CAF-7 · Chapter 11 · Question 7 of 15
Which of the following is a primary difficulty faced by Non-Profit Organizations (NPOs), such as charities, when attempting to prepare their annual budgets?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) They have unpredictable revenue streams because donations and grants fluctuate
Explanation
NPOs generally rely on donations, grants, and fundraising, which are highly volatile and unpredictable. This unpredictability in revenue makes accurate budgeting and financial forecasting extremely difficult compared to commercial businesses.
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