1)How would raising the minimum wage affect nonprofit organizations?

2)Why is the Interest rate determined by Federal Reserve, rather than the free market (Demand/Supply)?

1)Raising the minimum wages have the following implications on non-profit organizations:

• Reduced staffing. Raising the minimum wages prompts nonprofit organizations to lay-off some workers in order to reduce the wage bill. The move is also known as a coping strategy which helps to compensate for the increased cost of labor.
• Cutting back services offered. A rise in minimum wages is counteracted by reducing the number of services offered in order to cut down the cost of offering the services. Ideally, limiting various services translates to a minimal cost of operation.
• Scaling back service areas. Non-profit organizations pursue the coping strategy when minimum wages rise by limiting the area of coverage. In other words, the organizations reduce the area of operation or service delivery as they strive to work within the limits of the available budget because of increased minimum wages.
• Reducing the amount and quality of services delivered. The increased cost of labor due to raised minimum wages compromise the quality and services of non-profit organizations due to budget constraints.

2)The two interest rates above (the federal funds rate and the discount rate) are actually the only two rates that the Fed sets directly. They serve as a base or starting point for the individual banks to set their own interest rate structure, based on each bank's assets and liabilities and business outlook. Those bank rates, therefore, are determined by the market laws of supply and demand.