Non-Profit Organizations

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Modern research shows that the development trends of non-profit sector in many countries are moving away from the conventional ideas of self-organization and mutual aid. Non-profit organizations are broadening the spectrum of their activities in such spheres as employment of people with special needs, support and social inclusion, and implementation of social innovations (Borzaga, Tortia 2010). Some researchers point out to a considerable growth of professionalization of civil associations, their marketization and bureaucratization. The changes are challenging the traditional concepts of civil self-organization and volunteering and bring us to the new concept of the non-profit sector (or the third sector). The modern concepts of the non-profit…show more content…
The characteristics of this process are as follows: the monopoly of the state in the sphere of social services gives way to market mechanisms; transformation of citizens role who take a part of social responsibilities and consume the services. In comparison with the notion of civil society, including the whole spectrum of civil initiatives – and also formally unregistered activeness of the citizens, the notion of the third sector is more specific. It is only limited by the formally registered civil organizations which are relatively independent from the state, mainly thanks to participation of the volunteers whose purpose is not profit but socially useful activity. Volunteering is an important part of the nonprofit sector, as it does not only ensure the legitimacy of the requirements and actions of the organizations, but also provides a more efficient use of nonmarket and nongovernmental mechanisms of the commonwealth production, for example corporate volunteering and other forms of mutually beneficial cooperation of the…show more content…
The non-profit organizations exist so that they could decrease the transaction costs in the market conditions. For-profit market sector is always aimed at profit making, and not at satisfying the public interest, which might lead to so-called “contract failure” when a consumer cannot control the quality of services. This might be the case in childcare or in elderly care. Non-profit organizations are preferred here to for-profit ones, as the services are controlled by the citizens represented by volunteers, donors and caregivers (Borzaga, Tortia 2010: 21). Moreover, volunteer participation raised the level of trust in the organizations and the provided services. Social entrepreneurs and members of non-profit organizations often have homogenous interests and goals, which leads to higher effectiveness and lower transactional costs (Borzaga, Tortia 2010: 19). Some economists would contradict though that non-profits use their resources inefficiently and thus provide low quality services. This may be due to the fact that the non-profit sector includes professional organizations as well as those which are not trying to compete with the market or state ones. In general, the new economic theory is giving non-profit organizations a very specific place on the

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