Which of the following statements is true about the operation of charities?

Prepare for the SQA Higher Business Management Exam. Enhance your skills with dynamic flashcards and practice questions. Explore hints and explanations to ace your exam!

The statement that charities may run retail outlets to fund their cause accurately reflects a common practice within charitable organizations. Many charities operate retail shops to sell donated goods or products, such as clothing, home goods, or other items. The revenue generated from these sales is then reinvested into the charity's programs and initiatives aimed at fulfilling its mission. This approach not only provides a source of income but also helps raise awareness about the charity's cause and engages the community.

Other options misrepresent the nature of charities. Charity profits are not retained by owners since charities are typically nonprofit organizations. The premise that all employees are unpaid is also misleading, as many charities employ both paid staff and volunteers. Lastly, while individual donors contribute significantly, charities can also be founded by groups, organizations, or even government entities, making the notion that they are solely founded by individual donors inaccurate. Each of these points clarifies the operating principles of charities while spotlighting the validity of running retail outlets as a legitimate fundraising strategy.

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