The Rise of the Not-for-Profit Organisations

Amassing material wealth is the main purpose of most businesses. Government regulations and customers’ concerns may act to temper the way in which this profit is made but the bottom-line is the only figure of any note. However, this is not the only way to conduct business; the not-for-profit sector is on the rise providing an alternative to the existing business model.

 

There are a myriad of not-for-profit organisations operating in the UK today, including charities, community groups and voluntary organisations; a description that covers a wide range of entities ranging from small neighbourhood groups to large voluntary agencies. It also includes social enterprises, which can operate as businesses, but with primarily social objectives and a commitment to reinvest back into the business or into the community.

 

And, of course, many of these not-for-profit organisations form part of the voluntary sector, concentrating more on creating social wealth than just profit. According to the NCVO’s UK Civil Society Almanac there are over 160,000 voluntary organisations in the UK. The total income for this sector is in the region of £39.2 billion. However, the majority of voluntary organisations are small with an annual income of no more than £10,000. It is the top one percent that owns 73% of this sector’s assets; a staggering £70.2 billion.

 

Nevertheless people are the most important asset for any not-for-profit organisation, as employees, volunteers, donors and users. In 2012 there were 800,000 people in paid employment in this sector, of which 64% were employed full-time, and 66% of whom were women. Millions of people also volunteer their time; 28% of the UK population formally volunteer at least once a month.

 

The wide range of activities undertaken by not-for-profit organisations creates a vast and varied tapestry of organisational types; scout groups rub shoulders with arts centres, and medical charities operate alongside housing associations, making it difficult to generalise. The ways in which many of these organisations are funded also differ. For example, members’ subscriptions will help pay for scout outings and donations will help fund medical research. Charities are expanding the ways in which they generate income. New technologies offer a wide range of opportunities with social media and mobile technology effective tools with which to target a younger audience.

 

Authors Donnie Macluran and Jennifer Hinton in their recent book ‘How on Earth: Flourishing in a Not-for-Profit World by 2050’ argue that the emergence of a formal not-for-profit economy is underway. People are moving away from the for-profit model and embracing the alternative. Thriving not-for-profit organisations, such as the Youth Hostel Association and the Big Issue, have shown that it is possible to be a successful business, a good employer and still remain true to core beliefs.

 

The not-for-profit sector is varied and complex; it has a wide range of organisations with many different aims and objectives. One common thread runs through them all, however; they are motivated by purpose rather than profit and each in their own way wish to make a difference.

 

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