Clubs and Non Profit Organizations
Introduction
What’s the deal?
Clubs are very common establishments in our society. Firstly, before I further explain all the required information, we have to understand that a club operates differently as compared to a normal business/enterprise. The most imperative difference between a business and this sports club is that a business is established with the aim of generating profit which the owner is entitled to because the owner is the person who provides the start-up capital.
The low down A sports club on the other hand, it is established to provide facilities to the members and no profit is made. If, through fund raising efforts the club makes, the income generated exceeds the expenses incurred, then that money is called a SURPLUS. This money is then recorded in an account called the ACCUMULATED FUNDS. In a business, if the money made on sales or services rendered etc. exceeds the expenses, this money would be called a PROFIT and deposited into an account called BANK.
To better comprehend the above with regards to the operation of a sports club i.e. Western cape Soccer club, here is a simple diagram:
In this instance we are handling a sports club. The main purpose of this sports club is to enable its members (not customers as in a business) to take part in a sport that is soccer and also provides the facilities required to train for the sport.
You will also understand that in a club, the most recurrent source of income is the MEMBERSHIP FEES paid by members to the club and then followed by ENTRANCE FEES and so forth. In a business, the owner may decide to increase the price of a product by a certain percentage to make profit from it. For instance he buys an apple form a supplier for R1.00; he increases the price by 50% (R0.50). He then sells it for R1.50 and make R0.50c profit on that apple. All this is not done in clubs unless a club has a tuck shop. Money earned is put towards paying off all operating expenses such as electricity, water,
What’s the deal?
Clubs are very common establishments in our society. Firstly, before I further explain all the required information, we have to understand that a club operates differently as compared to a normal business/enterprise. The most imperative difference between a business and this sports club is that a business is established with the aim of generating profit which the owner is entitled to because the owner is the person who provides the start-up capital.
The low down A sports club on the other hand, it is established to provide facilities to the members and no profit is made. If, through fund raising efforts the club makes, the income generated exceeds the expenses incurred, then that money is called a SURPLUS. This money is then recorded in an account called the ACCUMULATED FUNDS. In a business, if the money made on sales or services rendered etc. exceeds the expenses, this money would be called a PROFIT and deposited into an account called BANK.
To better comprehend the above with regards to the operation of a sports club i.e. Western cape Soccer club, here is a simple diagram:
In this instance we are handling a sports club. The main purpose of this sports club is to enable its members (not customers as in a business) to take part in a sport that is soccer and also provides the facilities required to train for the sport.
You will also understand that in a club, the most recurrent source of income is the MEMBERSHIP FEES paid by members to the club and then followed by ENTRANCE FEES and so forth. In a business, the owner may decide to increase the price of a product by a certain percentage to make profit from it. For instance he buys an apple form a supplier for R1.00; he increases the price by 50% (R0.50). He then sells it for R1.50 and make R0.50c profit on that apple. All this is not done in clubs unless a club has a tuck shop. Money earned is put towards paying off all operating expenses such as electricity, water,