GROWTH AND DEVELOPMENT OF NOT FOR PROFIT ORGANIZATIONS

QUESTION

SOLUTION

Marketing professional Practice

Q. Discuss the growth and Development of not for profit organizations in Australia Today?

Ans.  On the basis of where production is taking place we can call non profit organizations (NFP’s) as third sector. There are many driving forces which result in non profit organizations (NFP) to take activities which are business sector does not take due to lack of profitability in them, government requires mandate to undertake them and the household cannot take them all alone. Thus the non profit organizations basically indirectly fill the space between what the market delivers and whatever the government gets the authorization to fund, but this view is very simple. The NFP’s play the vital role of reflecting the inherent social influence prevailing in a country. According to the social Origins theory developed by Salamon and Anheier (1997) there are four kinds of non profit organizations:

• Statist
• Social democratic
• Corporatist
• Liberal

The development of NFP sector does not have any fixed pathway, but can be achieved by showing the adaptability to changes in nature and scales of demands.

Evolution of support of government for sector in Australia

Australia being ‘liberal’ in its attitude, so here traditionally the finding and access of human services is the liability of household. The household used to purchase these services form for-profit sector that is the business sector and NFP. NFP or ‘community social welfare organizations’ gave these services to the people who were incapable of paying. Thus in 1970’s Australian government shifted towards becoming a welfare state where the government played major role in funding the human services. The major expansion resulted due to support of public in great numbers towards the NFP services (Smyth 2008).

In 1980 a d1990’s government started following competitive market mechanisms for allotting resources and increasing the efficiency of production. Thus there was privatisation of governmental organizations ranging from banks to utilities in Australia. Thus the government stopped producing goods and services and the public wanted to know what government will fund in future. Thus the government started using the segments of NFP sector to fulfil both these needs and expectations of public to deliver services.

Government has been supportive of non profit sector by giving tax concessions, however the concessions can be accessed in various jurisdiction laws only, but mostly they are mostly covered under the common low of charity. These certain purposes become much clear by The Extension of Charitable Purpose Act 2004 which covers areas like self help groups, child care , and closed religious orders and defines all the charitable institutions.

Recently the government is showing great interest in NFP’s in order to find an alternative way to allocate the resources and organise its production capacities. The reason being that the NFP’s are efficiently capable of harnessing network governance by handling social issues which cannot be done by either the government or the markets. That is why these non profit organizations are vital part of many Australian industries today as they are considered to be good alternatives for market and government allocation. NFP’s play major role in shaping  and making the social, economic and the political institutions in the country, that is why they are sought after for the association  with business today( Lyons  1993).

References

• Lyons, M 1993, The history of non profit organizations in Australia as a test of some recent non profit theory, Voluntas: International Journal of Voluntary and Non profit organizations, vol 4, No. 3, p 301-325.
• Chapter 2, Not for profit Organizations, viewed on 13 October 2011, http://www.pc.gov.au/__data/assets/pdf_file/0009/94554/06-chapter2.pdf.

Q. What do you think are some of the problems facing for not for profit organizations today?

Ans. It has been found that the managers of non profit organizations have to face undesirable tasks like strict reporting targets as the organizations grow. On the other hand along with these reporting targets they have to cater to the multifaceted and numerous needs of wide range of stakeholders of the organization. They have to deal with these situations under the supremacy of inexperienced board members and number of volunteer staff members. It has been found by Hudson (2009) that there are mainly two common features of third sector or non profit organizations: firstly they do not dole out their profits to the owners and secondly they are not under direct political control. The third sector is supposed to be very distinct and diverse in its role (Kutcher 2011).

That is why it is said that managing the NFP’s is faintly different from managing the private or public sector. The main difference as suggested by Hudson (2009) is the way they carry their transactions. The connection or the bonding between the funders and the service users is very weak and it becomes the responsibility of the third sector managers to bridge this gap between the two.

At the same time the NFP’s face some ethical issues too which are generally not found in for-profit organizations. The main cause behind it is that the non profit organizations are more skewed towards always doing the right thing as they are single minded motivated by social goals all the time. While in case of for-profit organizations the only aim is profit maximization at any cost. That is why the problems which any non profit organization faces are very exclusive and distinct (Robinson, D.A. & Yeh, K.S. 2007). Some of the major issue faced by them are listed below:

• They are accountable and have the responsibility to answer the sponsors, funding institutions and the donors.
• They face major internal concerns related to Human resource.
• They have to deal with internal reporting which has to be right and ethical too.
• They have to conform to each and every task that has been allotted to them.
• The requirements of the stakeholders are not in tune they are always opposing each other, The NFP’s have to deal with them too.

While dealing with all these issues the managers have to face dilemma between right and wrong. The reason being there is no right path for action which can be taken and there is no trouble free method of prioritizing the responsibilities given to them. There are no standards and examples set up which can be emulated. Thus in order to sustain for a long term and to solve the recent problems the non profit organization managers have to be aware of the stakeholders outlook and all the ethical options available to them.

These NFP’s face the challenge of working with limited resources and this makes tougher for them to make profits in such tight budgets and with scarce resources. They have now started facing the unlimited pressure of sustaining on their own by diversifying their revenues in other markets too. If they start making money they will have to face severe criticism from the society too. The internal work force in the form of volunteer have to be recruited, trained, and then monitored which is a task in itself.

References

• What is the difference between for-profit and not-for-profit groups?, Our community.com.au, Australia, viewed on 13 October 2011, http://www.ourcommunity.com.au/boards/boards_article.jsp?articleId=1309
• Cuther, L. 2011, The third sector: A site for criticising not emulating, management practice, The University of Sydney.
•  Hudson, M 2009, Managing Without Profit – Leadership, Management and Governance of Third Sector Organisations, Sydney, UNSW Press, pp 480.
• Robinson, D.A. & Yeh, K.S. 2007, Managing ethical dilemmas in non profit organizations, Bond University, ePublications @bond.

Q Would you ever use spam as an email strategy to promote a fundraising for the Perth Zoo. Why or why not?

Ans:  Although it has been found that monthly newsletters are an effective way of keeping in touch and updating the public about the work done by non profit organizations, but these newsletters should contain just the relevant information about the services and fund raising etc. The emails should just contain the right and the apt information like the details about the activities which will affect the mission of the organization.

The promotional and the fundraising emails of the non profit organizations would be simple and just like email postcards. Using email is the best way to connect with the supporters and tell them about upcoming events and the fundraising campaigns or any other services which they might be interested in. But you should avoid sending spam’s as it is an offense and punishable act in some countries (Sargeant & Shang).

It has been found that email is an effective promotional tool for peer to peer fundraising campaign. With the help of this tool you can train your event participants too. You can also stay in close contact and develop a relation with your fund raisers and event donors, but sending spam’s is not the right way to do so. There are several other ways which can be legally and used for effective fundraising like making a public profile on face book, or creating a YouTube Video, or tweeting can also generate good fundraising tools.

However if you are very keen on using emails as fund raising activity it is advisable that you should use few recommendations to avoid making the email a spam and stay white listed in the internet world. The steps that can be followed are:

• The emails should be sent form a legitimate and legal email addresses so that if the recipient reply’s to it, the reply should come into that email box. So the email address should be an active one.
• The header of the email should tell or carry the name of the non profit organization that is The Perth Zoo in this case. OS that the receiver knows that it is not a spam.
• The body of the email should contain the address of the sender for further contact.
• The subject line of the fundraising mail should talk about the activity and should not be misleading like free tickets for Perth Zoo or something like that.
• There should be an option of opting out for the receiver from getting such emails in near future.
• If someone wants to opt out of the mailing these mails you should respect his/her decision and remove that person from the mailing list within 10 days (Santicola 2007).

However there are several fundraising sites and domains which provide this exclusive service which you can use to raise funds for The Perth Zoo without getting listed as a spammer. Use either the giving portals or the affinity shopping portals or the online charity auctions on websites like e-bay for fundraising. Sponsorship portals are also en effective way of connecting with your donors and fundraisers.

References:

• Santicola, A 2007, Tips for keeping can-spam complaint, Fund Raising successmab.com.
• Sargeant, A & Shang, J. 2010, Fundraising Principles and Practice, John Wiley & Sons, California.

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