The Research Of Financial Risk Management Of NPO

Since the 1970s,NPO in the world today are developing on a scale that is unprecedented. According the report issued by The Economist in 2001, by 2001 there are a total of 30000 international NPO in the world. Their activities include having a finger in parish-pump affairs and solving global problems. With reform of the economic structure and reform of the political system, NPO has become one of the fastest developing sectors in China. The third world is increasingly playing an ever more significant role in the social affairs of our country. NPO can share the burdens of the state finance and help the country overcome social problem, such as social relief, poverty alleviation, and medical service. Although there is legal guarantee, China's NPO are under the tight control government. At the same time under the market economy NPO have to face the financial problems and financial risk. No one can doubt the essential fact that the financial management and financial risk of NPO over the last years has caused wide public concern all over the country. Financial risk management is of great practical significance to study So it chooses financial risk management as the subject.Here the subject may be dealt with four parts:Chapter 1 the outline of the financial risk management of the NPOFirst, there are the reasons of selecting titles and the significance of studying the title. Secondly, review and summarize the past and the present of the study of the financial management and financial risk management from home and abroad. At the end there are the concept of the NPO and the financial risk.Chapter 2 the problems of the financial risk managementThe first part is discussing the problems exiting in the financial risk management of NPO. Each argument is defended by facts and figures. The second part is discussing the root of the problems, including its own deep-rooted factors and the external factors. For example, one is unsound or disordered laws.Chapter3 The environment of the financial risk managementThis chapter is a clear exposition of the relevant work to establish the management system of financial risk management.There are three parts are about how to establish and improve financial management regulations. There are budget management system, the financial management of the Revenues and Expenditures, and the supervision system. The budget management system contains a basis for the management, the methods and the specific measures to make a budget. The second passage explains the specific content of revenues and expenditures. The supervision system has two aspects.Chapter 4 the establishment of the financial risk managementThe chapter is to design the index system, to explain the procedure and methods of the financial risk management, and to use the standard in a simple model.The first part is about how to establish the objective systems of financial risk management. The system includes the general objective and the specific targets. The general objective is to achieve the security of the financial management at a minimum cost. The specific targets include three ones: the one in the area of raising funds, the one in the area of investment and the one in the area of expenditure.The second part is about the methods of diagnosing financial risk and the analysis methods.The third part is to establish the index system. First, it gives the principles considered in the establishment. Under the principles, it designs the system, including indexes about ability to pay in the future, financial performance, earning power and the potential for development. Between them the debt-payment is the core, the management efficiency is the assistants and the revenue and the potential of development are to give the more information.The forth part is appliance of the index system. It uses the AHP to give the ratio of the different index and establishes a simple model to discriminate the financial state. First, it gives the introduction of AHP. Then It use the method to determine the ratio, and it establishes the model, evaluate the financial situation. At the end it analyze the limitations of the method.The fifth part is about the techniques to deal with the risk when it occurs.The main character of the paper are as following:1. It tries to treat the state public institutions, non-state-run institutions and social group as NPO to study the subject. There are a lot of researches about financial risk management of universities, but there are little researches about non-state-run institutions and social group. So based on the relevant theory, it discusses the environment of the NPO and gives some suggestions.2. The index analysis of financial risk of NPO. Its risk indicators system contains fours types: ability to pay in the future, financial performance, earning power and the potential for development. These can also be divided into qualitative indicators and quantitative indicators.