Non-profit Organizations and Non-governmental Organizations - Research Paper Example

Non-profit Organizations and Non-governmental Organizations Abstract A Non-governmental Organization or non-profit organization is any non-profit making group that addresses matters in support of public good. Non-governmental organizations are sponsored by governmental agencies, individuals, corporations and international agencies like the World Bank. Non-governmental organizations can be constituted at an international, national and local level. Most charitable projects in the world are executed by Non-governmental organizations. Some of these projects address critical issues such as the environment and health. Non-governmental organizations are legally composed entities that function independent of the government. Contrary to for-profit organizations and governmental agencies, non-governmental organizations are governed, taxed and organized differently. Non-profit organizations are private sector entities designed to deliver public goods. Non-profit entities differ from for-profit organizations because they cannot legislate or tax. Non-profit organizations also differ from for-profit entities in private sector because the sole purpose for their existence is mission fulfillment. The governance of a non-profit organization is constituted of a board of directors or, in case of a trust or another charitable organization a board of trustees. Due to their tax exempt status and their ability to obtain tax-deductible funding from the tax payer, all non-profit organizations should be readily accountable to the public. Therefore, non-profit organizations and non-governmental organizations perform duties that governments over the world are otherwise routinely obliged to attend to. Keywords: Non-profit Organization, Non-governmental Organization, Non-profit Leaders, Succession Planning, Funding, Operational Challenges. Non-profit Leadership Succession Planning Succession planning is a vital tool in managing the human resource in any organization leadership, NGO’s and NPO’s are not exempt from this rule. Policy makers and activists have been fascinated by the constant rise of Non-governmental organizations in recent years. In recent decades, NPO’s and NGO’s are managed better than they used to be. One inducement of improved management is the availability of secure sources of revenue. The roles of leaders in non-profit organizations include setting directions, planning, objectives, organizing and mobilizing resources to change plans into action (Bunchapattanasakda, Wiriyakosol, & Ya-anan, 2012). Whether in for-profit or non-profit sector, all organizations basically require strong leadership talent to execute their strategy effectively. Hence, ensuring a constant supply of leaders is essential and is not simple task (Crawford, 2010). The world is filled with leaders who are passionate about cause and are interested in making a difference. Such energy is the immeasurable equivalent of the non-profit organizations, and the reason the non-profit sector continues to grow constantly. However, not all tales of good work and passion have a happy ending. Akin to small businesses, numerous non-profit organizations die with their founders fading interest or energy. In addition, more established non-profit organizations stumble and die quickly; due to laxity in establishing their leadership succession plans and committing investment on leader development (Tom Adams). Currently, there is scarcity of ready and willing non-profit leaders. Non-profit-organizations are also urged to focus their search activities towards nurturing leaders who are equipped to confront current and emerging challenges. Factors such as changes in public policy, client demographic shifts, and competition from for-profit providers have put the nonprofits capacity to offer its services under immense pressure. This intricate environment is limiting the skills and capacities of nonprofit leaders to meet such demands. However, the non-profits have responded swiftly in such scenarios. The non-profits future dictates a strong sense of obligation to nurturing and developing leaders the sector requires. Non-profits organizations also have to train and mentor their staff internally in future, so as to build necessary capacity. Non-profits have to consider adopting a relay succession model which is effective. In this model the outgoing leader nurtures successor(s) to ensure efficient leadership succession (Crawford, 2010). Non-profit Leaders Profile The most desirable trait of a non-profit leader is the ability to effectively and promptly establish the organizations priorities. Other desirable attributes of the non-profit leader include: strategic thinking, relationship building, good decision-making, entrepreneurial achievement, good communication, change leadership, motivation, high integrity, patience, interpersonal sensitivity, passionate about the mission, financial acumen, non-profit sector-specific knowledge, valuing diversity (Crawford, 2010). Talent Constraint In future, there will be an overwhelming number of vacant non-profit, executive positions. The obvious question is: Can the next generation produce enough leaders to bridge the looming non-profit leadership gap? Furthermore, the non-profit sector does not invest time or resources in producing its own leaders. Currently, one third of new non-profit leaders come from within the organization in the nonprofit sector. In contrast, 60 percent of new non-profit leaders are promoted from within in the for-profit sector. Many young non-profit leaders allude to the low wage, long hours and hectic work-life balance as reasons they don’t find current non-profit leadership vacancies attractive. Consequently, most young non-profit leaders lose interest in non-profit leadership responsibilities in the non-profit sector (Crawford, 2010). Strategic Challenges Shaping Non-profit Sector Priorities Strategic challenges that accost the non-profit sector can be grouped into three: competition challenges, financial challenges and operational effectiveness challenges (Crawford, 2010). Financial Challenge. The recent global economic crisis is expected to result in government debts which could in turn result in new cutbacks in health, education, and social service funding. There is consensus among non-profit leaders, that economic recovery is far-off than anticipated. Furthermore, when economic recovery begins, a return of normal levels of funding is unexpected. Consequently, nonprofit leaders may have to address these priorities (Crawford, 2010). Leading the Organization to Financial Stability. Definitely, the non-profit sector is not immune to occurrences in the broader economy and non-profit leaders must become acquainted with market and business trends. However, the ratification of for-profit sector routines and attitudes is antagonistic. Certain nonprofit organizations will have to strive to act as the testing ground for new growth ideas. Ratification of an entrepreneurial style of management is vital for the operations and survival of non-profit sector entities (Crawford, 2010). Culture of Financial Awareness. A non-profit leader with inadequate financial knowledge cannot make use of such information or make financial decisions to guide the non-profit organization. Thus in order to ensure secure financial future of non-profit organizations, there is need for a non-profit leader to understand financial information. A non-profit leader needs to decipher how numbers are produced, how they impose implications on decisions and how they affect the vision of the organization. Establishing a custom of financial understanding also needs initiating debates and open sharing of information (Crawford, 2010). Leading the Diversification. The need for non-profit leaders to be good financial managers is critical. In addition to that, non-profit leaders should mobilize people around novel financial truths. Non-profit leaders ought to have deep expertise of non-profit sector to be able mobilize resources and create new services with limited funds. Hence, there is need for non profits to diversify their source of funding. Non-profits must also exhibit financial prudence and adapt their organizations to manage more with less. Financial challenges demand insight, requiring leaders to consider the implications for the core mission (Crawford, 2010). Competition Challenge. More for-profit organizations are in competition with the nonprofit sector for government aid, donations and grants. There is mounting competitive pressure for already insufficient funding and charitable giving opportunities. The situation is compounded by cognizance that a number of nonprofits are competing for the same insufficient funds (Crawford, 2010). Increasing Social Reach. Several non-profit sector leaders have expressed concern that the sector urgently needs to find ways to raise awareness of what the sector offers. Non-profit leaders have also expressed serious concern that when consultations are needed, the government consults the non-profit sector as a second thought and that the non-profit sector’s function in key societal decisions is less important. Communicating in a manner that is motivating and inspiring is particularly vital for non-profit executives as a means for positioning a cause (Crawford, 2010). Building Technological Capacity. Enhancing technological capacity of a non-profit organization broadens its ability to compete. It calls upon a non-profit leader to learn something he/she would not normally know. There is also need for a non-profit leader to exhibit openness in learning and to understanding the potential of these technological trends. In addition to that, build the talent capacity and infrastructure to support that cause (Crawford, 2010). Operational Challenge. In light of the economic crisis, non-profit leaders are feeling the pressure to improve governance in their own organizations. Pressure to enhance governance and accountability has continued to pile up in for-profit and non-profit sectors. Also when working as directors on non-profits boards, business leaders are pressing for transparency and accountability. Unfortunately, the performance of boards is frequently known to fall short. In addition to that, the environment in which non-profits operate today is different. However, many organizations still operate in the same way they did years ago. Operational constraints can result to the setting of at least three possible leadership priorities (Crawford, 2010). Enhancing Transparency to Improve Governance. Pressure is growing on non-profit leaders to design systems and processes that produce strategic measurements and information. Non-profit leaders must therefore adopt systems that strengthen compliance and reduce resistance (Crawford, 2010). Restructuring the Non-profit Organization. Non-profits should ask fundamentally different questions instead of the ones based on old nonprofit models or private-sector models. Unique ways of structuring and operating non-profit organizations are a critical priority to non-profit leaders. The adoption of new volunteering models, enhancing operational efficacy and changing service offerings to support more people with limited resources can be considered. Structures such as networked organizations and co-directorships should also be considered. Decision-making is inclusive in such structures, good ideas are given priority and decisions are made faster (Crawford, 2010). Enhancing Alignment and Partnership with the Board. For a non-profit leader to ensure good interaction with the non-profit board, one must be aware of the needs of board members, keep the board informed of trends and unexpected occurrences and provide routine financial and program service data. Efficient non-profit leadership requires the non-profit CEO to view the board as central to his or her work. A complex board- non-profit CEO relationship leads to more non-profit leaders facing challenges in determining how to work with a board. A few non-profit leaders have the experience of being on a board, but few are adequately prepared for the politics of engaging, building and reporting to a board. Mastering this skill is important to a non-profit CEO’s success (Crawford, 2010). Non-profit executives also shape the direction of decisions without making decisions unilaterally and arbitrarily. They also have to handle conflicts, arbitrate over resource allocations, network strongly with their boards and demonstrate a political acumen, and interpersonal skills. These boundary-spanning activities are part of the non-profit leader role, which is crucial for the organization to operate swiftly. A strong Board-CEO partnership is evidenced by: Role clarity with definitive same expectations, good communication, confidence in the non-profit CEO as a credible leader and consensus in style and philosophy of handling operational issues (Crawford, 2010). Cleaver’s (2010) study also found the following: There is a discussion that needs to be happening between those that are leading non-profits now and those that want to lead the non-profits in the future. Here at the YNPN Annual Conference, it seemed that almost everyone is aware that these conversations are happening, but they are happening separately. Next generation a leadership talks about it and so does the current leadership, but the conversations are not crossing between different generations. The society does not recognize the tremendous impact of the successes of the nonprofits. When we put people back to work, give young people better education, when we feed and house people, we are not only helping people, but we are helping society. The more people working, the better financial situation a community will be in. When people have food and housing, they can focus on their other needs. I am afraid that some of the nonprofit sector is making this same mistake. We are so focused on our own missions, that we are forgetting the impact that our fellow nonprofit organizations have on us. Nonprofits are afraid to invest in younger staff because the likelihood is that the younger staff person will leave. But better leadership in the nonprofit sector benefits the entire sector, not just a particular organization. Better education will ultimately equal a smaller need in employment, food and housing assistance. People that have jobs will be better equipped to afford taking care of their families. When one nonprofit is successful, we are all impacted in a positive way. If the leadership gap projects are accurate, we will need both the next generation and the current generation of leadership to work together to ensure a viable and productive nonprofit sector for the future. Our communities will need one, and they deserve to have one. Of course, if the leadership gap projects are accurate, we will need both the next generation and the current generation of leadership to work together to ensure a viable and productive nonprofit sector for the future. Our communities will need one, and they deserve to have one. Of course, if the leadership gap projects are accurate, we will need both the next generation and the current generation of leadership to work together to ensure a viable and productive nonprofit sector for the future. Our communities will need one, and they deserve to have one. Reference List Adams, T. (2010). The Nonprofit Leadership Transition and Development Guide: Proven Paths for Leaders and Organizations. San Francisco, CA: Transition guides Inc. Agard, K. A. (2011) Leadership in Nonprofit Organizations: A Reference Handbook, Volume 1. California: Sage publications, Inc. Baur, D. (2011). NGOs as Legitimate Partners of Corporations: A Political Conceptualization. New York. Springer science media. Bunchapattanasakda, C., Wiriyakosol, S. & Ya-anan, M. (2012). Leadership Roles on Employee Retaining Practice in NGO’s: Case of Thailand. International Journal of Business and Social Science, Vol.3.Retrieved from www.ijbssnet.com/journals/Vol_3_No_8_Special_Issue_April. Cleaver, K. (2010, April 24). That Leadership Gap We Talk About. Retrieved from http://ynpn.org/blog/nonprofit.../04/.../that-leadership-gap-we-talk-about Crawford, J. (2010). Profiling the Non-Profit Leader of Tomorrow. Ivey Business Journal. Retrieved from www.iveybusinessjournal.com/topics/leadership/profiling. Read More