Issues in the Not for Profit Sector
Not for profit organizations --- sometimes referred to as the "third sector" --- are those groups that try to improve conditions through the provision of services. Unlike businesses, their goal is not to make money above what is needed to carry out their work. There are many issues facing non-profits making it challenging for them to carry out their work.
Other People Are Reading
-
Finances
-
Limited finances is one of the biggest issues not-for-profit groups face. Government and corporate grants to charities have declined in North America since the 1990s. Individual philanthropy has also seen a decline. Simultaneously, there has also been an increase demand for services as many people face lower incomes and job losses.
Non-profits must have very careful accounting of how they spend their money. Donors want to see most money being used by the people who need it the most, so there is a continual need to keep overhead and administrative costs low. Yet, it takes money to make money and organizations must employ grant writers and fundraising professionals to help them bring in new funds.
Volunteerism
-
Financial cutbacks mean that not-for-profit organizations must rely on volunteers to do the work once done by staff, as well as meeting the increased demand for services. Yet, volunteerism is on the decline as well. Not as many people are able to volunteer, the jobs require a higher skill set and concerns about sexual abuse and impropriety mean more stringent volunteer checks and training are required.
-
Legal and Regulatory Environment
-
Charities face increased legal complexities and regulations. Donors want to see strict accounting of how each dollar has been spent. Governments set stringent criteria for granting charitable donations and require timely, detailed paperwork to support the use of a charitable number.
Board of Directors and Governance Issues
-
The role of the board of directors is very important for not-for-profit organizations. All of the above issues means that serving on a board of directors can be a difficult and time-consuming challenge. Boards are legally responsible for fiscal oversight of staff and the organization. Many board members are required to fulfill tasks that once were staff roles. Boards are asked to play the role of lawyer, accountant, human resources professional and policy analyst --- all for free.
-
References
Resources
- Photo Credit Jupiterimages/Creatas/Getty Images Goodshoot/Goodshoot/Getty Images
