Deck 6: Organizational Structure

Question 1

Before entrepreneurship became a major factor in the accomplishment of social goals, the delivery of social services was largely accomplished by entities labeled "charities" or "charitable organizations," which were characterized by which of the following?

A) They were taxed at a much lower federal tax rate
B) They undertook relatively simple and easily accomplished activities
C) They had a complex profit structure because they were neither public nor private
D) They routinely received public grant monies to help them to sustain their efforts from governments at all levels

Answer 1

D

Question 2

Which of the following was not a result of the Tax Reform Act of 1986 in the United States?

A) It expanded tax advantage to individuals and organizations that made donations to nonprofits
B) It made up for the federal government dollars withdrawn as a result of Regan's "new federalism"
C) It proved not to provide enough additional revenue to support the myriad nonprofits springing up to meet the rising demand for social services
D) It resulted in increased competition and a lack of available funding that forced nonprofits to look for financial resources

Answer 2

B

Question 3

One way to frame the range of structural options available in social entrepreneurship is as a spectrum, with which forms at the ends?

A) Pure nonprofit and hybrids
B) Hybrids and pure for-profit
C) Pure nonprofit and pure for-profit
D) Pure nonprofit, hybrids and pure for-profit

Answer 3

C

Question 4

All of the following are examples of hybrid structural options in social entrepreneurship except ___________________?

A) For-profits with nonprofit subsidiaries
B) Nonprofits with for-profit subsidiaries
C) Pure nonprofit
D) Nonprofit partnerships

Question 5

Are nonprofit organizations precluded from generating a profit?

A) Yes, always
B) Yes, as long as they observe the "private inurement doctrine"
C) No, never
D) Profit is not applicable in a nonprofit context

Question 6

Which of the following statements most accurately describes traditional philanthropy from individual donations, foundation grants, government grants, and corporate giving?

A) Individual donations account for the greater part of philanthropic giving
B) There are fewer foundation grants to be had and they are not popular with nonprofit social ventures because they provide smaller amounts of money
C) Corporate donations account for the greater part of philanthropic giving
D) Foundation grants are not competitive, but they do require rigorous reporting requirements throughout the granting period

Question 7

Which of the following is not typically considered to be a challenge to social entrepreneurs seeking traditional philanthropy grants?

A) These grants tend to be generic and somewhat vague about what specific activities the funders want to fund
B) These grants tend to be short-term, typically from one to three years
C) Many funders only want to fund innovations in their area of giving
D) Many funders only want to fund high-visibility tangible assets that lend themselves to generating publicity

Question 8

Forms of nontraditional philanthropy that have emerged in recent years include ______________________?

A) Charitable giving by individuals and corporations
B) Public market investments and grants
C) Social venture for-profit organizations and businesses
D) E-philanthropy and private market investments

Question 9

Which of the following would not be considered an advantage of the relatively new type of philanthropy via the Internet, i.e., e-philanthropy?

A) It allows nonprofits to get money faster
B) It reduces the costs of reaching donors
C) It yields lower donations, on average
D) It lowers processing costs

Question 10

Purely nonprofit structure offers considerable choice in sources of financing, but it is limiting in what way?

A) It provides control depending on the financing received and from whom
B) It relies heavily on the largesse of others and is beholden to their agendas
C) It is not restricted in the amount of earned income it can generate
D) None of the above are limits to the pure nonprofit structure approach

Question 11

The pure for-profit structure for social ventures follows the same general conventions as those observed by for-profit commercial ventures with some differences. All of the following are examples of these differences between the two except which one?

A) The pure for-profits social ventures pursue a social mission
B) The pure for-profits social ventures seek to do well and do good simultaneously
C) The pure for-profits social ventures' success relies on the goodwill they generate with their customers and the general public
D) The pure for-profits social ventures must do well even if that means not meeting high ethical standards

Question 12

There are several legal structures available to entrepreneurs who choose to structure their venture as a for-profit including ______________________?

A) Sole proprietorship and partnership
B) Sole proprietorship, partnership, corporation and limited liability corporation
C) Partnership, limited liability corporation and corporation
D) Partnership and limited liability corporation

Question 13

There is an emerging type of corporation that is not yet widely recognized in a legal sense or known by the general public, the "Benefit corporation" ("B corporation"). All of the following statements accurately describe this new type of corporation except one. Which of the following is not characteristic of the new B corporations?

A) They are certified and must meet performance standards relative to their impact on their community and the environment
B) They are legally tasked with pursuing both a profit and an articulated public purpose
C) They have been made legal in approximately 40% of the states including New York , Colorado and Pennsylvania
D) Performance relative to their stated public purpose is tracked by independent monitors

Question 14

Hybrid structures are forms of innovation in the vehicles by which social mission can be delivered and they represent various combinations of structural elements from nonprofit, for-profit, and/or government organizations. Which of the following would not be considered to be a hybrid?

A) For-profit with nonprofit subsidiaries
B) "B," "S," or "C" corporations
C) Nonprofits with for-profit subsidiaries
D) Nonprofits with nonprofit subsidiaries

Question 15

Which of the following answers is why the form of nonprofits with nonprofit subsidiaries might be adopted?

A) In order to undertake business activities that are not related to the parent organization's mission but that generate revenue
B) In order to increase the prospects of receiving certain grants
C) In order to avoid a loss of grant money from funders that reduce their grants if other revenue sources are found by creating a subsidiary nonprofit to retain earnings
D) All three answers are applicable

Question 16

What is nonprofit consortium?

A) A profit-nonprofit partnership
B) A nonprofit-profit partnership
C) A nonprofit-nonprofit partnership
D) A profit-profit partnership

Question 17

Which legal forms do nonprofit consortia tend to take?

A) Cooperative ventures (or cooperatives) or strategic mergers (or consolidations)
B) Cooperative ventures (or cooperatives) or limited liability corporations (LLCs)
C) Cooperative ventures (or cooperatives) or strategic mergers (or consolidations) or limited liability corporations (LLCs)
D) Limited liability corporation (LLCs) or strategic mergers (or consolidations)

Question 18

Successful nonprofit-for-profit partnerships tend to have several common characteristics and these include which of the following, according to Lasprogata and Cotton?

A) A good fit between the cultures of the partnering organizations
B) A perception by both of the partners that the partnership is beneficial to the for-profit partner
C) A perception by both of the partners that the partnership is beneficial to the nonprofit partner
D) A unique set of strategies for each of the partners

Question 19

How was the cooperative defined?

A) A public organization that is owned and controlled by the people who use its products, supplies or services
B) A private business organization that is owned and controlled by the people who use its products, supplies or services
C) A private business organization that is owned by the people who use its products, supplies or services
D) A private business organization that is controlled by the people who use its products, supplies or services

Question 20

Which principle does NOT define the nature of a cooperative?

A) Autonomy and concern for community
B) Cooperation among cooperatives and democratic member control
C) Member economic participation and voluntary membership
D) All three answers define the nature of a cooperative

Question 21

Before entrepreneurship became a major factor in the accomplishment of social goals, the delivery of social services was largely accomplished by tax-exempt organizations labeled "charities" or "charitable organizations."

Question 22

In the 1980s the rolling back of federal government responsibility and funding for charitable work responsibilities for many social services were transferred to the local level and this decreased the demand for social services.

Question 23

One of the chief advantages of adopting the nonprofit structure is the multiple options it affords for generating revenue because it provides the ability to produce earned income, within the limits, but it makes the social venture eligible to receive philanthropic dollars.

Question 24

If a nonprofit is found to be engaged in revenue-generating activity that does not meet the operational test, the earnings from that activity are subject to the Unrelated Business Income Tax (UBIT).

Question 25

One of the chief advantages of adopting the nonprofit structure is the multiple options it affords for generating revenue such as the ability to produce unlimited earned income and it makes the social venture eligible to receive federal funding.

Question 26

Corporate giving offices have long supported charitable activity in the community or communities where these businesses operate by providing large grants for the purposes of receiving tax write-offs and generating goodwill among customers and prospective customers.

Question 27

A number of government agencies have made grants to nonprofit ventures to develop business incubators to encourage entrepreneurship among economically disadvantaged groups; however, the grants are typically only for the bricks and mortar aspects of the incubator and not for covering the incubator's expenses for developing entrepreneurs and companies.

Question 28

Philanthropy via the Internet has grown rapidly in recent years and this so-called e-philanthropy has provided a new way for nonprofits to interact with their donors.

Question 29

Fewer and fewer social entrepreneurs who are frustrated by the restrictions of the nonprofit structure and the management vicissitudes of the for-profit structure opt to create hybrid structural models.

Question 30

In the United States and Canada a new designation, the "community interest company," a for-profit structure that allows for putting a larger share of profits toward a social mission and for reduced compliance with government regulations has been created.

Question 31

Most nonprofit parent ventures that establish a for-profit subsidiary own 100 percent of the stock of that subsidiary and thus control the latter's board of directors so both entities can share the same board.

Question 32

Nonprofit consortia tend to take one of two legal forms: cooperative ventures or strategic mergers (or consolidations).

Question 33

The best way to combat resistance to merger or consolidation of nonprofit-nonprofit partnerships is to educate the prospective parties to its benefits: integration of services, expansion of client markets, expansion of resource pools, fuller attainment of mission, and survival.

Question 34

Many nonprofit-for-profit partnerships have a strong marketing component often referred to as cause-related marketing.

Question 35

A nonprofit with a strong brand (a name and a mission that are highly recognizable and respected) is not an attractive partner to commercial businesses because they can detract from the mission and marketing of the commercial business.

Question 36

The people who use its products, supplies or services own and control the cooperative.

Question 37

Cooperatives are a new phenomenon.

Question 38

What was a major turning point in the 1980s for the functioning of "charities" or "charitable organizations"?

Question 39

What are the end points at the Spectrum of Structural Options in Social Entrepreneurship?

Question 40

What are the four types of traditional philanthropy?

Question 41

Describe the challenges to nonprofit social ventures presented by traditional philanthropy as it is usually practiced.

Question 42

Which forms of nontraditional philanthropy have emerged in recent years, according to Wei-Skillern et al., (2007)?

Question 43

What are the advantages typically associated with "e-philanthropy" or philanthropy via the Internet?

Question 44

Describe the legal structures available to entrepreneurs who structure their venture as a for-profit?

Question 45

Hybrid structures assumed by social ventures represent various combinations of structural elements from nonprofit, for-profit, and/or government organizations. List the more common structures and provide an example of each.

Question 46

New hybrid structures are being developed and tested on a regular basis and are said to be limited only by _____________________________

Question 47

Lasprogata and Cotton (2003) distinguished three common characteristics of successful nonprofit-for profit partnerships. Which ones?

Question 48

A cooperative has been defined as a private business organization that is owned and controlled by whom?

Question 49

Which seven principles that define the nature of a cooperative were identified by the International Cooperative Alliance in its Statement of Cooperative Identity?

Question 50

Nonprofit ventures carry the designation as tax-exempt nonprofits that must originally meet and continue to maintain their status by being in conformance with the requirements of Section 501(c) (3) and the Treasury Regulations. Explain what is meant by conforming to the "organizational test" and the "operational test."

Question 51

New hybrid structures are being developed and tested on a regular basis and are said to be limited only by the imagination and the law (or, more accurately, its interpretation). The imagination of whom or what? And what could feed this imagination?

Question 52

Picture the seven principles that define the nature of a cooperative that identified by the International Cooperative Alliance in its Statement of Cooperative Identity. List them in order of priority for the continuity of a cooperative, and explain your answer briefly, per each of the seven principles.

Question 53

What is in your eyes the main disadvantage of a cooperative versus all other organizational structures of social enterprises? Why?