Good Governance in Not-for-Profit Organizations

This article discusses the importance of good governance in not-for-profit organizations and the challenges they face. It explores the roles and responsibilities of board members and the impact of donor dominance. The second reading highlights the dominance of elite powers in different sectors of not-for-profit organizations. Despite these challenges, not-for-profit organizations continue to work towards the welfare of the people.

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Name of the Student
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Author Note

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Not for profit organizations are organizations that are not profit driven. There are several not
for profit organization all over the world that have been established for the interest of public
and have been working successfully. Non- profit organizations work independently for the
benefits of people who are in need of it. The not for profit organizations do not work for the
profits for their own company rather they make sure enough money has been acquired in
order to support a cause that is detrimental in the society and work and make initiatives that
will help to overcome the problems for the betterment of the society. The primary and the
main aim of these organizations are to acquire donations and help the needy. However, the
not for profit organizations have not been able to work independently and have been
dominated by the powerful that make donations to these organizations that sometimes results
in bad governance.
Part 1
The heading of the first article is Governance for Good. This article is the Australian
Charities and Not for Profits Commission’s (ACNC) guide that has been outlined for
interested people who want to become the board members of the charity. The article
describes good governance of a charity and the importance. Good governance is when
charities have procedures and practices in the correct place that help the organization to work
openly and effectively and when the functioning of the responsibilities in the charity are
understood clearly. This article states the roles and responsibilities of ACNC that is to work
with the register organizations as charities, territory and state governments to develop a
reporting framework for the charities, maintain a searchable and free public register for
transparency so that people can seek any information about the registered charities, setting
long terms goals for the charity and ensure the goals are met, gather sufficient funding and
resources that will help to support charities. The article suggests that charity should be for
public benefits (acnc.gov.au, 2018). Here the responsibilities and the duties are laid down for

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the aspiring board members who want to work for ACNC. The first duty of the board
member is to act responsibly and be compassionate. The other is to maintain finances
efficiently (acnc.gov.au, 2018). The paper states and argues that it is important to maintain
and the rules bind the members of the board. The rules are a part of the evidence where
people can view the charity as a not for profit organization and understand the charitable
purpose of the organization. It is important to maintain transparency in order to ensure people
that the finance is being handled and used for the benefit of the public and not by the
organization. This article lays all the guidelines and the duties of a board member in order to
run a successful charity.
This second reading is an article where the poor governance of the not for profit
organizations are highlighted. The paper states that the organization will eventually evolve to
become workers cooperative. The donors and people who support the organization possess
rights over them that result in dominance. The boards are mainly comprised and composed by
the donors and the representatives of the donors (Glaeser 2002). This paper observes four
sectors that are different from each other. They are the museums, the hospitals, the church
and the universities.
In this article the author clearly states that the most of the nonprofit organizations have had a
significant growth because they were partly captured by the wealthy and powerful companies
or firms. This has paved way for the powerful companies to show dominance over the
nonprofit organizations. This article sheds a light on the transformation of donor controlled
institutions in art museums to institution where the curators have more power and dominance
over the art museums these days.
The paper states that the universities were initially dominated by the clergy and the donors. In
the early 90’s the high level administrators dominated the institutes (Glaeser 2002). After

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centuries it is seen that it is still the same only it has changed to elite administrators.
Universities are still dominated by the elite power that had negatively impacted the salaries of
the faculty.
In this article the author sheds a light on the operations of the hospitals in the early 19th
century where the aim of the hospitals was to cure the under privileged citizens of the
country. The authors also state that the managers and the trustees directly entered the
operations and in the functioning of the hospitals and donors had great importance in the
hospitals thus had control and power over the hospitals before.
The last part of the nonprofit organizations the article talks about is the churches. This states
the transformation of the Catholic Church from donors to workers. Previously the founders of
the church had dominance over the church and set up the policies of the church. This paper
states and gives examples of the nonprofit organizations and the dominance of the elite
organizations and power of them.
Part 2
The two readings are on the not for profit organizations. Both the readings suggest that the
aim and the purpose of the not for profit organizations are to ensure the benefits of the people
who are needy and lack the basic necessities and also how the organizations work
independently for public interest however both the papers state the different operations and
give an insight about the good and the bad governance of the not for profit organizations. .
The first reading suggests and portrays the good governance of the nonprofit organizations. It
gives a guideline on how to maintain a charity and how to achieve the goals of the
organization. It states how the charities and the nonprofit organizations are established for the
betterment of the public and the citizens. The duties and the responsibilities that the first
reading clearly states that the employees and the managers work for the public; it is an

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independent body that does not work for the profits of the organization but for the people.
However this paper contrasts with the second reading that states how the elite powers and
organizations have a control over the decisions of the nonprofit organizations and the
independent nonprofit organization is a myth. The paper provides examples of nonprofit
sectors like the church, the museum, hospital and the universities in order to show the reality
that how the donors of the organizations have dominance over these sectors because of the
contributions they make. The dominance of the elite power over the nonprofit organization is
evident in recent times as well. The first reading suggests how the operations of a charity
should be and how the managers need to fulfill the duties and responsibilities as suggested in
the paper to ensure the successful operations of the charitable organization to help meet the
organizational roles. The reading one suggests the importance of following rules and the
transparency of the charitable organization in order to make sure that the people can seek
information about the organizations and the works. The reading also states how the not for
profit organizations work independently to make sure the aims and the goals of the objectives
are met. However it contrasts with the second reading states how the elite power dominates
the nonprofit organizations because of their power and because of the contributions they
make to the organization where the organization has to bow down to them because of the
obligations and follow the rules and regulations that are set by the elite power rather than
following the duties and responsibilities of the organization and working independently. The
organizations have to take suggestions and the inputs that are put forth by the donors because
of the help and the contributions they provide that help in meeting the organizational goals.
With the examples provided in the second reading of the not for profit organizations like
universities, museums, churches and hospitals it shows that the dominance of the elite is still
prevalent in the society now because of their immense contribution for the upliftment of these
sectors. The reading one states and shows what the nonprofit organization should work like

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and the aim of the organization however the second reading reflects the harsh reality of the
nonprofit organizations.
The not for profit organizations have gained popularity and attention from people due to the
kind of work they aim and intend on doing that is to ensure the welfare of the people by
certain initiatives and programs to help deprived people. The organizations have certain
guidelines that propose to work efficiently and effectively independently however the harsh
reality shows that how not for profit organizations do not have the power to work
independently because of the dominance of the powerful people who make contributions to
the charities where things have to be done in the way they say and as and not how the
organizations imagine to carry out the work. However, the organizations are going on with
their noble work despite of the interventions to serve the people and make sure their needs are
met.

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Reference
acnc.gov.au (2018). Governance for Good. [online] Acnc.gov.au. Available at:
https://www.acnc.gov.au/tools/guides/governance-good-acncs-guide-charity-board-members
[Accessed 15 May 2019].
Glaeser L. Edward. 2002. The Governance of Not-For-Profit Firms. NBER Working Paper
No. 8921. Massachusetts Avenue Cambridge