Week 2The Idea of a Non-Profit and Voluntary Sector

Tech Tools

Elements of the nonprofitsector� Public Serving� Voluntary/Grassroots Associations� Member-Serving Non-profits

The Idea of a NonprofitSector

� The nonprofit sector is the contestedarena between the state and the marketwhere public and private concerns meetand where individual and social effortsare united.

� Grouping them together into one entity

is highly problematic.

Non-profits

� Nonprofit organizations have already actedas practical vehicles for the delivery of abroad spectrum of community services,ranging from affordable housing to theaterperformances to vocational training to healthcare.

� The nonprofit sector appears, therefore, to

be a real and identifiable group of tax-exempt organizations that encouragepolitical engagement and produce services.

Non-profits

� From the largest hospital and universities(which fund their operations by collectingfees or tuition) to small mentoring programsand avant-garde arts organizations (whichsurvive on charitable contributions),nonprofits span a tremendous range oforganizational forms.

� Many of these forms are stable and lasting,

while others are fragile and transient. � Some of the organizations that are

3 Features of a Non-Profit

� Three Features of NonprofitOrganizations:� (1) they do not coerce participation;� (2) they operate without distributing profits to

stakeholders; and� (3) they exist without simple and clear lines

of ownership and accountability

� Unique Advantage:� NPOs perform important societal functions

neither government nor the market is able tomatch.

Controversy

� The high salary levels of many nonprofitexecutives

� The accumulation of capital in the form

of large endowments has also calledinto question the boundary betweenbusiness and nonprofit organizations

Composition of NPO sector

� In the United States today, there aremore than 1.5 million registerednonprofit organizations, as well asseveral million informally organizedcommunity groups.

� The formally registered organizations

fall into two broad and porouscategories: � Those that serve the public� Those that serve members.

Composition of NPO sector

� The public-serving organizations,classified under section 501(c) 3 of theIRS code, operate in almost everyimaginable field of human endeavor,and include:� social service agencies helping children, the

elderly, and the poor� independent schools and private colleges� community clinics and hospitals� think tanks, environmental organizations,

cultural groups such as museums, theaters,and historical societies

� International assistance organizations.

Non-GovernmentalOrganizations� A non-governmental organization (NGO) is a

type of non-profit organization that works topromote human good while operatingseparately from any national government

� The purposes of NGOs cover the entire range

of human interests and may be domestic orinternational in scope.

� Many NGOs are key sources of information

for governments on issues such as humanrights abuses and environmental degradation.

Types of NGOs

Operational NGOs� Their primary purpose is the design and

implementation of development-relatedprojects. One categorization that isfrequently used is the division into relief-oriented or development-orientedorganizations; they can also beclassified according to whether theystress service delivery or participation;or whether they are religious andsecular; and whether they are morepublic or private-oriented. OperationalNGOs can be community-based,

Composition of NPO

Shareholders:� Community� Clients� Board of Directors

� Board Chair� Committees� Executive Director

� Staff� Volunteers