The Nature of Governmental Activities

We saw from our previous lesson that governmental and nonprofit organizations exist in a social, legal, and political setting that is different from the for-profit environment. We are also beginning to see that because government exists to provide public goods and services, most general purpose governments engage in the three broad service categories of

• governmental,
• business type, and
• fiduciary.

The activities of government, such as administration, police and fire, public works, education, parks, etc. are referred to as governmental activities. Governmental activities are the core or basic services that government provides. Governments also are involved in certain activities that are called business-type activities, such as toll roads, parking garages, liquor stores, golf courses and swimming pools. In addition, governments operate in a fiduciary capacity as either an agent or trustee for individuals or entities.