Nongovernment organisations | My Assignment Tutor

1Session 2: ‘For-profit’, ‘Not-for-profit’ and ‘Nongovernment organisations’ (P1- part 1)1P1: Explain different types and purposes of organisations; public,private and voluntary sectors and legal structures.Prepared by: Dr Gilbert ZvobgoDr Reza Aboutalebi Business environment is the surrounding conditions inwhich the business operates Divided into two broad categories◦ The internal environment (microenvironment) Includes those factors over which the business has somecontrol, such as employees, managers, managementstyle, corporate culture and company policies◦ The external environment (macro-environment) Includes those factors over which the business has littlecontrol, such as economic conditions, government policy,competitors and technology It may be further divided into the operating environment21 22One way to categorise organisations or separateorganisations from each other is consideringimportance of ‘profit-making’ for each category of theorganisations. There would be three types oforganisations including:❖ For-profit organisations❖ Non-profit (not-for-profit) organisations❖ Non-government organisations (NGOs)3A for-profit business seeks to generate income for itsfounders and employees.Profits can be shared with owners, employees, andshareholders.The vast majority of organisations in the world are forprofit companies. They can be very small, small,medium, large or very large sized.43 43 What makes an organisation a non-profit has to do withpurpose, ownership, and public support. These elements create:◦ A mission that focuses on activities that benefit society andwhose goal is not primarily for profit◦ public ownership where no person owns shares of thecorporation or interests in its property◦ income that must never be distributed to any owners but isrecycled back into the non-profit corporation’spublic benefit mission and activities.5 Purpose: To provide public services. Ownership: Is owned by the public. It belongs to no privateperson, and no one person controls the organisation Control: Control of a non-profit lies with a governing board ofdirectors or trustees. The responsibility of that board is to seethat the organisation fulfils its purpose. Accountability: Are accountable to the public and must fileannual information returns with the government – regarding itsfinances.65 64Not-for-profit is one type of organisation. There are fourtypes of not-for-profit (non-profit) organisations: Charitable organisations Advocacy organisations Social/recreational organisations Satellite organisations7There are three types of organisations:❖ For-profit organisations❖ Non-profit (not-for-profit) organisations❖ Non-government organisations (NGOs)These include a wide variety of institutions involved in Poverty assistance (soup kitchens, counselling centres,homeless shelters, etc.) Religion (churches and their ancillary possessions, such ascemeteries, radio stations, etc.); Science (independent research institutions, universities); Health (hospitals, clinics, nursing homes, treatment centres) Education (libraries, museums, schools, universities, andother institutions) Promotion of social welfare; Preservation of natural resources (National Trust) Promotion of theatre, music, and other fine arts.87 85These groups attempt to influence legislative process and/orpolitical process, or otherwise champion particular positions May call themselves ‘social welfare organisations’ or perhaps‘political action committees. Not all advocacy is lobbying and not all political activity ispolitical campaign activity. Some of this type of programmecan be accomplished through a charitable organisation, butthat outcome is rare where advocacy is the organisation’sprimary undertaking.9 Examples: Country clubs, hobby and garden clubs, sportstournament organisations all can qualify as non-profitorganisations, provided that they adhere to basic guidelinesof net earnings distribution, etc. Unlike other tax-exempt organizations, however, theirinvestment income is taxable.Satellite organisations: Satellite Not-for-profit organisations are deliberately organisedas auxiliaries or subsidiaries of other organizations. Examples: cooperatives, retirement and other employee benefitfunds.109106 Success depends on its reputation in community Customers can enhance or damage this reputation,depending on level of satisfaction with service they receive. Meeting and exceeding expectations of donors, volunteersand clients ultimately results in increased donations offinancial and human resources to the agency.11 Non-government organisations (NGOs) are institutions thatconduct their affairs for the purpose of assisting otherindividuals, groups, or causes rather than garnering profits forthemselves. Are tax-exempt businesses that benefit the good of the public. Have no shareholders; do not distribute profits in a way thatbenefits members, directors, or other individuals in theirprivate capacity.1211127 One of the differences between not-for-profitorganisations and NGOs is that not-for-profit organisationsgenerally do not have political activities but the majority ofthe Non-government organisations (NGOs) are directlyor indirectly involved in political activities.Examples of NGOs are: Political parties Political pressure groups1313

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