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Salamon's Nonprofit sector notes week 1

by: haley

Salamon's Nonprofit sector notes week 1

Marketplace > Western Michigan University > > Salamon s Nonprofit sector notes week 1
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These notes cover in class disscussion, week 1 reading, quiz 1 content, as well as midterm content
Class Notes
Nonprofit Nonprofit sector




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This 5 page Class Notes was uploaded by haley on Tuesday January 19, 2016. The Class Notes belongs to at Western Michigan University taught by in Summer 2015. Since its upload, it has received 12 views.


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Date Created: 01/19/16
Chapter 1 ( Page 1 ­ 6 )  ***** MEMORIZE 5 CHARACTERISTICS OF NONPROFIT ORGANIZATION SECTOR ****** ******5 defining characteristics of nonprofit sector******  Organization exempt from taxes through IRS   Private Institutionally separate from government not part of government apparatus or governed by boards dominated by government officials.   Non Profit distributing can not distribute any profits they might earn to directors managers or other    stakeholders. Profits must be put back into the basic mission of agency.  Self Governing Internal procedures for governance not controlled by outside entities.  Non compulsory  Meaningful element of choice participation not required by law. Crucial characteristic associated with nonprofit organizations  that of serving the public good or being of public benefit Why do we have a nonprofit sector?  Modernization: economies became more complex, need for protection made people join voluntary groups.  Market failure:  Growing complexity of social & economic life. Market struggles when  providing public or collective goods such as clean air or national defense. People are unsatisfied with markets production of public goods. diversity makes it difficult for citizens to come to agreement on range of public goods. They make majority  support for government response possible.  Trust: Limitation of market: Reliance of a strong flow of information between buyers and sellers of goods and services. Nonprofit organizations offer trust  because of the nondistribution constraint or prohibition on the distribution of  products. Making them more trustworthy than “for profit firms”.  Pluralism/ freedom & stakeholder theories: Flexibility and freedom they provide to a variety of social political,  religious and cultural groups. Facilitate the exercise of individual initiative for  public good.   Solidarity:  (unity or agreement of feeling or action among individuals with a common  interest)  Response to the need to foster sentiments of solidarity.  People believe in different ideas organizations help create the ability for different ideas to live  together and function in society. The stakes: why we need the nonprofit sector: Contributions that nonprofit organizations make in american society.  Service Provision: Term used to describe a wide range of activities Easy to veto government expansions of service provision. Nonprofit sector has  acted as a first line of defense which people concerned about a social or economic problem can begin to respond immediately.   Advocacy and problem identification:  Public support for a particular cause or policy. Nonprofit orgs play a vital  role for mobilizing broader public attention to social problems and needs.  The expressive function:  enrich human existence contribute to social and cultural vitality of american life.  Social Capital:  Creating & Sustaining “ Social capital” bonds of trust pivotal for a democratic and  market economy to function effectively. Nonprofit sector is essential to the development and  sustenance of a sense of community.      EXAMPLE  :  Joining a nonprofit organization that  interests you creates bonds and friendships known as “ social capital”.  Value Gaurdian:  Exemplifying and embodying a fundamental national value. Emphasizing  individual initiative in the public good. Gives people the notation that they should have the  freedom to act in private capacity on matters which concern them & the principle of solidarity  which people have responsibilities not only to themselves but humans in their community. Chapter 2 ( Page 9 ­ 26 ) The terminological tangle :  Terms emphasize one aspect or what is represent by the organization's @  expense of downplaying the other aspects.  Charitable sector:  emphasizes help organizations give to the poor & support received from private  charitable donations.  Independent sector: Important role organizations play as a “ third force” outside of realm of  government and private business.  Voluntary Sector: Significant input volunteers make to operation of this sector  Tax Exempt sector: Under u.s tax law organizations in this sector are exempt from national                                    income tax.  Civil Society sector: Emphasizes citizen base of organizations and role these orgs. play in  citizens engagement.   Social Economy: Serve common needs of stakeholders rather than maximize shareholders profits.  Social Venture: Depict class of organizations using market type and approaches to pursue social objectives. Some are “ for profit “ organizations others are nonprofit. Chapter 3 ( Page 27 ­ 65 )  Scope and Structure: The anatomy of America's nonprofit sector. Basic Contours:  Public benefit organizations   Important source of employment in the U.S. 13. 5 million workers employeed in the U.S Basic Division: Public Serving VS. Member Serving: whom organizations primarily serve.  Member Serving Organizations: ­  Benefits to their members rather than to the public at large ­ include organizations exempt from income tax ­ Labor unions, business professional associations, chamber of  commerce  Public Serving Organizations:  Serve the public @ large rather than members of organization  health and education serves sponsoring cultural or religious service advocating for  certain causes   aiding the poor.. etc. Treatment in tax law: distinction between primary member serving and public serving nonprofit  organizations is significant enough to find formal relaxation in the law.  Public Serving Organizations:  the only ones entitled to tax exemption. Anatomy of the public serving nonprofit sector: Consists of 4 different types of organizations  Service & Expression Organizations: Health care and adoption assistance  Social Welfare / Social Action Agencies:  Food Stamps  Funding Intermediaries:  Generating/ Distributing private support  ­ The United Way / American Cancer Society   Religious Congregations:  Religious worship Chapter 4 ( Page 65 ­ 78 )  The Nonprofit Sector in Context: The Government and Business Presence. To outline the basic scope structure of the government involvement in this “ mixed  economy” focusing on the social welfare sphere.   Nonprofits help identify problems and mobilize pressure on government to respond.  Gov establishes programs and raises resources then turns to nonprofit and “for profit”  organizations to deliver the services. The Government Role: Basic Parameters. U.S. spent 3.1 trillion on “ Social Welfare Services”   34% went to health benefits ­ medicare/ medicaid  32% went to social security  25% went to education  10% split among other activities. Federal VS. State & Local Rules: State and local gov retain substinate role in social welfare in financing gov social welfare services and  even more so in actually delivering services.    63% of 3.1 trillion came from federal government  37% came from state / local gov.   Federal Spending:  social security & veterans programs  State and Local Gov Spending   Education Government vs. Nonprofit Sector:  nonprofit sector is spending 75% as much as the government is on the same  organizations.  Nonproft is spending 2x as much on expenditures as state and local gov. Summary: ­State and local gov retain significant presence and play important part in Gov. spending for social welfare.  Over ½ of Gov spending goes to services in which nonprofit organizations are active  including health, education services, and social welfare.


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