Summary
Non-profit organizations (NPOs) around the globe have played a big part in their community. Even if they are not making any profit, they do it out of care and support for their community and their field of choice. NPOs have been observed in many sectors, such as social, health, environment, research, and others. As a result, they are important sectors that have a big role within their demographic locations. The purpose of non-profit organizations is clear from the name, and they are engaged in activities not directly aimed at making a profit. Non-profit organizations in Saudi Arabia are most often engaged in educational and outreach activities, scientific work, and charitable projects.
Non-profit organizations have taken a major interest in Saudi Arabia in the last few years, which has led to the establishment of the National Center of Non-Profit Sector in Saudi Arabia to support and govern that type of organization in the kingdom (NCNP, n.d.). From personal experience and observations, many non-profit organizations in Saudi Arabia are facing a variety of challenges and barriers to perform well, in fact some of these sectors had to shut down. This is also supported by Alshammari et al. (2014) as it was stated that non-profit organizations in Saudi Arabia lack management skills as well having low budgets compared to the other sectors. In order to properly start the research, Schindler (2019) states that the first stage to the business research process is clarifying research questions. Therefore, the main research questions that has been verified for this stage are:
- What type of challenges are facing non-profit organizations in Saudi Arabia?
- What are the expectations of non-profit organizations from the community and the authorities?
- How can non-profit organizations achieve sustainability in the long-run?
A modern mixed economy is a holistic mechanism based on the optimal combination of material, spiritual and social values, as market, and non-market management methods. According to Treinta et al. (2020), “Non-profit organizations (NPOs) are an alternative approach to address collective needs of specific groups in the community and represent many types of organization.” The non-commercial sector, designed to implement social, cultural, educational, and charitable goals, plays a significant role in the economy of any country.
Therefore, more research is needed on this topic to explore all the above-mentioned questions facing non-profit organizations on Saudi Arabia to understand their current situations better and find possible solutions to improve their performance and sustainability in the kingdom.
Challenges Facing Non-profit Organizations in Saudi Arabia
There are a number of reasons why this question is important in this topic. Very few companies of this type have enough funds to implement their programs. Many non-profit organizations cease to exist due to a lack of material support, formally continuing to be listed in the register of the Ministry of Justice. NPO resource centers play an important role in supporting registered and unregistered associations of citizens. Among the possible barriers for NCOs to enter the market of social services, the following are distinguished: personnel problems (lack of staff), infrastructure problems, inconsistent policy of the authorities, and possible emotional difficulties for NCO staff.
The Expectations of Non-profit Organizations from the Community and the Authorities
This question will help to find out what non-profit organizations lack for systematic development and eliminate these factors. Barriers to the development of NPOs in Saudi Arabia are the weak involvement of the state in helping non-profit organizations, for example, in disseminating information about social services provided by NPOs; underdeveloped legislation relating to non-profit organizations; lack of resources for NGOs to implement their own programs and difficulties in finding funding. There are not enough proposals from the state or the commercial sector due to the non-profitability of non-profit organizations. The state is expected to provide financial support for such organizations, as well as help people find non-profit companies that would satisfy their needs.
Ways for Non-profit Organizations to Achieve Long-term Sustainability
This question will help people to understand how to achieve sustainability in the non-profit organizations because even if the challenges facing these organizations are resolved, it could only be temporary. Therefore, it is important to research this topic with the top management in these organizations for suggestions on how to achieve financial sustainability or otherwise. One of the most important advantages of non-profit organizations is the flexibility of socially oriented activities, which consists in the awareness of employees and management of the company about the social needs of the population. This could potentially help achieve long-term stability for such organizations. It includes the ability to quickly respond to changing demand for social services and the ability to offer a convenient mechanism for their provision.
Literature Review
A non-profit organization (NPO) aims to generate profit and distribute it to the company’s members. Treinta et al. (2020) suggest that non-profit organizations focus on values and missions and consider the social impact of the agency. Indeed, Benevene et al. (2018) assume that non-profit organizations have strong ties to the agency’s values to the extent that profit organizations do; it highlights the importance of dedication and alignment with the company’s goals. Benevene et al. (2018) propose a hypothesis which finds evidence in further studies:
Ethical leadership → volunteer satisfaction → intention to stay → affective organizational commitment.
Accordingly, non-profit organizations in Saudi Arabia have played a significant role in the last few years, which caused the establishment of the National Center of Non-Profit Sector in Saudi Arabia (NCNP, n. d.). However, such NPOs in Saudi Arabia can face various challenges; for example, Alshammari et al. (2014) prove that the lack of managerial skills and low budget create obstacles for NPOs. Financial problems stop the development and create further obstacles for no-profit organizations. According to Schindler (2019), it is necessary to identify critical issues in the business research process. Therefore, several issues to be considered are the challenges faced by NPOs in Saudi Arabia, the expectations of non-profit organizations from authorities and the community, and the approaches that will facilitate the sustainability of NPOs in Saudi Arabia in the long run.
Obstacles for NPOs in Saudi Arabia
Corporate and organizational issues typically arise from a single problem that causes more immense struggles and leads to a chain of obstacles within small- or middle-sized organizations. Pinto and Allui (2020) suggest several problems that arise in non-profit organizations in Saudi Arabia; for instance, the authors provide a study conducted in 2009, which points to three main barriers. These barriers involve a lack of governmental support, high project costs, and time constraints (Pinto & Allui, 2020, p. 262). The relevant study conducted by the authors proposes barriers to corporate social responsibility development in NPOs:
Lack of employees’ competencies (Mean = 3.15; SD = 1.32); lack of investors’ interest (Mean = 3.24; SD = 1.20); the company is too small (Mean = 2.84; SD = 1.40) (Pinto & Allui, 2020, p. 265).
Thus, the authors indicated the most frequent obstacles preventing NPOs from implementing effective business practices. Moreover, lack of financing and insufficient governmental support can prevent the rapid development of the non-profit organization. According to Aloitabi et al. (2019), the struggles of NPOs include a lack of knowledge, poor management, vague project requirements, and unclear guidelines. Kunert (2018) states that PR challenges linked to the moral side of the question can arise in non-profit organizations. These obstacles create significant issues in regulations and standards and cause misunderstanding within the non-profit organization.
Community and Authority Perspectives
Another critical factor that needs to be considered in examining the non-profit organizations of Saudi Arabia is expectation. Community and authorities’ expectations play a crucial role in forming NPOs. Plaisance (2021) divides expectations into two dimensions; for example, authorial expectations can be presented by compliance with stakeholders’ requirements. Moreover, according to Bergman et al. (2017), NPOs expect governmental support and funding. The same is reflected in Phillips and Taylor (2020), who claim a significant lack of state financing. Accordingly, ‘fund-raising strategies’ are expected as many small NPOs cannot afford them (Nageswarakurukkal et al., 2019, p. 286). In addition, Gazzola et al. (2017) suggest that NPOs expect the community to integrate social and economic prosperity. NPOs often face zero profitability; thus, community profit is expected. Therefore, in both perspectives, considering authorial and community needs is essential for the organization’s success. According to Filho et al. (2019), the proposed hypothesis is that there is a need to interconnect social, economic, and environmental requirements for non-profit organizations’ sustainability.
Approaches for NPOs’ Improvement
Indeed, there are several ways for non-profit organizations to achieve long-term sustainability. Nageswarakurukkal et al. (2019) state that NPOs should focus on cost-efficient approaches, as mainly non-profit organizations lack proper funding and cannot afford costly investment and mass marketing methods. Moreover, one of the ways to improve financial sustainability in NPOs is to generate a voluntary board of directors (Golensky & Hager, 2020). According to the authors, the board of directors can help to endow selected members with legal power and authority to solve financial questions, provisions, and protection from monetary losses and damages (Golensky & Hager, 2020). Furthermore, some authors suggest that managerial practices change rapidly, and it is essential for non-profit organizations to follow shifts (Suykens et al., 2018). It is vital to react to changes quickly in modern business. Hankin et al. (2018) assume that non-profit organizations should respond to social, political, religious, and educational changes. Respectively, Oliveira et al. (2021) say that the crisis of COVID-19 brought significant changes to business processes worldwide. Many organizations failed to proceed to work because of insufficient business strategies. In contrast, the business world recognizes many examples of success for companies that have become prosperous during the pandemic lockdown. For these authors, proper human resource management is one of the critical factors to success (Oliveira et al., 2021). Therefore, there are several ways to achieve long-term sustainability for non-profit organizations, which include proper management, voluntary activity, and quickly respond to changing environments.
References
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