The mayor of a large city approaches a group of citizens and suggests that they form

Question:

(Characteristics of not-for-profit and governmental entities) The mayor of a large city approaches a group of citizens and suggests that they form an organization to provide social, educational, and recreational programs for local youth. The group agrees and forms an entity called the Community Youth Organization (CYO). The group also chooses a board of directors, and the board hires an executive director and several staff members. CYO’s activities are financed entirely by grants from the city, and many of CYO’s programs are held after school hours in the high school. Is the CYO a not-for-profit or a government organization? Why? What changes in characteristics would be needed to change it from one type of entity to the other?

Answer:

Community Youth Organization (CYO) is a not-for-profit organization .

Reasons:

• All activities of the entity are managed and controlled by the group of citizens instead of appropriate governmental officials.

• Community Youth Organization (CYO) is financed entirely by the grants from the city and many of its programs are held in the local high schools.

Changes in characteristics needed to change the entity into a governmental entity:

• The mayor of the Community Youth Organization (CYO) should be appointed by the board of directors of the organization.

• The appointed mayor should be approved by the administrative director of the entity.

• All activities of the organization should be managed and controlled by the governmental officials.

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