Business and Management: 1.2 Types of Organizations Lesson 1-3: Non-Profit & Non-Governmental Organizations

1. Focus Question What are non-profit organizations? What are non-governmental organizations? What are the advantages and disadvantages of each? …

2. Non-profit Organizations An incorporated organization which exists for educational or charitable reasons, and from which its shareholders or trustees do not benefit financially. also called not-for-profit organization. Run without profit being the major concern. They main objective is to provide a service or to promote special causes. What are some examples of NPOs?

3a. Non-governmental Organizations Mainly operate in the private sector. It is not owned by the government. Main aim is not for profit. They are set up and run to benefit society. Are independent from the government. Are also known as Private Volunteer Organizations (PVOs). Examples: Amnesty International (human rights) Unicef (children’s welfare) What are the two types of NGOs? Operational NGOs… Tend to be involved in relief-based and community projects. Advocacy NGOs… Such as Green Peace and others…tend to be more aggressive in defending their cause. They promote awarness through direct action.

3b. Non-governmental Organizations What are QUANGOs? Quasi-autonomous non-governmental organizations…wow that’s a mouth full :P So what does that mean? They are considered semi-NGOs. They are funded by the government, but run by non-government people. They tend to support certain interests of the government.

4. Charities What are Charities? A type of NPOs. Major function is to collect donations to support a cause that helps society. Such as Oxfam and World Wild Life Fund. Similar to a Limited Company…some of the board of directors are paid, others volunteer their time. Even though they are not-for-profit, this doesn’t mean they don’t try to gain a surplus… Do you remember what a surplus is? It does not get classified as a profit, because it does not get distributed to the workers or owners of the organization.

5. Advantages of Charities Provide financial support for the welfare of society. Raise money for medical research; cancer etc.. Usually exempt from paying taxes. Donors who give money are tax exempt. Can have limited company. Disadvantages: Lack of profit = lack of incentive…services may not be render for long periods of time. Trustees not allowed to gain financial benefits. Must go through a registration process. All financial activities MUST be recorded and reported (to prevent charity fraud). Can have limited liability, could lead to fraud as owners are not responsible. Survive based on donations. – lots of competition = limited finances.

6. Pressure Groups Are also non-profit organizations. They address a special interest of the group. Trade unions, animal rights, environmental protection groups. The aim to win public support and media support for their actions. They try in influence government legislation. One advantage: They force businesses and the government to take account of the true costs of business activity… Such as pollution, environmental damage etc…

7. Types of Organizations See pg. 38 IBO Textbook.