NON-PROFIT

ORGANISATION
 Meaning of a NPO
Not-for-Profit Organizations are organizations
which are set up for the welfare of the society or
for the promotion of art and culture in the society.
These are usually set up as a charitable institution
with the service motive. A non-profit organization
(NPO) is one which is not driven by profit but by
dedication to a given cause that is the target of all
income beyond what it takes to run the
organization.
Non profit organizations are organized for a
public or mutual benefit other than
generating profit for owners or investors
The trustees manage these organizations.
The Not-for-Profit Organizations raise funds
from its members as well as from the general
public for meeting their objectives.
Non-profit organizations are often used for
trusts, cooperatives, advocacy, charity,
environmental and religious groups.
 Characteristics of Not-for-Profit
Organizations
Service Motive: These organizations have a motive
to provide service to its members or a specific group or to
the general public. They provide services free of cost or at
a bare minimum price as their aim is not to earn the profit.
They do not discriminate among people.
Members: These organizations are formed as
charitable trusts or societies. The subscribers to these
organizations are their members.
Management: The managing committee or the
executive committee manages these organizations. The
members elect the committee.
Source of Income: The major sources of income of
not-for-profit organizations are subscriptions, donations,
government grants, legacies, income from investments,
etc.
Surplus: The surplus generated in the due course is
distributed among its members.
Reputation: These organizations earn their reputation
or goodwill on the basis of the good work done for the
welfare of the public.
Voluntary: One of the mandatory characteristic of a
NPO is that it is created voluntarily by its members to
provide service.
Principles Of
Non Profit
Organisation
Governance: A nonprofit’s board of directors is
responsible for developing, defining and reviewing the
organization’s mission and for providing overall leadership
and strategic direction to the organization. Boards are not
owners of the organization but are stewards of the
organization’s mission and resources.
Transparency and Accountability: Nonprofits have a
legal and ethical obligation to their constituents and the
public to conduct their activities with accountability and
transparency. Nonprofits should regularly and openly convey
information to the public about their mission, activities,
finances, accomplishments and decision-making processes.
Information from a nonprofit organization should be easily
accessible to the public. It should establish external visibility
and build public understanding and trust in the organization.
Financial Management: Non Profits have an obligation to
act as responsible stewards in managing their financial
resources. Nonprofits must comply with all legal and financial
requirements and should adhere to sound accounting
principles that produce reliable financial information, ensure
fiscal responsibility and build public trust. Nonprofits should
use their financial resources to accomplish their missions in
effective and efficient ways and should establish clear policies
and practices to regularly monitor how funds are used.
Fundraising: Non profits should conduct their fundraising
according to the highest ethical standards with regard to
solicitation, acceptance, recording, reporting and use of funds.
Nonprofits should adopt clear policies for fundraising
activities to ensure responsible use of funds and open,
transparent communication with contributors and other
constituents
Evaluation: Evaluation is a distinct process, different from
reporting to funders and other stakeholders. The evaluation
process allows nonprofits to increase the effectiveness and
efficiency of delivery of services. Each nonprofit should use
evaluation to measure the impact of its actions, assess how
those actions align with its mission, and act upon this
information.
Planning: Organizations should adopt clear strategic
priorities that can be acted upon, guide the organization’s
decision-making and are revisited regularly. Planning benefits
from participation from the breadth of the organization,
including stakeholder input (with particular attention to the
people served by the organization), assessments of operational
and competitive environments, and performance information on
the organization’s work.
Civic Engagement & Public Policy: Influencing public
decision-making is a critical and legal means for nonprofit organizations
to accomplish their missions. Open communication between
policymakers and constituents contributes to well-informed policies and
their effective implementation. To the highest extent possible, nonprofit
organizations should educate their community, provide opportunities to
deliberate on public policies, engage their constituents in advocacy
activities, and promote community interests.
Strategic Alliances: Sustaining a variety of nonprofit
organizations is positive and healthy for a community as it provides for a
wide-array of approaches, leadership opportunities, individual choices
and customization at the local level. strategic alliances can serve a
variety of purposes, including resource sharing, policy influence and
improved operational efficiency. While nonprofits operate in both
cooperative and competitive environments, strong relationships between
nonprofits can strengthen both the capacity of individual organizations
and the sector as a whole.
Volunteer Management: Volunteers’ ideas, energy
and ability to connect with others are crucial resources for
nonprofit organizations to perform their role in society.
Engaging volunteers is an essential part of the early stages
of the life cycle of many nonprofits and also builds the
capacity of nonprofits at any stage of the organization
cycle. Volunteers provide a critical connection between
nonprofits and their communities. They bring needed
skills, connections, insights and resources. They also serve
as valuable advocates and public relations ambassadors.
Nonprofits should assess the capacity of their organization
to engage, supervise and support volunteers with the
necessary level of attention, priority and resources before
recruiting volunteers.
Leadership and Organizational Culture: Nonprofit
leaders have a complex task, carrying out challenging
missions with limited resources and sometimes conflicting
demands, in the midst of constantly evolving networks of
organizational and personal relationships. Open and
interactive leadership practices and organizational cultures
strengthen the ability of nonprofits to interpret and adapt to
opportunities in this shifting environment and to make the
most effective use of the ideas and resources available in their
organizations, networks and communities. Nonprofit
organizations benefit from broad participation in important
discussions and decision-making. By engaging diverse groups
of people who care about the organization’s work and the
people it serves, from perspectives inside and outside the
organization, nonprofits are able to mobilize support, learn
from peers and respond to community concerns.
 Objectives of Non-
Profit Organizations
Nonprofit organizations exist mainly to provide help
or resources to a target audience with a specific
need. They usually serve a public purpose such as
enriching the lives of people in the community, and
enjoy special considerations in terms of tax, legal
status and accountability. A nonprofit organization is
mission-driven, which requires the management and
board to set objectives aimed at achieving the
organization’s stated mission.
 Strategic Objectives

A nonprofit organization’s strategic objectives focus on

the services provided to its target market. This requires
identifying the needs of the relevant community and
developing programs and projects geared at fulfilling
those needs.
For example, a nonprofit whose mission is to build
literacy skills among homeless children will have strategic
objectives such as the implementation of a program to
obtain and manage a supply of books, learning aids, space,
and an instructor.
 Financial Objectives

Nonprofits are not required to show financial surpluses,

but they need to generate enough income to cover their
costs and establish reserves for lean financial times.
Financial objectives include raising enough money to fund
the activities included in their strategic plan, as well as
fixed costs such as premises rental, staff compensation
and utility bills.
Nonprofits can generate income through fundraising
activities or revenue that results from services they
provide.
The primary objectives are to break even and maximize
cash flow, while avoiding excessive financial risk.
 Operational Objectives

The operational objectives of a nonprofit organization

relate to the management of funds and resources to
achieve specific tasks.
These objectives commonly show quantitative
performance measurements, such as the type and
frequency of activities and the number of people
served or helped.
The operational objectives include short-term dates for
the completion of individual projects and programs,
the resources used for each and the degree of success
that the organization wants to achieve.
 Governance Objectives

Nonprofit organizations are subject to stringent

governance requirements, mainly because they usually use
donor or grant funding to do their work. This makes them
accountable to their donors and the grant programs, as
well as to the public whose taxes go toward grant funding.
Governance objectives include the establishment of sound
policies for issues such as compensation, purchasing and
procurement, human resource and volunteer management
and asset and risk management.
 Partnership Objectives

Partnerships are vital aspects of nonprofit management,

with organizations using in-kind donations of much-
needed products and services.
For example, a nonprofit organization typically doesn’t
have enough money to advertise, so a partnership with a
local newspaper could benefit both parties. The nonprofit
gets free advertising, and the newspaper gets recognition
as a supporter of the organization’s work.
Partnership objectives identify the type of external parties
with which the organization could partner, and ensure that
potential partners’ principles and philosophy are in
accordance with the organization’s work.
 Objectives of Pope John Garden
1.For HIV Infected Children
To ensure care and protection to provide education
and employable skills which facilitate social
integration.

2.For Patients with Leprosy

To provide food and shelter removal of physical
social and psychological barriers promotion of social
integration.
 Objective of Positive Women Network

1. Organizing self-help and support groups

2. Counseling
3. Providing access to information and medicines
4. Developing models for generating income and creating
livelihoods among Women Living with HIV/AIDS (WLHA)
5. Organizing national consultations, public hearings,
projects and workshops
6. Forming regional networks of WLHA
7. Carrying out research on key issues affecting women and
children
 History Of
Non- Profit
Organisation
History of Non- Profit Sectors:
 The earliest reference to volunteerism can be found in
Rig Veda
The origin of the sector is deeply rooted in the religious
and cultural values of the country
Most works on the Indian non-profit sector acknowledge
the influence of religions on the emergence and shaping
of the sector, especially in the early phases.
“The history of the non-profit sector in India is marked
by the absence of any underlying theme or pattern to its
development” (PRIA, 2001b).
But the volunteer efforts were mostly unorganised till the
emergence of Buddhism during 600 BC. Buddhist Sanghas
were the earliest examples of organised philanthropy in
India (PRIA, 2001b). Later, Christianity and colonial rulers
brought in the modern notions of volunteerism and
philanthropy to India.
During the colonial era, many Swadeshi movements also
took form to organise social reform efforts in the society.
Gandhian movements, which continued to inspire many
generations of NPOs for several years, also entered the
scene.
The 90’s saw the emergence of new areas of non-profit
activities in the more globalised economy. Public advocacy,
environmental protection, human rights, gender issues etc
are some of the areas which have seen most growth in the
larger arena of non profit activity in the country.
  Some consider that the history of non-profit
sector in India can be divided in

 Pre-Colonial phase (1500 BC to late 18th century)

 Colonial Phase (late 18th century to 1947)
 Post independence (up to 1975)
 Post –emergency phase.
 Pre-colonial Phase (1500 BC to late 18th
century)
Charity was solely inspired by religious faiths and
values. Buddhist sanghas in this phase are widely
believed to be the earliest forms of organised voluntary
efforts in the country.
Colonial Phase (late 18th century to
1947).
The phase is closely linked to the social reforms and
freedom movement.
 Brahmo Samaj and Arya Samaj are some of the
examples of organisations of this mould. Education and
public health were also focal areas of growth in voluntary
action.
 Gandhiism and Gandhian principles hugely influenced
the setting up of most non-profit organisations in this
phase. Gandhi, himself set up his ashram at Sevagram in
Wardha.
Village industries, indigenous technologies and home-
grown models of education received from Gandhian
models of development.
 Post Independence

After independence, the state took upon itself the

most important role not only in the field of
development but also in the social and cultural lives of
the country.
Khadi movement, for example, became a government
programme under Khadi and Village Industries
Commission (KVIC). Education and health continued
to be important fields of voluntary action.
Christian missionary movement continued their work
in education and public health especially among the
central, eastern and north-eastern regions of the
country.
 Ramakrishna Mission also carried on with their
nongovernmental voluntary character.
These organisations although not NPOs by strict
definition of the term used for the study, are still
important milestones in the history of voluntary
action in India.
 Post Emergency.

State’s distrust of the non-profit sector became very

strong in this phase.
Foreign Contribution Regulation Act (FCRA), 1976
was enacted. Under this Act, all organisations receiving
foreign funds are required to be registered with home
ministry and get clearance from the government for all
foreign funds.
This phase also saw the increased infusion of foreign
funds. Government’s direct funding of the sector also
started in 80’s. All government-funds were channelled
through People’s Action for Development India
(PADI).
In 1986, it was amalgamated with CART (Council for
Advancement of Rural Technology) to form CAPART
(Council for Advancement of People’s Action and
Rural Technology).
Under CAPART, total funds channelled to the sector
increased. In the post emergency phase, association
between non-profit and government began to increase.
Post-globalisation, non-profit sector has expanded
itself to many areas especially in civil rights,
environmental protection, gender issues etc.