Analysis of Nonprofit Organization in US - Assignment Example

?Analysis of nonprofit organization in US Part One (Word Count 726) Non-profit organizations have become important in the society. There are many people who do not have access to basic needs and have to get some of them through the non-profit organizations. In this case, it would be expected that the non-profit organizations would be located in regions where poor people are concentrated. However, this is not the case as many non-profit organizations are found in regions where there are no poor people. In fact, as Hasenfeld et al found out, there are very few non-profit organizations in the poor neighborhoods of Los Angeles (15). At the same time, the income for the non-profits in the poor neighborhoods was relatively little. The average income for these organizations was approximately 430, 000 dollars, which is about half of the average income for the non-profits in Los Angeles county. It is interesting that most of the non-profits in the poor backgrounds have white board members, despite the fact that they are mostly in African American backgrounds. It is therefore evident that the non-profits in the poor backgrounds are ethnically diverse compared to those in well up regions, which are likely to have one to a maximum of three ethnic groups. The organizations in the poor backgrounds are more likely to be involved in activities for improving the society compared to those in the high income neighborhoods (Hasenfeld 6). Most people in the poor backgrounds are in need of many things. In fact, some do not even have places to sleep or food. On the contrary, the non-profits in the middle and wealthy backgrounds do not even have work to do. Most people in those neighborhoods are well up and can cater for most of their needs without any assistance. In fact, the people in these neighborhoods are the ones who contribute money that go towards assisting the poor including those in the other side of town; the poor. While the non-profit organizations in the poor backgrounds depend solely on private donations and government assistance, the non-profits in the well up regions depend on sophisticated systems of making money including investments. In this case, when there are economic slowdowns and recession, the non-profits in the poor vulnerable neighborhoods are likely to experience financial challenges and even close. On the other hand, the non-profits in the wealthy regions do not even seem affected by the economic slowdowns at all. In fact, there are many non-profits that serve the poor African Americans that have been closed because of this (Hasenfeld 7). The remarkably growth of the non-profits especially those in the wealthy backgrounds has raised a lot of concern to many people. While other sectors of the economy and the government are struggling to meet their needs, the non-profits are doing extremely well even in recession. While the employment rate in government institutions increased by 8%, business sector decreased by 6%; the non-profit sector increased by 17% between 2000 and 2010. Wage increased by 23% for government institutions, decreased by 1% in the business sector and increased by 29% for the non-profits (Roeger, Blackwood and Pettijohn 1). It can be deduced that the non-profit organizations, especially from the wealthy regions, are out to make money rather than help the needy people in the society. In fact, there are very few people to be assisted in those backgrounds. Most of the revenue for the non-profits was from sales at receipts (Roeger, Blackwood and Pettijohn 2). It was also noted that the largest non-profit organizations had the largest spending yet very little charity work. Non-profits with more than 10, million dollars worth spent more than 85% of the money and gave out only 4% to charity. On the contrary, the small non-profit organizations, worth 100,000 dollars or less, gave 45% of their money to charity. Those in the range of between 100,000 and 500,000 dollars gave about 29% of the money to charity (Roeger, Blackwood and Pettijohn 2). When non-profit organizations are looking for money, they can do practically anything to get more. Employees would be pressurized to work harder especially when the non-profit is in the process of getting funds to match a donation provided by a donor on condition of matching (Non-Profit Finance Fund 4). The board does not care whether there will be an imbalance in the organization as long as they get more money for their work (Miller 2). Part Two (Word Count 736) The remarkable growth of the non-profit organizations is of interest. This is thought to be the effect of the government policy towards the non-profit organizations. Non-profit organizations are exempted from taxation in the United States and across the world. However, some of these organizations have gone against the law. They are involved in profitable business. As stated above, most of the revenue of most non-profit organizations is from sales and receipts. Under the law, non-profit organizations should be exempted from taxation as long as they do not engage in other activities. In the case they engage in business activities, taxation should be applied on the side business. On the contrary, the non-profit organizations especially the large ones are involved in business of some sort. At the same time, they have board of directors and shareholders which should not be the case. The government is unable to track this clearly. Information from the non-profit organizations is concealed to some extent. At the same time, these organizations are involved in charity to some extent making it a challenge for the government to determine the taxation to be applied (Senate Committee on Finance 7). Another factor that has increased the number of non-profit organizations is private contribution. The world has been changing rapidly and the number of the middle class and the wealthy has also increased. Most of the people think that contributing to help the poor is a good idea. In fact, this has become the tradition among many successful people. Giving to charity is driven by experience for example a person lacked something but they would not want anyone else in the society to lack, family and religious beliefs on helping the poor and legacy in which some people would like to be remembered for helping the poor (Rockefeller philanthropy advisor 7). The amount of donations towards these organizations has been increasing exponentially over the last decades. Donations amounted to about 70 billion dollars in 1963 and have increased to about 240 billion dollars as of 2008. Donations currently account for about 2.2% of the national gross domestic product in the United States. Individual donations accounted an average of 3.4% of individual income (Congress of the United States, Congressional budget office 10). With this rate, the number of non-profit organizations in the future will be very many. It is unfortunate that some people are looking forward to starting such organizations for their own benefit rather than the poor. The society is cautioned about contributing to the non-profit organizations. Not that it is bad but to ensure their money serves the purpose they envisioned (Rockefeller philanthropy advisor 9). With these developments, the non-profit organizations should be put to task. The government can implement reforms in the sector to ensure that these organizations are accountable for what they do. The non-profit organizations should be served with restrictions on what they can do and what they cannot do. For example, there are some non-profit organizations which are involved in politics. This is a conflict of interest as it may affect the assistance of the people in need in some regions. If the non-profit organizations do not follow the rules, like the current case scenario, they should be forced to close and money collected distributed to non-profit organizations that have been doing their work. At the same time, a clear method for determining the activities these institutions engage in should be drafted. In addition, the government should continue supporting charity as it has always done (Congress of the United States, Congressional budget office 11). Currently, individuals are allowed to contribute to charity and can benefit from tax exempts for this. The reforms that have been proposed to continue supporting charitable activities should be implemented. After all, there are many people in need in the United States and across the world. However, the government should plan carefully for this as it may have an effect on taxation revenues and individual donations. The sustainable plan would one that encourages charitable donations and at the same time ensures the government makes enough revenues for other economic projects. Current charitable tax concerns should also be addressed by the government to ensure that the plan works accordingly (Congress of the United States, Congressional budget office 13). This plan would allow the needy people in the society to be assisted and revenues would be in check while encouraging those in a position to contribute to do so. Part Three (Word Count 717) Helping the needy is a good venture especially to the very needy. Assisting these people can be done from different perspectives. It is important to consider many factors when establishing a non-profit or profit organization to help the needy. One of the things that have to be looked at is sustainability. In this case, an organization has to look at the coming days. Circumstances change and so does the economy. If an organization is very dependent on donors, the amount of donations during times of economic slow down and recession could decline significantly affecting the objectives and goals of an organization. As such, it is important to assume that these cases can happen and come up with sustainable work plan. In my case, I would prefer to work out a hybrid organization that complies with all regulations including taxation. Having received 5 million dollars, the first thing would be to come up with a proper working plan. My plan would be focused on helping the poor in a different way. The working mission would be to give the man a fishing rod rather than food for today. In this case, the people to be supported would have to form groups and come up with projects they can do for profit. They would be required to come up with a business plan. If they do not know how to make one, we would assist them in making a workable business plan. It is important to note that some of the people may not have good business management skills. In this case, seminars on training the people on how to run a business would be organized. In the seminars, the guiding experts would establish the strengths and weaknesses of each individual to assign roles within the group. The requirement for each group is to come up with a business that can generate enough profits for each individual in the group to benefit. Each person in the groups would be required to make a certain contribution to the company established every month or every time they make a sale. Establishing an institution with the sole purpose of assisting people this way would be important. However, this plan can work perfectly well with an established organization, if they have the same objective. For this particular project, a community based organization would be the most appropriate. The organization would start with one community and with success, it can continue to other needy communities within a given jurisdiction. Such an organization cannot be operated by a single person. In this case, a board would be appointed to assist in running the organization and making important decisions. The advantage of this model is that it would be helping people continuously and there is no single time when there will be no money to assists people. After all, the businesses established would be making money and the individuals would be taught to invest, diversify and save whatever they earn. In addition, needy individuals would be assisted regardless of their area of need. Some people may be looking for funding to get their children through college while others would be looking for a place to live in or food. That is somehow discriminatory and some people may end up not being assisted especially if they cannot get specific institutions to assist. At the same time, people will be empowered which is much better than assisting a person from time to time. Involving people in projects would also be important in tapping into their strengths. With this project, needy individuals would be assisted only once or twice financially; during the initial stages. Once they start contributing after their business is into profits, the money collected would be used to assist other people in the society. This would be more or less like a revolving fund. Accomplishing the objectives of this project needs the involvement of many people and institutions. Business experts, education institutions, marketing companies and potential buyers for the products and services provided by the groups would have to be involved in the project. The government may be involved to assist in some areas like taxation and compliance. Cooperation among these stakeholders would ensure the success of the groups’ businesses and the community organization. Those employed in the organization would be paid using the contributions made. Works Cited Congress of the United States, Congressional budget office. Options for Changing the Tax Treatment of Charitable Giving. May 2011. Web. 04 December 2013. http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/121xx/doc12167/charitablecontributions.pdf Hasenfeld, Yaheskel. Spread Thin: Human Services organizations in poor neighborhood. 2013. Web. 04 December 2013. http://civilsociety.ucla.edu/sites/default/files/publication-pdf/2013%20Report-web_copy_0.pdf Miller, Clara. Hidden in Plain Sight Understanding Nonprofit Capital Structure. 2003. Web. 04 December 2013. http://nonprofitfinancefund.org/files/docs/2010/NPQSpring03.pdf Non-profit finance fund. An introduction to non-profit capitalization. N.d. Web. 04 December 2013. http://nonprofitfinancefund.org/files/docs/2010/Linking_MissionWebVersion.pdf Rockefeller philanthropy advisor. Your Philanthropy roadmap. N.d. Web. 04 December 2013. Roeger, Katie., Blackwood Amy, and Pettijohn Sarah. The non-profit almanac 2012. 2012. Web. 04 December 2013. http://nccsdataweb.urban.org/NCCS/extracts/nonprofitalmanacflyerpdf.pdf Senate Committee on Finance. Tax-Exempt Organizations and Charitable Giving. N.d. Web. 04 December 2013. http://www.finance.senate.gov/issue/?id=046ec1ca-5a13-4dc2-83ee-30a92cafbd73 Read More