital era is having substantial impacts on journal publishing. In order to assist in analysing these impacts, a model is developed of the costs incurred in operating a refereed journal. Published information and estimates are used to apply the model to a computation of the total costs and per-article costs of various forms of journal-publishing. Particular attention is paid to the differences between print and electronic forms of journals, to the various forms of open access, and to the differences between not-for-profit and for-profit publishing undertakings. Insight is provided into why for-profit publishing is considerably more expensive than equivalent activities undertaken by unincorporated mutuals and not-for-profit associations. Conclusions are drawn concerning the current debates among conventional approaches and the various open alternatives.

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Cost Stickiness in the New Zealand Charity Sector

The International Journal of Accounting ◽

10.1142/s1094406019500124 ◽

2019 ◽

Vol 54 (03) ◽

pp. 1950012

Author(s):

Ahsan Habib ◽

Hedy Jiaying Huang

Keyword(s):

New Zealand ◽

Social Impact ◽

For Profit ◽

Managerial Decisions ◽

Not For Profit ◽

The Social ◽

Wide Range ◽

External Stakeholders ◽

The Cost ◽

Cost Stickiness

We investigate whether New Zealand charities exhibit cost stickiness, conceptualized as cost increases in response to an increase in income that are greater than the cost decreases associated with an equivalent decrease in income. Drawing on the holistic accountability rationale, we posit that charity managers consider themselves accountable to a wide range of stakeholders and, therefore, are more concerned about the social impact of their managerial decisions. As a result, charity managers will be reluctant to adjust resources downward immediately after an income drop, as such decisions could lead to the loss of trust and confidence of their internal and external stakeholders. Based on a large sample of charities in New Zealand, we find evidence of cost stickiness. Importantly, we find that cost stickiness varies across a number of characteristics of charities, including charity size, sources of income and expenditure, crisis periods, and the sectors within which the charities operate. Our study contributes to a hitherto unexplored setting and provides empirical evidence on the theoretical debate of hierarchical versus holistic accountability in the not-for-profit sector.

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How to Determine the Cost of Capital for a Commercial Forestry

Forest Products Journal ◽

10.13073/fpj-d-21-00060 ◽

2022 ◽

Vol 72 (1) ◽

pp. 21-28

Author(s):

Karlo Beljan ◽

Denis Dolinar ◽

Donald Hodges

Keyword(s):

Risk Premium ◽

Cost Of Capital ◽

Stock Exchange ◽

For Profit ◽

Average Return ◽

Risk Characteristics ◽

Us Government ◽

The Difference ◽

Risk Free Rate ◽

The Cost

Abstract This paper focuses on designing a methodological workflow to fill a knowledge gap for determining the cost of capital for commercial forestry projects. Upon reviewing the literature, a method to determine the cost of capital for profit-oriented forestry seems to be lacking. Accordingly, we selected and analyzed 42 companies that do businesses worldwide, are present on the stock exchange, and possess or lease forest land. Based on their business activities (growing forest, sawmilling, final production, paper production), these companies are classified into four subgroups. An algorithm has been devised using the concept of risk diversification and the capital asset pricing model for three groups of investors and four forestry subgroups. In doing so, the real risk-free rate (0.43%) is set as the difference between an average return on 10-year US government bonds (2.59% nominal) and the 10-year average US inflation rate (2.16%). The measure of forestry systematic risk (beta coefficient) varies between 0.83 and 1.41, while the equity (stock exchange market) risk premium is set to 6%. Unsystematic risk is determined using a process of mapping which takes into account all risk elements marked as relevant for the forestry sector. This approach provides results that reveal the cost of capital varying between 5.41% and 16.55% based on the current level of an investor's portfolio diversification and the risk characteristics of the forestry subgroup. Finally, the forestry companies meeting the investor's expectations are noted as preferable investment opportunities.

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Foreword to the Themed Issue “Cyanobacteria”

Advances in Oceanography and Limnology ◽

10.4081/aiol.2017.6674 ◽

2017 ◽

Vol 8 (1) ◽

Author(s):

Triantafyllos Kaloudis ◽

Jussi Meriluoto ◽

Ludek Blaha

Keyword(s):

Science And Technology ◽

Research Area ◽

For Profit ◽

Administrative Functions ◽

Research And Innovation ◽

Not For Profit ◽

New Concepts ◽

Interdisciplinary Approaches ◽

Technological Developments ◽

The Cost

COST (European Cooperation in Science and Technology) is a pan-European intergovernmental framework. Its mission is to enable break-through scientific and technological developments leading to new concepts and products and thereby contribute to strengthening Europe’s research and innovation capacities. It allows researchers, engineers and scholars to jointly develop their own ideas and take new initiatives across all fields of science and technology, while promoting multi- and interdisciplinary approaches. COST aims at fostering a better integration of less research-intensive countries to the knowledge hubs of the European Research Area. The COST Association, an International Not-for-profit Association under Belgian Law, integrates all management, governing and administrative functions necessary for the operation of the framework. The COST Association has currently 36 Member Countries. <a href="http://www.cost.eu">www.cost.eu</a>

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Philanthropy Accountability

Business and Entrepreneurial Review ◽

10.25105/ber.v6i2.1040 ◽

2016 ◽

Vol 6 (2) ◽

pp. 114

Author(s):

Edy Sukarno

Keyword(s):

Current Situation ◽

Causal Factor ◽

Precise Information ◽

The Public ◽

For Profit ◽

Not For Profit ◽

Other Information ◽

Public Sectors ◽

Not For Profit Organizations ◽

For Profit Organizations

A causal factor of susceptibility of philanthropy in Indonesia which is now facing turbulence era is a weak implemented accountability. Philanthropy is changing to self adjustment with the aspiration and demand of the public sectors. The changing management is needed by considering the current situation and condition, participation, and shall be supported by all of the stakeholders especially employees of not-for-profit organizations, in order to achieve the expected goal. The principle of accountability requires philanthropy governance to make sure that disclosures of accurate and precise information shall be done in relation to the material consisting of financial terms and conditions, performance and leadership of the organization. The accountabilitiy is very important to prevent fraud in financial infomation and other information forwarded to not-for-profit organizations. This article is expected to provide particularly and important knowledge about the terms, functions and relationships between philanthropy accountability and information disclosures.

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Sasta Bhojan Sewa: the pricing dilemma

Emerald Emerging Markets Case Studies ◽

10.1108/eemcs-06-2020-0235 ◽

2021 ◽

Vol 11 (1) ◽

pp. 1-17

Author(s):

Harsimar Kaur ◽

Gopalakrishnan Narayanamurthy

Keyword(s):

Decision Making ◽

Social Enterprises ◽

Poor People ◽

Selling Price ◽

Opportunity Identification ◽

Content Type ◽

For Profit ◽

Not For Profit ◽

Social Venture ◽

The Cost

Learning outcomes After studying this case, students should be able to: understand the process of opportunity identification for forming social enterprises (knowledge), discuss various concepts related to social entrepreneurship and not-for-profit firms (comprehension), apply tools to differentiate between social and commercial enterprises (application), analyze the role of environmental factors like culture in influencing business (analysis) and develop decision-making skills by critically evaluating the options (evaluation). Case overview/synopsis Sasta Bhojan Sewa (SBS) was one of the key projects of Parupkar Sewa Society. The social venture initiated by Jaswinder Singh, a young resident of Ambala (a small town in Haryana, India), got registered as a not-for-profit society in the year 2018. Mr. Singh initiated various social welfare projects since the year 2006 when he got inspired from the history of Sikh Gurus. As years passed, he was able to employ more and more people. This led to the development of a social venture, which had 33 employees at the end of the year 2019. The society was running seven major projects with the help of dasvandh (donations). Project SBS was about providing home-like hygienic meals to people at merely INR10. There were 11 canteens in Ambala city and cantonment, which were being run under that project. Around 1,500 people were eating daily in those canteens, out of which around 70–80 people were not able to pay even INR10. The project had employed 30 people. The salaries of the staff and other operating expenses like liquid petroleum gas (LPG) expense, transportation cost and electricity were met through dasvandh (donations) from the local households. When the project was initiated, the cost of preparing a meal was INR10, but by the end of 2019, the cost went up to INR12 per meal due to food inflation. The meal was still being sold at INR10 at a loss of INR2 per meal. On December 28, 2019, as founder of the society, Mr. Singh was thinking of raising the selling price to INR12 per meal, which had to be implemented on January 01, 2020 but he was doubtful in doing so. He thought increasing the price might defeat the purpose of starting SBS as he was reflecting on how poor people were and how each rupee mattered to them. He was also considering that it might affect the goodwill of the society that was known for selling food at an extremely low price. By using the example of SBS, we explain various concepts of not-for-profit social enterprises like opportunity identification, key drivers, business model canvas and environmental effects in this teaching note. The teaching note also provides cost–benefit analysis of the available options to facilitate effective decision-making. Complexity academic level Undergraduate and graduate-level business programs. Supplementary materials Teaching notes are available for educators only. Subject code CSS 3: Entrepreneurship.

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