For this project, you will choose a not-for-profit organization of your choice—it must be a 501(c)(3) organization—and develop a strategic analysis. You will report on key areas of the organization and evaluate each for its effectiveness in ensuring the long-term sustainability of the organization. Use the following question to guide your strategic analysis. 

I. Introduction 

II. Analysis 

III. Evaluation 

IV. Conclusion 

All elements must be addressed. Rubric for this assignment is posted as well as milestones one, two and three so assistance on the essay. 

1

OL 665 Final Project Guidelines and Rubric

Overview
Not-for-profit organizations represent a significant hiring pool for new graduates in the United States. Not-for-profit organizations are identified by the absence
of a monetary profit goal. Typically, the not-for-profit organization’s existence is based on a desire to provide a public benefit. Not-for-profit organizations exist
across industries and are present in education, healthcare, development, and environmental agencies. Examples of not-for-profit organizations include Doctors
without Borders, the American Red Cross, Teach for America, and the World Food Program.

Not-for-profit organizations require leaders who can manage them as businesses while understanding the needs of the communities they serve. For this project,
you will conduct a strategic analysis of a not-for-profit organization of your choice; in so doing, you will develop the critical skills necessary for leadership and
management careers within the not-for-profit business sector. To conduct your analysis, you will identify key financial considerations, explore unique public
relations considerations, and consider issues of sustainability within organizations with a not-for-profit designation. This project will increase your versatility as a
leader and improve your appeal as a potential employee within the not-for-profit business sector. The final product represents an authentic demonstration of
competency because it asks you to critically evaluate factors that contribute to the overall success of a not-for-profit organization.

The project is divided into three milestones, which will be submitted at various points throughout the course to scaffold learning and ensure the quality of your
final submission. These milestones will be submitted in Modules Three, Five, and Seven. The final product will be submitted in Module Nine. Remember that
you final submission will include a conclusion that summarizes the milestone work in a closing section.

In this assignment, you will demonstrate your mastery of the following course outcomes:

 Evaluate management strategies and organizational structures of not-for-profit organizations for their effectiveness in managing boards, volunteers, and
staff

 Analyze communication strategies used by not-for-profit organizations for how they advance shared values, attitudes, and goals with all stakeholders

 Analyze resource and budgetary considerations within not-for-profit organizations for determining potential challenges to financial operations

 Analyze ethical considerations within not-for-profit entities for their impact on public image

 Evaluate how operational strengths and weaknesses of not-for-profit organizations impact their long-term sustainability

2

Prompt
For this project, you will choose a not-for-profit organization of your choice—it must be a 501(c)(3) organization—and develop a strategic analysis. You will report
on key areas of the organization and evaluate each for its effectiveness in ensuring the long-term sustainability of the organization. Use the following question to
guide your strategic analysis: To what extent is your chosen not-for-profit organization operating to ensure its continued sustainability?

Specifically, the following critical elements must be addressed:

I. Introduction: Introduce your chosen organization, supplying background information relevant to communicating your strategic analysis. Consider
information such as when, where, and how the organization was founded.

II. Analysis
a) Leadership:

i. Discuss the specific board structure present in your chosen organization, explaining the benefits of this structure.
ii. Discuss the current management strategies for recruiting, utilizing, and retaining human capital, including to what extent a succession

plan is in place.
iii. Evaluate the current leadership strategies and organizational structure for strengths and weaknesses in managing boards, volunteers,

and staff.
b) Communications:

i. Discuss the current communication strategies being used throughout the organization, internally and externally, for promoting the
organization’s shared values.

ii. Discuss the organization’s public relations strategies and specific branding techniques.
iii. Evaluate the current communication strategies for opportunities for advancing the goals of the organization both internally and

externally.
c) Finances:

i. Discuss the organization’s current budgetary resources, structure, and responsibilities.
ii. Discuss the organization’s current fundraising campaigns, grant possibilities, and planned giving opportunities and their impact on the

overall budget.
iii. Determine potential challenges to the financial operation of the organization based on your analysis of its overall financial management.

d) Ethics:
i. Discuss the organization’s handling of budget and fundraising transparency, specifically in regards to its adherence to established codes,

principles, and ethics of the industry.
ii. Discuss ethical considerations the organization faces related to conflict of interest, privacy, and compensation.

iii. Evaluate how the ethical operation of this organization has impacted its public image.

3

III. Evaluation
a) Summarize the most significant strengths and weaknesses of the not-for-profit organization.
b) Evaluate the organization’s long-term sustainability under the current operational strategies. Consider how the major strengths and weaknesses

of this organization factor into its sustainability.

IV. Conclusion: Summarize your position on the organization’s long-term sustainability, including suggestions for the organization to support future
sustainability. Support each suggestion with your rationale.

Milestones
Milestone One: Organizational Profile
In Module Three, you will develop a detailed profile of the not-for-profit organization on which you will perform your strategic analysis. This milestone will be
graded with the Milestone One Rubric.

Milestone Two: Leadership and Communication
In Module Five, you will analyze the leadership strategies and communication practices of the not-for-profit organization on which you will perform your strategic
analysis. This milestone will be graded with the Milestone Two Rubric.

Milestone Three: Financial Management and Ethics
In Module Seven, you will analyze the financial management and ethical practices of the not-for-profit organization on which you will perform your strategic
analysis. This milestone will be graded with the Milestone Three Rubric.

Final Submission: Strategic Analysis of a Not-for-Profit Organization
In Module Nine, you will submit your final project. It should be a complete, polished artifact containing all of the critical elements of the final product. It should
reflect the incorporation of feedback gained throughout the course. Conclude your plan by applying the knowledge you have gained over the course of the
project. This submission will be graded with the Final Project Rubric.

4

Deliverables
Milestone Deliverable Module Due Grading

One Organizational Profile Three Graded separately; Milestone One Rubric

Two Leadership and Communication Five Graded separately; Milestone Two Rubric

Three Financial Management and Ethics Seven Graded separately; Milestone Three Rubric

Final Submission: Strategic Analysis of a
Not-for-Profit Organization

Nine Graded separately; Final Project Rubric

Final Project Rubric
Guidelines for Submission: Your strategic analysis should be 10–12 pages (not including the title page or references), double spaced with 12-point Times New
Roman font, one-inch margins, and APA formatting.

Critical Elements Exemplary (100%) Proficient (90%) Needs Improvement (70%) Not Evident (0%) Value
Introduction

Meets “Proficient” criteria, and
introduction demonstrates a
sophisticated awareness of the
details that contribute to
communicating the strategic
analysis

Introduces chosen
organization, supplying all
necessary background
information for communicating
the strategic analysis

Introduces chosen organization,
supplying all necessary
background information for
communicating the strategic
analysis, but introduction is
cursory

Does not introduce chosen
organization

5

Leadership: Board
Structure

[OL-665-01]

Meets “Proficient” criteria, and
discussion demonstrates a
sophisticated awareness of the
nuances of board types within
not-for-profit organizations

Discusses the specific board
structure present in chosen
organization, explaining the
benefits of this structure

Discusses the specific board
structure present in chosen
organization, but discussion is
cursory, contains inaccuracies, or
does not explain benefits

Does not discuss the specific
board structure present in
chosen organization

6

Leadership:
Management Strategies

[OL-665-01]

Meets “Proficient” criteria, and
discussion demonstrates a
complex grasp of personnel
management strategies

Discusses the current
management strategies for
recruiting, utilizing, and
retaining human capital,
including to what extent a
succession plan is in place

Discusses the current
management strategies for
recruiting, utilizing, and retaining
human capital, including to what
extent a succession plan is in
place, but discussion is cursory or
contains inaccuracies

Does not discuss the current
management strategies for
recruiting, utilizing, and
retaining human capital

6

5

Leadership: Leadership
Strategies

[OL-665-01]

Meets “Proficient” criteria, and
evaluation demonstrates
nuanced understanding of how
leadership strategies and
organizational structure
influence managing boards,
volunteers, and staff

Evaluates the current
leadership strategies and
organizational structure for
strengths and weaknesses in
managing boards, volunteers,
and staff

Evaluates the current leadership
strategies and organizational
structure but evaluation is cursory
or contains inaccuracies

Does not evaluate the current
leadership strategies and
organizational structure

6

Communications:
Communication

Strategies

[OL-665-02]

Meets “Proficient” criteria, and
discussion demonstrates a
sophisticated grasp of
communication strategies used
to promote shared values

Discusses the current
communication strategies
being used throughout the
organization, internally and
externally, for promoting the
organization’s shared values

Discusses the current
communication strategies being
used throughout the organization,
internally and externally, for
promoting the organization’s
shared values, but discussion is
cursory or contains inaccuracies

Does not discuss the current
communication strategies
being used throughout the
organization

6

Communications: Public
Relations

[OL-665-02]

Meets “Proficient” criteria, and
description demonstrates
nuanced understanding of the
organization’s public relations
strategies and branding
techniques

Discusses the organization’s
public relations strategies and
specific branding techniques

Discusses the organization’s public
relations strategies and specific
branding techniques, but
discussion is cursory or contains
inaccuracies

Does not discuss the
organization’s public relations
strategies and specific
branding techniques

6

Communications:
Advancing the Goals

[OL-665-02]

Meets “Proficient” criteria, and
evaluation demonstrates
nuanced understanding of how
communication strategies can
support advancing the goals of
the organization

Evaluates the current
communication strategies for
opportunities for advancing the
goals of the organization both
internally and externally

Evaluates the current
communication strategies for
opportunities for advancing the
goals of the organization both
internally and externally, but
evaluation is cursory or contains
inaccuracies

Does not evaluate the current
communication strategies for
opportunities for advancing
the goals of the organization
both internally and externally

6

Finances: Budgetary
Resources, Structure,
and Responsibilities

[OL-665-03]

Meets “Proficient” criteria, and
discussion demonstrates
nuanced understanding of
budgetary resources, structure,
and responsibilities

Discusses the organization’s
current budgetary resources,
structure, and responsibilities

Discusses the organization’s
current budgetary resources,
structure, and responsibilities, but
discussion is cursory or includes
inaccuracies

Does not discuss the
organization’s current
budgetary resources,
structure, and responsibilities

6

6

Finances: Fundraising
Campaigns, Grant
Possibilities, and
Planned Giving
Opportunities

[OL-665-03]

Meets “Proficient” criteria, and
discussion demonstrates a
sophisticated awareness of the
impact of fundraising on the
organization’s budget

Discusses the organization’s
current fundraising campaigns,
grant possibilities, and planned
giving opportunities and their
impact on the overall budget

Discusses the organization’s
current fundraising campaigns,
grant possibilities, and planned
giving opportunities and their
impact on the overall budget, but
discussion is cursory or includes
inaccuracies

Does not discuss the
organization’s current
fundraising campaigns, grant
possibilities, and planned
giving opportunities and their
impact on the overall budget

6

Finances: Financial
Management
[OL-665-03]

Meets “Proficient” criteria, and
determination demonstrates a
nuanced understanding of
financial management and
fiduciary responsibilities

Determines potential
challenges to the financial
operation of the organization
based on the analysis of its
overall financial management

Determines potential challenges to
the financial operation of the
organization based on the analysis
of its overall financial management
, but determinations are is cursory
or illogical

Does not determine potential
challenges to the financial
operation of the organization
based on the analysis of its
overall financial management

6

Ethics: Budget and
Fundraising

Transparency

[OL-665-04]

Meets “Proficient” criteria, and
discussion demonstrates a
sophisticated awareness of
transparency and industry-wide
ethical standards

Discusses the organization’s
handling of budget and
fundraising transparency,
specifically in regards to
adherence to established
codes, principles, and ethics of
the industry

Discusses the organization’s
handling of budget and fundraising
transparency, specifically in
regards to adherence to
established codes, principles, and
ethics of the industry, but
discussion is cursory or includes
inaccuracies

Does not discuss the
organization’s handling of
budget and fundraising
transparency, specifically in
regards to adherence to
established codes, principles,
and ethics of the industry

6

Ethics: Ethical
Considerations

[OL-665-04]

Meets “Proficient” criteria, and
discussion demonstrates a
sophisticated awareness of
ethical considerations related
to a not-for-profit organization

Discusses ethical
considerations the organization
faces related to conflict of
interest, privacy, and
compensation

Discusses ethical considerations
the organization faces related to
conflict of interest, privacy, and
compensation, but discussion is
cursory or overlooks key concerns

Does not discuss additional
ethical considerations related
to conflict of interest, privacy,
and compensation

6

Ethics: Public Image
[OL-665-04]

Meets “Proficient” criteria, and
evaluation demonstrates
nuanced understanding of
ethical considerations

Evaluates how the ethical
operation of the organization
has impacted its public image

Evaluates how the ethical
operation of the organization has
impacted its public image, but
evaluation is cursory

Does not evaluate how the
ethical operation of the
organization has impacted its
public image

6

Evaluation: Strengths
and Weaknesses

[OL-665-05]

Meets “Proficient” criteria, and
summary demonstrates
sophisticated grasp of the
factors that become strengths
or weaknesses within not-for-
profit organizations

Summarizes the most
significant strengths and
weaknesses of this not-for-
profit organization

Summarizes the most significant
strengths and weaknesses of this
not-for-profit organization, but
summary is cursory or contains
inaccuracies

Does not summarize the most
significant strengths and
weaknesses of this not-for-
profit organization

6

7

Evaluation:
Sustainability
[OL-665-05]

Meets “Proficient” criteria, and
evaluation demonstrates a
sophisticated understanding of
how organizational strengths
and weakness factor into long-
term sustainability

Evaluates the organization’s
long-term sustainability under
the current operational
strategies

Evaluates the organization’s long-
term sustainability under the
current operational strategies, but
evaluation lacks detail or is illogical

Does not evaluate the
organization’s long-term
sustainability under the
current operational strategies

6

Conclusion
[OL-665-05]

Meets “Proficient” criteria, and
rationale demonstrates a
sophisticated grasp of
sustainability considerations

Summarizes position on the
organization’s long-term
sustainability, including
suggestions for the
organization to support future
sustainability, and supports
each suggestion with rationale

Summarizes position on the
organization’s long-term
sustainability, including
suggestions for the organization to
support future sustainability, but
summary is cursory or illogical, or
suggestions lack support

Does not summarize position
on the organization’s long-
term sustainability

6

Articulation of
Response

Submission is free of errors
related to citations, grammar,
spelling, syntax, and
organization and is presented in
a professional and easy to read
format

Submission has no major errors
related to citations, grammar,
spelling, syntax, or organization

Submission has major errors
related to citations, grammar,
spelling, syntax, or organization
that negatively impact readability
and articulation of main ideas

Submission has critical errors
related to citations, grammar,
spelling, syntax, or
organization that prevent
understanding of ideas

5

Total 100%

Running head:

STRATEGIC ANALYSIS

STRATEGIC ANALYSIS

Strategic Analysis

Maria Williams

Southern New Hampshire University

02/09/2020

Strategic Analysis

The not-for-profit organization on which this strategic analysis will focus on is the Ronald McDonald House in Macon, Georgia. Ronald McDonald House is a network of charities that provide resources to help families stay connected and closer to the care they need (Ronald McDonald House Charities (RMHC), 2020). The charity provides accommodation services to help families to stay close to their children or other loved ones receiving care in the hospital. These resources are based on the belief that health care is best provided when the sick person is surrounded by love and family.

My interest in this organization is based on experience and understanding for the need of family-centered care for critical care patients. Being a NICU nurse, such families are important to be. I am interested in learning more about an organization that gives families a place to stay close to the hospital, where their loved ones are receiving treatment, so that they can be available to offer the love and care that is vital to the healing and recovery of their loved one.

Mission

The mission of Ronald McDonald House Charities of Central Georgia is to provide support and care for families of children who are seriously ill, medically fragile, or critically injured and in treatment at medical facilities in the area.

The organization is based on the principle that home is where the family is. They believe that healing occurs when an ill child is surrounded by family in laughter and bedtime stories. The services that the organization offers provide an island of refuge in the midst of the many chaos associated with taking care of a critically ill loved one (RMHC, 2020). Keeping families together during the periods of critical care helps to improve the experience and healing process of the patient and their family.

History

The first Ronald McDonald House was opened in 1974 in Philadelphia. The initiation of this charity was inspired by the experience of Fred Hill, the Philadelphia Eagles tight end, who has a 3-year-old daughter being treated for Leukemia at the Children’s Hospital of Philadelphia. During the treatment experience, Fred and his wife Fran witnesses a lot of parents and families suffering to see and stay with their sick children (RMHC, 2020). A lot of parents, who could not afford hotels, would stay in the waiting rooms for long periods of time after travelling long distances. The Hills wanted to create a solution for these kinds of families. They rallied funds from teammates and support from Jim Murray, the team’s manager to support Dr. Audrey Evans in opening a comfortable temporary residence for families of children in treatment at the Children’s Hospital of Philadelphia. Dr. Evans was the head of pediatric oncology at the hospital, who had noticed the same problem and had the temporary residence as the solution. Jim Murray helped to get the support of Don Tuckerman working at the local McDonald’s and the Ed Rensi, the McDonald’s regional manager to start a St. Patrick’s Day Green Milkshake promotion (RMHC, 2020). The proceeds of this promotion were used to buy an old house close to the hospital that became the first Ronald McDonald House. Four decades later, more than 366 new houses have been opened around the world, serving more than 7,500 families.

Current Position

The Ronald McDonald House network currently has 217 family rooms located in 23 countries. The program also operates 50 Care Mobile programs that provide dental and pediatric services in 9 countries. It is estimated that over 7,500 families currently benefit from the services that are offered by this organization. There are currently 6 locations of the Ronald McDonald Houses in Georgia, but only one is in Macon. This location serves families from South and Central Georgia (RMHC, 2020).

References

Ronald McDonald House Charities (2020). Central Georgia: Our Ronald McDonald House. Retrieved from:

https://rmhccga.org/rmd-house.php

Ronald McDonald House Charities (2020). Our History. Retrieved from:

Our History

RUNNING HEAD:

Ronald McDonald Houses in Georgia

RONALD MCDONALD HOUSE

Ronald McDonald Houses in Georgia

Maria Williams

Southern New Hampshire

Ronald McDonald Houses in Georgia

Donor attrition is a major concern for not for profit organizations. According to Holloway (2013), retaining donors does not only enhance organizational effectiveness, but also decreases funding challenges affecting many non-profit organizations. In particular, there is a direct association between organizational transparency and contributions in the non-profit industry. Wenjun and Monit (2014) also indicate that not for profit organizations should consider having effective communication strategies in order to keep donors informed of their actions and how an organization utilizes their contributions. Lack of effective communication could result in negative donor perceptions about an organization, leading to high attrition rates. On the contrary, effective communication strategies can improve relationships between non-profit organizations and donors, leading to high donor retention rates and increased contributions. In light of this, this paper analyses leadership and communication strategies employed by Ronald McDonald Houses in Macon Georgia.

Leadership Strategies

Board Structure

The Ronald McDonald Houses in Macon Georgia is headed by a board of directors that comprises of a chairperson, a secretary, a treasury, and members. In 2019, the organization’s board of directors consisted of a total of 13 members (RMHC, 2020b). Different non-profit organizations use different board structures. At the Ronald McDonald Houses in Macon, Georgia is a governing board. The board derives its authority from the owners as well as legal act of formation to direct and control the organization’s activities. Just as it is for other Ronald McDonald Houses charters, the board of directors approves budget, hires and evaluates executive staff, develops the organization’s strategic plan, carries out the Chapter’s policy wok, and makes and amends bylaws (RMHC, 2020a). Thus, the governing board at Ronald McDonald Houses in Macon, Georgia sets organizational policies and works directly with the executive director in managing the organization.

Human Resource Management Strategies

Currently, the Ronald McDonald Houses in Macon, Georgia board of directors provides leadership through a dedicated team of 9 employees comprising of a chief executive officer, 5 program officers, and 3 development staffs. The program officers comprise of a director of programs, a facilities manager, program administrative assistant, a resident manager, and an evening family services assistant. The development staff include a director of development, a development manager, and a development administrative assistant (RMHC, 2020b). All Ronald McDonald Houses Charters have Board Development Committees that help in figuring out the skill that a board requires, recruiting new members, and ensuring that an organization stays on course with its orientation and knowledge development.

For staff utilization, Ronald McDonald Houses employ staff with skills required to support board of directors in their activities plus deliberations. All employees are required to provide accurate, timely, as well as focused information. They also inform the board of directors about new developments; collect and analyze information for effective recommendations; report budget information; take part in board recruitment; and support board committees. With regards to employee retaining and succession planning, all Ronald McDonald Houses Charters including the one in Macon, Georgia have clear requirements for employee retention and evaluation. For organization succession, all Chapters have formal mentoring programs for new board of director members for rapid orientation as well as on-boarding (RMHC, 2020a).

Strengths and Weaknesses of Current Leadership Strategies

Having a formal mentoring program will help in reducing staff turnover which does not only lower employee morale, but also increases workload on remaining workers and affects productivity. On the flip side, the leadership strategy employed at Ronald McDonald Houses in Macon, Georgia can stifle employee creativity and innovation. The best thing to do is to allow workers to contribute ideas about how the organization can improve its collections rather than reporting budgeting information.

Communication Strategies

Organizational transparency is closely linked with mutual understanding between an organization and its partners. Hence, not for profit organizations must implement communication strategies that enhance organizational transparency. Organizations are only considered trustworthy if they are transparent. Donors can only trust organizations that are effectively utilizing their contributions (Albu & Wehmeier, 2014). In this regard, different non-profit organizations are utilizing different communication and branding techniques to meet their mission.

Communication strategies at Ronald McDonald Houses in Macon, Georgia

The Ronald McDonald Houses in Macon, Georgia uses both verbal and non verbal strategies of communication to promote its values both internally and externally. The common media of communication that the organization uses for verbal communication include face to face communication, social media platforms such as Facebook. With regards to non verbal strategies, the organization utilizes memos and newspapers for internal and external communication, respectively. Leonardi, Huysman and Steinfield (2013) indicate that leaders of not for profit organizations use of social media platforms has tremendously transformed how organizations communicate with their staff as well as what communication approaches are effective to reach workers.

Public Relations and Branding Strategies at Ronald McDonald Houses in Macon, Georgia

Ronald McDonald Houses use social storytelling to boost donations for the chapter in Macon, Georgia and other locations. In 2010, the Ronald McDonald Houses Charities launched a campaign dabbed “Day of Change” to drive to donate a portion of their balance whenever shopping at McDonald restaurants. By using social media platforms to spread the campaign, Ronald McDonald Houses Charities managed to generate more than 180,000 interactions on its Facebook page as well as chapter pages. This increased the organizations online donations by 130 percent between August 2010 and August 2009 (Hibbard, 2011).

Opportunities

The organization should consider intercultural communication to increase donor collection. Dang (2016) indicates that leaders with intercultural teams must be cognizant of each employee’s workload and workflow as well as cultural differences because organizational diversity affects the way intercultural groups communicate.

Conclusion

Effective leadership and communication strategies are essential in minimizing donor attrition and increasing funding for non-profit organizations. The Ronald McDonald Houses in Macon, Georgia can attribute its success to its board of directors that focuses on identifying the skill needed for effective management, recruiting new members, and ensuring that the organization stays on course with its orientation and knowledge development. The organization can also attribute its success to its organizational communication strategies, including use of verbal and non verbal media of communication, and its storytelling campaign.

References

Albu, O. B., & Wehmeier, S. (2014). Organizational transparency and sense-making: The case

of northern rock. Journal of Public Relations Research, 26(2), 117-133.

Dang, L. (2016). Intercultural communication: Differences between Western and Asian perspective [Thesis], Centria University of Applied Sciences

Hibbard, C. (2011). Social storytelling boosts donations for Ronald McDonald House Charities. Retrieved from

https://www.socialmediaexaminer.com/social-storytelling-boosts- donations-for-ronald-mcdonald-house-charities/

Holloway, B. (2013). Using the phone to reduce donor attrition and drive loyalty.

International Journal of Nonprofit & Voluntary Sector Marketing, 18(1), 31-35.

Leonardi, P. M.,Huysman, M., & Steinfield, C. (2013). Enterprise social media: Definition,

history, and prospects for the study of social technologies in organizations. Journal of

Computer-Mediated Communication, 19(1), 1-19.

Ronald McDonald House Charities. (2020a). Ronald McDonald House Charities: Governance guide. Retrieved from

https://www.rmhdurhamwake.org/wp- content/uploads/2016/10/RMHC_Governance_Guide_English

Ronald McDonald House Charities Central Georgia. (2020b). 2019 board of directors. Retrieved from

https://rmhccga.org/board.php

Wenjun, Z. & Monit, C. (2014). Multiple relationship-management roles among communicators

in not-for-profit organizations. Human Service Organizations: Management, Leadership

& Governance, 38(5), 423-434

RUNNING HEAD: A Case Study of Ronald McDonald House

RONALD MCDONALD HOUSE

Financial Management and Ethical Considerations: A Case Study of Ronald McDonald House

Maria Williams

Southern New Hampshire University

Financial Management and Ethical Considerations: A Case Study of Ronald McDonald House

Only not for profit organizations that are performing according to their mission statements are likely to survive in the long term. Poorly managed organizations that struggle to attain their mission and create real change are likely to be cast by the side in favor of well managed and efficient ones. Thus, the ability to evaluate an organization’s performance is essential to its long term growth and sustainability. In 2018, the Ronald McDonald House Charities provided more than 2 million overstays to families of injured and sick children receiving care in leading hospitals around the world (RMHC, 2018a), signifying its growth over the years since its inception. Most importantly, Ronald McDonald House Charities can only realize its mission and survive in the long term by having ethical financial management practices

Financial Management

Budgetary Resources, Structures, and Responsibility

From the resources perspective, Ronald McDonald Houses Charities has adequate financial resources, to finance its operating activities. An examination of the organization’s annual report indicates that its total revenues increased from $60.948 million in 2017 to $144.805 million in 2018 (RMHC, 2018a), representing an increase of more than 127 percent in total revenue. The organization also has a strong budget structure and budgetary team. Concerning budget structure, Ronald McDonald Houses Charities prepares its budget using accrual basis specifying sources or revenue and type of expenses. Regarding budget responsibility, Ronald McDonald Houses Charities has a board finance committee comprising of a board chair, treasurer, organizational leaders, and finance managers that oversees its budgetary needs (RMHC, 2018b).

However, an analysis of the organization’s financial management practices shows that there is some conflict of interest. In as much as the organization requires members to sign conflict of interest (RMHC, 2018b), it is not clear what constitutes conflict of interest. The other weakness is that contributions account for more than 60 percent of total revenue. In 2017, contributions accounted for nearly 65 percent of total revenue, with the value increasing to 99.5 percent in 2018. In light of this, the organization has an opportunity to increase its total revenue by diversifying into other sources such as organizing special events and investment activities. Nonetheless, changes in federal and state regulations can greatly affect the organization’s financial resources.

Fundraising Campaigns, Grant Possibilities, and Planned Giving Opportunities

Ronald McDonald Houses Charities can attribute its strong revenues to its fundraising campaigns, grant possibilities, and giving opportunities. For instance, McDonalds, AbbVie, Coca Cola Company, RBC, La-Z-Boy, Southwest Airline, and Thrivent contributed more than $39.59 million and more than $143.8 million of the total revenues in 2017 and 2018, respectively. The organization also has massive grant possibilities from in kind partners such as Alpha Delta Pi, AT&T, Cargill, Keystone Foods, and Medela, who have provided in kind support to Ronald McDonald Houses Charities local chapters (RMHC, 2018a). The organization can attribute its strong partnership with other organizations to its planned giving opportunities. In 2018, the organization provided at least 2.5 million accommodations which saved families more than $930 million in meals and accommodation (RMHC, 2018a).

Ronald McDonald Houses Charities can still increase the number of partners by organizing clubby dinners and encouraging creativity among employees. The organization would experience significant revenue growth by doing so. Nonetheless, changes in economic performance can greatly impact the organization’s financial resources. An economic slump can negatively affect McDonald’s and other partner’s financial performance, thereby reducing the organization’s total revenue.

Financial Management

The organization’s strong revenue base courtesy of its partners means that board members can plan, organize, direct, and control financial activities such as procurement and funds utilization in an effective manner. Ronald MacDonald Houses Charities would, for instance, strive at ensuring that program services account for bigger percentage of its total budget. In addition, the organization’s board finance committee would strive at ensuring that the company applies appropriate accounting policies such as accrual budgeting and adheres to the United States Generally Acceptable Accounting Principles and other regulations.

Ethical Issues

Budget and Fundraising Transparency

From the ethical perspective, Ronald McDonald Houses Charities has a financial management standards and guidelines resource to guide its chapters in financial practices. The document promotes financial stewardship, integrity, compliance, and accountability and transparency. Board members must comply with numerous standards provided in the document for realization of the aforementioned principles (RMHC, 2018b). The organization also publishes its audited annual reports in its website, which is a clear demonstration that it operates in an open and honest way. It also demonstrates the organization’s commitment to accurately report how it uses its financial resources in compliance to the standards for charity accountability by the Better Business Bureau.

Ethical Consideration

Although management and administration accounts for only 2 percent of Ronald McDonald House Charities’ annual operating ratios (RMHC, 2018a), increasing management and administration costs to a considerable percentage of total revenue would raise ethical concern. McDonald has been using the organization’s name as a branding device, which creates conflict of interest. Horovits (2013) indicates that this is despite the fact that McDonald contributing only 20 percent of the charity branded benefit. Inappropriate utilization of resources is another ethical issue that may affect the organization’s long term survival. Inability to keep track of contributions by partners can also affect the organization’s brand image. Nonetheless, the organization can adopt latest practices such as use of information technology to enhance its financial utilization and brand image. In addition to its financial management standards and guidelines, the organization can enhance ethical practices by developing a code of ethics for its staff.

Public Image

Ronald McDonald House Charities can attribute its good brand image to its ethical practices. In fact, the organization has managed to attract a large pool of contributors and volunteers because of its ethical practices and behavior. In 2018, the organization received help from more than 500,000 volunteers who supported its mission. This is due to the fact that 96 cents of each dollar spent by the organization supported its numerous programs.

Conclusion

Properly managed not for profit organizations that have no problem attaining their mission and creating real change are likely to survive in the long run. Ronald McDonald House Charities has managed to remain in operations because of its effective financial management and ethical practices. The organization has adequate budgetary resources to manage its operations. It also adheres to United States Generally Acceptable Accounting Principles when preparing a budget and has a board of finance committee that oversees budget preparations. The organization also encourages transparency in preparation of its annual reports and budgets.

References

Horovitz, B. (2013, October 29). McDonald’s slammed over Ronald McDonald House giving. U.S. Today. Retrieved from

https://www.usatoday.com/story/money/business/2013/10/29/mcdonalds-ronald- mcdonald-house/3189709/

Ronald McDonald House Charities. (2018a). 2018 annual report. Chicago, IL: Author

Ronald McDonald House Charities. (2018b). RMHC financial management standards and guidelines. Chicago, IL: Author