Governance of Non-Profit Organizations: A Comparative Study

This paper discusses two publications on the governance of non-profit organizations, their arguments, recommendations, and differences. The first article by Acnc.gov.au discusses the compliance of laws and regulations, the strengthening of democracy, and the promotion of health and well-being. The second article by Glaeser discusses the need for non-profit organizations to compete with other organizations, the effect of weak governance, and the difference between profit and non-profit organizations. The paper concludes with the need for proper governance and the development of theories for the proper functioning of non-profit organizations.

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EXECUTIVE SUMMARY
The non-profit organizations majorly function to serve the people who have been the residents of
a given country. The following paper attempted to shed light on two different publications on the
governance of the non-profit organizations. The paper opened with an overall summarization of
the articles. The paper then proceeded to discuss the recommendations that were found within
the articles. The paper finally neared the conclusion with the discussion on the differences that
have been highlighted between the papers.

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Table of Contents
Introduction..........................................................................................................................3
Arguments in the articles.....................................................................................................3
Recommendations............................................................................................................5
Differences among the articles............................................................................................6
Conclusion...........................................................................................................................7
References............................................................................................................................8

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Introduction
The non-profit organizations, as the name suggests refer to the organizations that are
meant to function for the development of the concerned country or area. These organizations
generally do not function for the generation of the profit or form the viewpoint of gaining
business like outcomes. The major function of these organizations is to serve the people who
have been residing within the country. The majority of the organizations that have been
operating with the purpose of serving the masses tend to operate under the management of a
board that is maintained by the concerned organization. The following paper attempts a
discussion on two different publications on the governance of the non-profit organizations. The
paper opens with an overall summarization of the articles. The paper then further proceeds to
discuss the recommendations that are found within the articles. The paper finally nears its
conclusion with the discussion on the differences that are highlighted between the papers.
Arguments in the articles
In the article entitled “Governance for good: The ACNC's guide for charity board
members”, Acnc.gov.au (2018) claims that the charities that are conducted within the Australian
territorial boundaries play a huge role within the government of the organization. The charities
that are conducted within the Australian territory are known to have been affecting all the
communities that exist within the country. The commissioner of the Australian Charities and
Not-for-profits Commission in his introductory note to the article claims that the charities that
are conducted within the country help in the enrichment of the culture that is followed within the
country. The charitable activities also help in the other social activities like the development in
the fields of the education of the children residing in the country. The activities that have been
undertaken by the nonprofit organizations within the country help in the strengthening of the

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democracy as well as assists the promotion of the health and the well-being of the residents of
the country. The charitable organizations are also known to be developing an advocacy on behalf
of the communities and the individuals. The commissioner further states that the board members
of the organization are majorly responsible for the proper functioning and the expansion of the
charity. The report on the governance of the charitable organizations as presented by the
Australian Charities and Not-for-profits Commission tend to discuss the reason behind the need
for the proper governance of the non-profit organizations. The authors further discuss the fact
that the charitable organizations and the people who have been engaged to the charitable
organization should be made aware of the importance of the charity in the society as well as
encouraged to serve the concern and the society at large in a better manner. The article by
Acnc.gov.au (2018) tends to put forth the issues that are required for the development of the not-
for-profit organizations that are active within the territorial frontiers of Australia.
On the other hand, the article entitled “The governance of not-for-profit firms” by Glaeser
(2002) attempts a discussion on the need of the concerned organizations to compete with the
other organizations that are present within the same market. The article discusses the effect of the
weak governance on the development of the organization. The article tends to discuss the fact
that the majority of the non-profit organizations tend to develop into the similar organizations
that tend to resemble the organizations that are mostly described to be the worker’s cooperatives.
The article tends to discuss the operations of the not-for-profit organizations in the different
sectors that involve the basic purpose of serving the mankind at the several levels of the society.
The author argues the fact that the major reason that might be presumed to be the driving force
behind the activity is the increase in the competition within the given sectors. The author states
the fact that the major difference between the profit and the not-for-profit organization lie in the

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fact that the not-for-profit organizations tend to have a large number of the tax benefits that are
attached to these organizations. The other factor that is highlighted by the author to be a
differentiating factor in case of the not-for-profit organization refer to the fact that these not-for-
profit organizations are not permitted to distribute the gained profits towards the owners or the
employees of the concerned organization. This helps in the maintenance of the transparency
within the organization as well as helps in increasing the expansion of the area of service that is
undertaken by the concerned organization. The authors further claim that the non-profit
organizations tend to have no specific owner but are controlled by the boards that are present for
ensuring the proper and the smooth functioning of the organization.
Recommendations
Glaeser (2002) states that in cases of the majority of the non-profit organizations, the
preferences of the concerned management gains importance over the preferences of the donors as
well as the minor contributors of the organization. The author further states that the non-profit
organizations might at times tend to provide more importance to the elite and the more
knowledgeable members of the organization. This leads to the conditions wherein the employees
serving at the lower levels of the organization tend to receive lower wages. The author
recommends a proper governance in case of the organizations that are governed by the boards
other than the governmental body of the organization in discussion. This would help in the
maintenance of a proper workforce as well as the generation of the required profits within the
sector.
The article by Acnc.gov.au (2018) on the other hand states that the concerned non-profit
organizations should strictly follow the measures that are required for the proper and seamless
performance of the organization in the given market. The article suggests that the non-profit

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organizations should revise the purpose of their existence with the newer members of the
organization so that they too might be involved in the proper representation of the activities that
are performed by the organization. The non-profit organizations that have been operating within
the territorial boundaries of Australia are also advised to develop the accountability towards the
members of the organization as well as towards the government of the country. The article
further points out the fact that the members of the organization who have been chosen for the
formation of the board in case of the non-profit organizations should be responsible towards the
proper performance of the organization as well.
Differences among the articles
The two articles that have been discussed above differ on some major factors. The article
by Acnc.gov.au (2018) majorly discusses the facts that are related to the compliance of the laws
and the regulations of the land wherein the company has been featuring. The major focus of the
article lies on the proper functioning of the non-profit organization within the given territory.
The report on the governance of the charitable organizations as presented by the Australian
Charities and Not-for-profits Commission tend to discuss the reason behind the need for the
proper governance of the non-profit organizations. The activities that have been undertaken by
the nonprofit organizations within the country help in the strengthening of the democracy as well
as assists the promotion of the health and the well-being of the residents of the country.
On the contrary, the article by Glaeser (2002) states that the majority of the organizations
that have started as the non-profit organizations tend to become worker’s cooperatives in the
course of their existence and performance in the market. The author argues the driving force
behind the increase in the change in the nature of the non-profit organizations has been resulting
from the higher levels of increase in the competition within the given sectors. The article tends to

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discuss the operations of the not-for-profit organizations in the different sectors that involve the
basic purpose of serving the mankind at the several levels of the society. The author states the
fact that the major difference between the profit and the not-for-profit organization lie in the fact
that the not-for-profit organizations tend to have a large number of the tax benefits that are
attached to these organizations. The author further states that the non-profit organizations might
at times tend to provide more importance to the elite and the more knowledgeable members of
the organization.
Conclusion
In lieu of the above discussion it might be stated that there are differences in the
perspectives of the various boards of the organizations that have been delivering the non-profit
services to the residents of the country. The charities that are conducted within the Australian
territory are known to have been affecting all the communities that exist within the country. The
activities that have been undertaken by the nonprofit organizations within the country help in the
strengthening of the democracy as well as assists the promotion of the health and the well-being
of the residents of the country. The charitable organizations are also known to be developing an
advocacy on behalf of the communities and the individuals. Thus, the concerned departments
within the given country might be advised to discuss the theories that are required for the
development and the proper functioning of the concerned organization.

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References
Acnc.gov.au 2018. Governance for good: The ACNC's guide for charity board members |
Australian Charities and Not-for-profits Commission. [online] Acnc.gov.au. Available at:
https://www.acnc.gov.au/tools/guides/governance-good-acncs-guide-charity-board-members
[Accessed 9 Feb. 2019].
Glaeser, E.L., 2002. The governance of not-for-profit firms(No. w8921). National Bureau of
Economic Research.