Non-Profit Organisations - Research Paper Example

 Executive Summary A non-profit organisation is required to deal with the issue of unemployment that is affecting the society and economy at large. Micro crediting for entrepreneurs and skill training will help to create employment opportunities for the unemployed masses of North East and Yorkshire that are most affected locations. Funds will be primarily acquired from the external donors like agencies, individuals and the companies. Such a financial dependence is a potential hurdle for the organisation to perform continuously. Organisational structure will be flat and managers of each function will be independent to take decisions. Overall financial lagging and legal complications in micro crediting are the implementation issues that organisation will potentially face. Hence it needs to focus on financial sustainability through expert human resource, strong industry linkage and financial reserve development. Table of Contents Executive Summary 1 Introduction 5 Vision 6 Objectives 6 Stakeholders Analysis 7 Management of Organisation 7 Unemployed Youth 7 Donors 7 Society 8 Government 8 Activities 8 Research 8 Micro Crediting Structure 9 Counselling 9 Training and Development 9 Funds Acquisition 10 Monitoring and Evaluation 10 Non-profit Organisational Setup 11 Public Issue 11 Public Funds 11 Social Responsibility 11 Pros and Cons 12 Advantages 12 Self Employment 12 Skilled Manpower 12 Internal Employment 12 Flexibility 13 Innovation 13 Tailored Assistance 13 Least Hiring Restrictions 13 Disadvantages 13 Geographic Restriction 13 Reduced Replication 14 Limited Resources 14 Organisational Structure 14 Implementation Issue 15 SWOT Analysis 15 PESTLE Analysis 16 Strategies 17 Financial Strategies 17 Human Resource Strategies 18 Conclusion 18 References 19 Introduction Unemployment rate in the United Kingdom is about 6.35% as determined by the Office of National Statistics (2014). Hidden unemployment is another associated phenomenon that comprises of people who like to work additional hours to meet their needs or are discouraged workers. Youth unemployment (unemployed aged 18 to 25) is a prevalent issue that has created several problems. According to 2014 statistics, 767,000 people are unemployed aged below 25 which is really alarming issue and needs to be addressed accordingly. Boys and girls of aged 18 who are neither employed, in education or training are 18.5% and 15.3% respectively. Major causes of such unemployment are stagnant economic growth, financial crisis, public sector cuts, lack of qualifications and experience. The social impact of youth unemployment is very detrimental and numerous areas like economy, society, health, etc are badly affected. The total direct cost of unemployment is £4.7 billion per annum that includes lost of productivity along with job seekers’ allowance (Statista, 2014). Youth unemployment impacts mental health of the young ones that generates risk of suicide attempt as many such people suffer from panic attacks, depression, insomnia and other mental diseases. Many thinkers and researchers believe that riots in various parts of the country are resultant of youth unemployment. That is also the reason why large numbers of young people seriously consider emigrating in order to search work. If the appropriate measures are not taken to overcome youth unemployment while being in parallel with global economic crunch, the social outcomes could be far drastic than now that could lead to unrest, chaos, social divide and rise in crimes and mental health disorders. Government initiatives to tackle the issue are inadequate and it needs channelized efforts from private and non-profit sector to study and analyse the causes of youth unemployment in deep detail so that the coping mechanism may be established accordingly. The highest numbers of unemployed individuals are in North East region (10.3%) and in Yorkshire (8.4%) (Telegraph, 2014). Therefore these regions need to be prioritised as targeted geographic locations for the action. A non-profit organisation is proposed to design various activities according to categories of unemployment and the organisation will be completely dedicated to fight the issue. The domain of action will primarily include career guidance, counselling, skill training and micro-crediting. The scope of organisation will be expanded to other locations depending on success rate and funds base. Vision The vision of organisation is to help the neglected part of society and economy by guiding, counselling, training and aiding with micro funds to let them begin their entrepreneurial ventures and raise themselves at their own. Broader perspective of the vision is create a socially and economically equitable society and to contribute towards economic growth of the country. Young unemployed people especially unemployed graduates will be targeted in highly crime affected and socially deprived locations i.e. North East and Yorkshire. Objectives Core mission of the organisation is to deal with growing unemployment and its effects like distress, economic strain, societal divide, etc. Keeping in view the set mission, following objectives will be in view for further action and strategies: To guide people about job acquiring, skill shortages, etc To train unskilled people with highly demanded skills To generate and share entrepreneurship ideas To aid young people with small funds for initiating their own businesses To liason with different organisations in order to place graduates as internees To grow funds base to expand scope of organisation Stakeholders Analysis Primary stakeholders of the solution are discussed below: Management of Organisation Entire program to cope the issue will be designed and carried out by the management of the organisation; hence management will be the foremost important stakeholder in the process. As the funds will be acquired through external means, therefore management will be accountable for each of the step taken and even minute financial transactions as well. Unemployed Youth Unemployed young people are the focal stakeholders for whole program and they are the cause of creating organisation. Hence they are the real audience and highest beneficiary of the proposed program. However targeted locations are limited and are 2 regions are nominated at initial level. Donors Funds will be acquired through external means from individuals as well as business organisations and humanitarian bodies in order to conduct training programs, workshops and for creating micro loan schemes. Donors will also be the stakeholders as their concern will be about fair utility of the donated funds. Society Overall society is sole beneficiary of the program and is a vital stakeholder. Therefore society will be expected to cooperate and stand with the program through their contributions like donations, volunteering, etc and the outcome of programs should have a positive influence over the society. Government The program is more or less assistance to the government as it will lessen their burden and government will be positively affected. However government agencies are responsible to track the financial record and spending of the organisation and it needs to facilitate the organisation in carrying out the processes. Activities Proposed activities to accomplish objective of coping youth unemployment are detailed as follows: Research There is a need to assess and analyse several external and internal factors in order to maximise the utility of proposed program. Thus first activity is to carry out primary and secondary research related to the issue and the research outcomes are then integrated into the plan to effectively address the objectives. The research will focus on statistically determining the causes of unemployment, categories of unemployment and the negative repercussions so that the targeted locations will be further narrowed down to aim at rescuing the most affected category of unemployed people. Micro Crediting Structure This will be the core activity to develop a comprehensive structure of micro crediting in order to self employ the young people who will then employ others by expanding their businesses. The small scale loans will be provided based on short listed entrepreneurial proposals and educated people will be preferred in the process. Repayment structure will be provided along with nominal service fee while the initiated projects will be periodically assessed and assisted so that the recovery of loans remains smooth and the process continues and expands its horizon to help maximum people. Counselling Most of people do not know about their career, goals and objectives and they stray here and there to find work but in vain. This is due to lack of guidance and appropriate skills that hamper their career. Counselling will be provided to individuals and groups and the main purpose will be to help them recognise their potential and acquire right skills to market themselves for the job. Certain research tools will be applied to learn about the aptitude of people and then they will be guided to learn particular modules and skills accordingly. Graduate unemployed will also be catered in the process and will be helped in similar way. Training and Development Unemployed people will be categorised like unskilled, semi skilled and graduated people and they will be provided with appropriate training. Graduated people will be assisted with further short term courses like communication, relevant software training, marketing skills, etc. A small scale vocational centre will also be created to train the unskilled and semi skilled people. A list of highly demanded skills will be developed and those skills will be provided to the people. Industrial linkages will also be developed and the trained manpower will be provided with opportunities to acquire jobs. Funds Acquisition As the organisation is non-government and much of funds are required to provide training, conduct workshops and provide loans to the potential entrepreneurs, hence the foundation of all activities will be the acquisition of funds. Dearth of funds will result in slow down of all the activities. For the purpose, giant corporations will be targeted at first and they will be proposed with objectives and projects of the organisation so as to acquire donation under their corporate social responsibility programs. Some of banks, government institutions and international and local donor agencies will also be contacted with the project proposals to acquire funds. Individuals like renowned philanthropists will also be approached for the purpose. Monitoring and Evaluation This is the cap of all activities and the purpose will be to assure continuous performance, progress and transparency in all processes. Each of activity will be monitored to make sure that the set benchmarks and principles are abided by the team of organisation. All activities will be periodically evaluated against the objectives defined for each activity and lagging activities will be reinforced with alternative strategies if required. Non-profit Organisational Setup The proposed setup for the organisation is non-profit rather than private organisation because the sole purpose of the organisation is to serve the public that is suffering from unemployment. There is no pursuit of profit making for owners of the organisation. Following are few factors that discuss further the need of non-profit organisation: Public Issue Unemployment is a public issue and the government has to take initiatives to cope the issue and if the government measures are inadequate then non-profit organisation can aid to address the problem whereas the private organisations are only meant to reap profits on their investments and they keep a nominal portion as a contribution towards public issue. Hence a completely dedicated organisational setup is required to attain fruitful results and an NGO is the most appropriate for of organisation for the purpose. Public Funds In order to address a public issue, the need is to have adequate funds that a single entity or individual cannot provide on regular basis. Thus funding resources may vary from certain individuals to different donor agencies and public funds and those resources can be legally acquired if the organisation is a non-profit organisation like a trust, charity or social welfare organisation. Social Responsibility Non-profit organisations aim to operate in response to the social issues and to give channelized contribution towards the society. Non-profit organisational setup is preferred because the mission is purely social, public and not for profit. Private organisations need return on investment and opportunity cost of their dedicated time which can never suit for such a philanthropic cause. Pros and Cons Advantages and disadvantages are discussed below in order to position the company: Advantages Following are advantages of the proposed organisation by keeping in view the stakeholders, environment and the activities: Self Employment Unemployed youth of the targeted locations will be the greatest beneficiary of the organisation and self employed people will be the tangible advantage of the organisation that will act as a chain reaction for long term benefits. Skilled Manpower As a result of the proposed activities, industries will have skilled manpower and shortage of skills for the industries will be reduced while the people will get job as well. Internal Employment Many people will be hired to run the proposed organisation like managers, internees, volunteers, project workers, etc which will add to the cause of raising employment. Flexibility As the organisation is non-profit, hence it has ultimate flexibility in formulating strategies and approaching the issues according to local situation and similarly sectored projects can be designed. Innovation The organisation can innovate its internal processes as well as activities and the projects as it will find least intervention from any external source. Tailored Assistance The organisation will grasp in depth situation analysis and will design the projects accordingly. Hence this is one of the biggest advantages of the organisation that it could tailor its services as and when required. Least Hiring Restrictions The organisation will be able to hire experts and professional without any restrictions unlike government sector organisations and ultimately the organisation will have high level of professionalism. Disadvantages Some prominent disadvantages of the organisation and its activities are discussed below: Geographic Restriction The organisation is proposed to target two locations (North East and Yorkshire) and even these locations will not be entirely covered. Hence the operations of organisation will be limited. Reduced Replication The ideas generated by the organisation cannot be replicated in other locations due to difference in situations and other factors. Limited Resources Own resources of the organisation will be limited and most of dependence will be upon the external resources which are not easy to acquire. Organisational Structure The proposed organisation will be decentralised and the staff will be given autonomy to make decisions. Organisational structure will not be complex and strictly hierarchical rather it will be flat. Following is organisational chart to reveal the proposed structure of the organisation: Director will be responsible to monitor four managers while managers will be autonomous to make operational and tactical decisions. Strategies will be developed by the managers in consent with the director. Career Dev manager will hire trainers on casual basis as and when required. Board will conduct periodic meetings in order to evaluate performance of the functions and lapsed areas will be reinforced and focused with high attention. Implementation Issue Few tools of internal and external assessment of the organisation are applied below to find the potential implementation issues that the organisation could face: SWOT Analysis Strengths The major strengths of the organisation include expert human resource, unique ideas, distinct and autonomous projects and flexible approach to cope the problem according to situation. Weaknesses External financial dependence is the greatest weakness of the organisation. More, geographically restricted operations and lagging resources are also the weaknesses that organisation has to deal. Opportunities The opportunities include good repute, expansion of organisation after successful launch and financial strength that will potentially be achieved after attaining positive results. Threats The threats include cut of financial aid, potential intervention of government in the projects and lagging objectives due to limited resources in external environment. PESTLE Analysis Political Political support can be found from the local government of the operating areas as it will be a kind of assistance to their goals of benefiting the public at large while probability of negative political intervention is very low. Economic The chosen social issue is mainly based on declined economic situation and economic scenario is supportive of the idea; however funds generation is hard economic times is quite difficult and government aid is not much expected. Social Socially the ideas ad core of the proposed organisation will be supported as the issue of unemployment is recurring and has several negative outcomes over the society. Technological Technological integration like utilising information system and other certain tools to manage the functions effectively has net positive impact which will lower the administrative cost and will increase efficiency. Legal The organisation needs to be registered with the relevant authority of social welfare while there is no as such legal hurdle that can interrupt the projects; however micro crediting is legally a complex thing to deal and needs much care and attention. Environmental Due to negative outcomes of unemployment and stagnant economy, external environment becomes supportive of the ideas of proposed organisation. Above analysis reveals that overall implementation issues can arise mainly due to the financial constraints as the organisation does not have any resources of its own rather it has to chiefly depend upon the donor individuals and agencies. Second, the organisation can face legal complications due to micro crediting project as it requires legal guarantees, recovery of amount, etc. Strategies Strategies related to finance and human resources are briefly discussed as follows: Financial Strategies Financial sustainability of the organisation is core aim of the financial strategy; hence the organisation needs to refrain from depending upon few funds resources. Rather the organisation has to develop strong relationship with the existing and potential donors and to widen the scope by approaching maximum number of donors. Creation of endowment fund to cover regular and administrative expenses is required and it will also help to hedge against inflation and to deal with time value of money. Second, overheads need to be strategically calculated and managed. Financial reserves are required to build for improved and continuous performance while risk has to be analysed and managed for potential draw down situation. Rigorous funds raising events will be helpful to attain the financial goals of the organisation. Human Resource Strategies Usually NGOs have casual staff but the proposed organisation will endeavour to develop and retain the staff for long term. Experts will be hired to deal with liasoning and micro crediting as this would help to build relationship with the donors, industries and the rest of stakeholders including unemployed people. Performance evaluation and rewards and reinforcements will also be the part of HR policy of the organisation. Conclusion Consequently, the proposed organisation has to deal with several challenges in order to track towards achieving its set objectives. Strong financial foundation of the organisation and long termed fund management and sustainable resource building is the most important thing to be done at first instance. Strong ties with industries, giant companies and local and international donors will help to positively position the organisation and it will also help to replicate the ideas at other locations where the need of such measures is high. References Statista, (2014). United Kingdom - Unemployment rate 2014 | Statistic. [online] Available at: http://www.statista.com/statistics/263709/unemployment-rate-in-the-united-kingdom/ [Accessed 26 Nov. 2014]. Telegraph.co.uk, (2014). Unemployment in the UK: regional breakdown - Telegraph. [online] Available at: http://www.telegraph.co.uk/news/politics/10589129/Unemployment-in-the-UK-regional-breakdown.html [Accessed 26 Nov. 2014]. Read More