Non Profit Organization

Our society is composed of two sectors a public one which is owned by the government and a private one where it is owned by private individuals. Usually, we have organizations within the economy where one is profit oriented and its main business objective is to make profit from the revenue it tends to make by the end of a certain period, therefore, nothing from the extra money made will be used to develop the business, instead, the profit will go to the owner of the business, adding to that the owner can be giving some of the profit to its employees as a way of motivation according to Maslow’s hierarchy of needs which will eventually affect positively on the business. The other type of organizations is the nonprofit oriented, where it’s main business objective is not to make profit, instead, it is to serve the well being of the society. Usually those nonprofit businesses are owned by the government, which means that all of surplus revenue made by the business will be used for doing certain activities that will develop our society. Usually in this case the government will
be monitoring such businesses in order to make sure that all of the surplus revenue that is made by the business is not being used for personal purposes rather, they are used to help in creating a better society. When we say “The not for profit sector plays a unique role in a nations economy” it is true for multiple of reasons and one of the main reasons is the consumers who will help in such contribution. Charities for example will be receiving donations from consumers who will eventually benefit from receiving tax exemptions which will eventually motivate the consumers to donate more and allow the non for profit sector to achieve its main purpose which is the well being of the society.
Regarding this point “While NPOs are permitted to generate surplus revenues, these revenues must be retained by the organization for its self-preservation, expansion, or plans.” We can see that non for profit organizations are used to achieve three main objectives which includes expansion, where if one part of the organization is doing well and is creating revenues in one part of the society, then the money it gets from the donations for example can be used to create another branch of it in another part of the society by expansion on one hand, here the business will be growing externally. While on the other hand, there business can be expanding internally, this means that it can add more resources within the business that will enable it to nourish more and grow more which will affect positively on the business and not to forget on the society too. This will enable the business to create plans for the future and will eventually enable it to determine any obstacles if they were to be found in the future so that the business will be able to avoid it as fast as possible. The nongovernmental organizations and the charities are a very well common example in our daily lives. Any activity done by NGO’s and charities is done to serving its main aim even it grew and expanded it will be serving its main aim rather than prestige. The main difference between them is that NGO’s are funded via the government and via the public sector help and grants while the charities are funded via donations. Both aim to fill the gap that has taken place between the private sector and the public sector.
However, when we want to think logically about it, there are some disadvantages for such businesses where the business will get affected itself and will also affect the society. Many of these organizations do not give any sort of salary for its employees which means according to Maslow’s hierarchy of needs their needs will not be fulfilled therefore they will be de-motivated and will eventually work inefficiently than those who work and get salaries. Therefore, such employees will eventually retire from work which will affect the society negatively since the amount of non-working employees will increase, however, if we really want to think about it from a critical point of view, this will be an advantage for other businesses, since there is a huge number of non-working employees looking for jobs and whom are willing to work under any condition even if the amount of salary they are going to receive is low. This allows the business to focus more on its outcome and use its money and revenue on serving the well being of the society and at the same time to have motivated employees which will eventually reflect positively on the business’s reputation in the long run.

The need of nonprofit sector is seen important when discussing governmental issues because the government intend to correct the failures of the private market, the government can finance encourage the provision of goods and services that are unprofitable to the private sector. So, in this case nonprofit organizations sees the limitation of both sectors and when saying so the private sector can’t fully satisfy consumers unable to pay for their demands so these people cannot benefit from the private sector organization.

Talking about how these nonprofits are financed they are financed by the governments revenue and from tax payers, nonprofits compete with their rivals the for-profit organization an example can be “schools funded by churches and local organizations competing with profit oriented schools” . voluntary work is also counted as a source of finance for nonprofits and is the largest way of funding, and the number of voluntary labor is increasing in the face of paid labor.

Looking at how increasingly the nonprofit sector is expanding because its filling the gaps when the government cannot proceed to the needs of consumers. And due to this significance, we can see how increasingly its occurring in the united states that was recorded by gollmar in 2008.

To conclude with, the not for profit sector plays a unique role in a nation’s economy, it’s like filling a missing gap in the economy that through it some needs are fulfilled, and agreed on definition of a not for profit organizations are organization that does not have any shares or shareholders but instead it deals with the corporate social needs, and the profit incurred from a not for profit organization is called a surplus that is used to invest in the organization and to help with any social needs.
It is considerate unique because its fulfilling needs in a cost-effective way its helping in developing the society into a better place, it’s also encourages the new generation in participating in unpaid voluntary work for helping the society. Some businesses are using charity advertainment to cooperate to their corporation social responsibility and as an advertisement method to their
organization.