TESC NPO Paper 1

Marc Goss
NPO Management
Case Assignment
3rd October 2006


Non-profit organizations have quite the management task in order to be effective in society. There are four key functions of NPOs or arenas that non-profits operate, and they must be aware of the risks in concentrating on any one too much. The damage done by concentration on a single function is politicization, vendorism, particularism and commercialism. Each of these four components is inherently incorporated in any NPO. A one sided approach to emphasize one of these particular functions will lead to an overall lack in effectiveness of any NPO. Each of the mentioned functions should be incorporated when managing a successful NPO.
The four functions are vitally important to identify so one can assess the overall effect of the NPO. Politicization as defined, includes political lobbying for a certain agenda for change. This includes activating groups for a cause. A problem when NPOs concentrate to much on this that they may start to be bias with regard to who they are representing or use federal funds to drive political agendas. This raises questions as to why they should have special tax status. Political work combined with other activities will allow a NPO to have the support they need.
A NPO may also run the risk of acting as another government agency if they concentrate to strongly on providing goods and services to the public. This is known as vendorism and is defined as executing narrowly defined public projects the government could easily do. The NPO runs the risk of failing to differentiate themselves and simply vends services on behave of the public sector. This approach also hampers development of innovative and sustainable approaches to tasks and programs. This can happen when a NPO relies heavily on public funds to run operations.
Particularism arises when it is believed that the function of the NPO follows the beliefs and faith of individuals who are in agreement with an action or set of actions. Criticism arises from this management approach due to the point that the impulse to help has its roots in private convictions, personal values, and religious faith. Leading to the question of, are the views of these individuals representative of the public? It is most important to have visionaries and founders to guide a NPO, but management must not weight to heavily on this alone for the NPO will not be able to provide the social capital potential.
The final function of NPOs is social entrepreneurship and the problem of commercialism. NPOs sometimes make lots of profit, which they in turn use to cross, fund or support other programs on their agenda. This is seen as a way to support the work the NPO does though commercial ventures. The commercialism of NPOs raises questions about the sectors effectiveness and shift of management and operations to for-profit agendas. This leads to a shift in focus from mission to marketing and sales of their own products and services.
NPOs have been subject to many kinds of fraud. This has been mainly due to a lack in stringent management techniques that arise due to the nature of NPOs. Top officials are in the position to appropriate funds as they see fit. The given “case” example “Audit Excoriates United Way Leadership” clearly shows how easily top executives can use NPOs to embezzle funds. The best way to have avoided fraud would be to have a board that checks what the executive director is doing with the organization. Some of the One Minute Manager’s management philosophies on goal setting, clear expectations, leadership styles and task setting example put some checks and balances into management techniques. The executive director should be asked to furnish employees, the board, and the public with transparent financial statements. As seen in the United Way example, the ED had little difficulty with pocketing funds. A NPO is particularly subject to misuse of funds since it is up to their discretion as to how to use the funds appropriately according to their mission. This gives a large amount of leeway to exactly how much, from where, and for how long funds are used for a particular program; giving managers a chance to “play” with the funds. The United Way example shows this clearly with all the salary advances and use of the organization’s funds for personal use. In some cases NPOs hire under qualified individuals who are not devoted to the mission but are more concerned with personal gains from their position. The best way to steer clear of this kind of confusion is to have independent auditing firms audit NPOs more often, and for NPOs to publish their budgets and expenditure. The basis of much of NPO fraud comes form not following the mission of the organization and weighing to heavily on one of the above. For each NPO there is a different set of hurtles that need to be crossed but compassionate steadfast, honest, fair, management, is one of the greatest assets a NPO can ask for.