A nonprofit organization has many different definitions based on the specific interests underlying its formation. The bottom line, however, is that these organizations are formed for other purposes rather than generating profit. They could be aimed at serving the community or the specified members of the organization but not on the grounds of selling shares or accumulating a profit. This, however, does not imply that nonprofit organizations are not a part of the global economy. These institutions play a significant role in the society and the economy in general. The functions of the nonprofit organizations vary, but in general, each nonprofit organization in its own way is responsible for serving people within their respective communities, whether as individuals or as a society. Even though nonprofit organizations have had challenges in some cases, the existence of these agencies must be encouraged in democratic societies because such institutions promote accountability, protect the rights of vulnerable groups, and offer crucial services to the poor.

Why Nonprofit Organizations Must Be Encouraged in Societies/Advantages of the Provision of Critical Services

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In order to be a registered nonprofit organization, it is required by the governments to have a defined purpose that the agency is going to pursue. This implies determining their goals and intentions for the community within which they will be operating. Some nonprofit organizations aim to eradicate poverty or promote the adequate living standards of the members within a given society, while others focus on problems like hunger, illiteracy, HIV, and gender violence (Rothschild, 2012). Generally, nonprofit institutions are formed based on helping to correct a pressing problem within a certain community. To accomplish these objectives, the organizations often require donors who are members of the public or foreign agencies. This means that the organizations are independent of the government and the private sector, and are thus able to play a neutral role that is meant to favor the public. Nonprofit organizations, in this case, bridge the gap between the government and the private sector by defining an objective and taking often an unbiased position in matters that affect the society. Since the government is elected by the society and thus is a representative and protector of the interests of the people, they often have to operate within significant restraints owing to policies and laws. The private sector, on the other hand, is also often limited by their focus on profitability and the economy of the nation in question. In order to ensure that the needs and expectations of the common citizens are fulfilled, respected or protected, the nonprofit organizations operate with their own flexible rules and budgets, without a specified interest in profits.

Creation of Jobs

Nonprofit organizations are mostly defined by their mission to serve the public. Therefore, among other things, the organization is expected to have a positive impact in the community within which it exists. A number of specific benefits are attributed to the nonprofit agencies in the present-day society, and some of these are discussed below.

Unemployment is a significant challenge in the current global economy with a good number of people within the labor market unable to find work. A nonprofit organization is mostly run like any other organizations, with a significant number of staff members depending on the size and the activities of the organization. Without these institutions, many individuals in the society would be unemployed. It can be appreciated that while there are a number of nonprofit organizations that run for a short time period, they also manage to contribute to the employment pool even if it is temporarily. The creation of jobs helps the society to ensure that more people can support themselves rather than rely on unemployment checks in countries where there is this kind of welfare system. In most states, where nonprofit organizations have to operate, there are no unemployment benefits, and thus any employment opportunity, no matter how brief, is appreciated as a chance to live a decent life. Nonprofit organizations like the USAID and Red Cross have been able to provide jobs for decades as they continue to remain operational and even expand into new regions in the world.

Positive Contribution to the Business Industry

When these organizations create jobs, they enable members of the society to earn a living. This means that there is more money in the community, therefore the local businesses can prosper. In this sense, nonprofit organizations stimulate the local economy, thus boosting community development. It can also be appreciated that these organizations are run in a manner that is similar to the business organizations. They need offices and stationery, vehicles, and communications systems. This means that the nonprofit organizations are also major consumers of third-party goods. Their presence thus enhances the customer base for the local business. All in all, this is a positive contribution to the economy.

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Protecting the Rights of the Citizens

Most nonprofit organizations play a significant role in policy making within their respective communities. The communities within a given country may not have the voice to be heard by the government owing to financial and in some cases tactical limitations. With the backing of a nonprofit organization, the society gain a voice that can help it advance its grievances to the government. This has been experienced across the world with the subjects such as gay rights, animal rights, education, gender equality, environmental conservation, and even health care policies. Generally, the nonprofit organizations help the citizens of a certain nation to attract the attention of their governments with respect to matters that are affecting people.

Accountability and Transparency in the Government and Private Sector

Considering that these organizations are neither a part of the government nor the private sector, it is a general expectation that nonprofit agencies would always be neutral and objective in their activities. As a part of the society, the nonprofit organizations often owe their allegiance to what is right based on national and international definitions. This means that regardless of the circumstances, these organizations are supposed to represent the virtuous way. This viewpoint promotes transparency and accountability within governments and the private sector as well. As a rule, the government and the private sector often collaborate, and when they do, the society usually faces trouble as the ruling class seeks to create advantages for themselves at the expense of the common citizens of the nation. The role of the nonprofit organizations within such circumstances is to opt for the righteous path and expose any unacceptable conduct by the government and the private sectors. These nonprofit organizations have not only the mandate to do so but also the interests and the means to be regulators in the relationship among the government, the private sector, and the public.

Partnering With the Government towards Development Goals

Governments are usually responsible to create, define, and implement national development goals, but in some cases, there is a shortage of funding, expertise or connectedness. Nonprofit organizations often operate at the grassroots level and thus they have a wide outreach that gets things done more efficiently. When these organizations partner with governments on development projects, there is often a higher likelihood that the plan at hand would be completed effectively and within good time. This is because while the government may have its limitations and other interests as harbored by the ruling class, nonprofit organizations main interest is in developing the community. This means that they are in the best position to guarantee that development projects would be designed and implemented as required.

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Counter Views/ Disadvantages of Nonprofit Organization

A number of challenges make nonprofit organizations problematic in some contexts. For example, it can be appreciated that some of these nonprofit organizations operate on very large budgets. The fact that they are not monitored as strictly as most publicly owned companies leaves the directors with a loophole that they can exploit and take advantage of the donor funds to benefit their private indulgences. This means that the nonprofit organizations are subject to accountability challenges just as business organizations are subject to accountability issues. Similarly, nonprofit organizations are often very large in size, which affects their effectiveness owing to an overstretched organizational structure. Larger institutions become more difficult to control in terms of their goals, objectives, and strategies. In addition, the fact that these organizations are far apart, dealing with different circumstances and environments, makes it difficult to ensure that the entire organization meets the set expectations in terms of integrity and accountability.


The challenges that make nonprofits organizations less effective within the community are mostly administrative and they can be resolved through effective and relevant policies for the formation and management of these agencies. It can be appreciated that the nonprofit organizations play the role of a referee, ensuring that both the government and the private sectors act accordingly towards the citizens needs. The objective of the nonprofit organizations is to guarantee that the society is able to develop, there are consistent job opportunities being created, the economy is being stimulated, and the peoples voice is being heard by both their government and the corporations. Moreover, despite the few demerits that these organizations may have, their role and importance in the society cannot be underestimated. In fact, they are also active contributors to the global economy as consumers and employers.

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