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Government Grants and Nonprofits Dealing with Bureaucracy Term Paper

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Updated: Jul 24th, 2020

Abstract

A Non-profit organization describes a type of business that does not allow the sharing of profits among its owners. The term ‘profit’ in this description is used to explain but not actually to mean the perception of surplus of revenues against the organizations spending. Non-profits organization are organized into corporations under the corporations laws which may vary in each state since every state has its own provisions of creating a non-profit organization that allow different forms of organizations including a trust or unincorporated association among others.

There is also involvement of Internal Revenue Service (IRS) since it’s under this section that the organization of nonprofits is defined including taxation. Any corporation is required to pay corporate income tax to the federal government on their net income and it is here is that charities tax exemption is highlighted. There is the need for NGOs to engage themselves in fundraising activities in an attempt to fulfill their financial obligations. Various ways are available through which NGOs can be bale to seek for funds to finance their operations.

First, it is the government grants that provide them with the largest support. However, in some instances, non-government agencies, corporations and foundations can also give their financial assistance through donations. Agencies that receive grants from the government to run their humanitarian programs base their repayment on charges for those services. There are bureaucracies that are involved when trying to acquire government grants. For instance, the receiving organizations are required to prepare a report of the programs they operate and how they spent their funds when the grant period ends.

Introduction and Statement of the Problem

Nonprofits are usually run under different rules and regulations from those that govern private organization established for making profits. They enjoy some special privileges and this gives them significant advantages over profit seeking corporation in the market. These non-profit organizations do not pay taxes to the federal, state and local tax schemes or to any other regulating body. These organizations also enjoy priority preference during awarding of government grants and contracts.

These tax exemptions and other privileges help these organizations to cut their operation costs and they ultimately gain an edge over the private organizations (Alexander et al, 1999, p. 453). The profit organizations are in this context punished further to the degree that they bear this cost of subsidizing in the form of higher taxes. In many instances, the profit making organizations are pushed away from the market or they suffer big losses while new organization gets discouraged from venturing into the market in which these non-profits also work.

The idea of exempting these organizations from taxes was reached by the Congress and it is based on the welfare theory (Alexander et al, 1999, p. 453). This theory states that the nonprofits offer services that would otherwise have been offered by the government were it that these nonprofits were not in existence. This therefore means that any revenue lost by tax exemption is eventually offset by shifting the finance load of offering these services from the federal treasury.

The non-profits are developing very fast because of the increasing demand of their services as they are basically essential for daily lives of citizens. For instance, the nonprofits offer services like day-care, medical services, relief aid, food and educational support (Brown, 2006, p. 4). The government has also extended the support it gives to the nonprofits because beyond the tax exemptions because these organizations are said to offer collective services and the benefits that they yield benefits a wider range of people or clients.

Problem Statement

Government grants are used by the government to do social work through non-profit organization without taking the responsibility of being answerable to the citizens. Besides, the government gains control over the nonprofits through this support (Brown, 2006, p. 4). This can be seen in the way that these grants are allocated with special preference being awarded to the nonprofits. The government escapes responsibilities for investing in projects where no public consensus has been reached like religious and educational support (Berry & Arons, 2003, p. 56). Tax exempted organizations operate like other profit making organizations since they own accounts, they own assets, they earn income from goods or services they offer including incomes as grants.

Legal regulation

Nonprofits can be categorized into more than 20 different types under the Internal Revenue system depending on their objective (e.g. charities, educational purposes, religious, children welfare or literary), but 501(c) (3) provides the most common way of classification. It is also under this code that all nonprofits are excepted form paying tax (Brown, 2006, p. 4). There are no legal restrictions on the manner in which the nonprofits generate their surpluses or how to allocate them. An individual cannot own a non-profit business. He/she can only be the founder or director but never collect profits or sell the business for personal benefits (Berry & Arons, 2003, p. 56). The founders of any non-profit organization are protected from personal liability for the activities of the organization since the organization is considered a separate entity from the founders and those who run it.

The IRS (Internal Revenue Service) is charged with the responsibility of regulating the NGOs seeing that it is a legal requirement for all corporations to pay tax. However there are some corporations that are exempt from these revenues and these categories are mentioned in section 501 of the IR code. Among them are charities, religious, or scientific and those organized for educational benefits (Alexander et al, 1999, p. 453). The rationale to regulate the nonprofits businesses through 501(c) (3) is quite clear-cut; these organizations are public charities. Nonprofits operated under this code are those which are solely charitable, for public safety, for religious, science or for education.

Definition of terms

Grant

This is a financial assistance that is donated to support an organization to run its programs. Grants are typically given to nonprofits for a certain program or objective ranging from corporations to government agencies.

Non-profit

This is a type of business organization formed under regulations that does not allow the founders to share profits. Profits here are relatively tricky accounting terminology related to and not equal to surplus of income over expenses. Many nonprofits are registered as corporation and this way they are managed under the federal and state laws according to the state in which they operate.

Charitable organization

This is a form of a nonprofit that is generally a public charity or a foundation. It is quite different from other nonprofits in that it concentrates on a general philanthropist that serves the interests of the public.

Clients

All the services and activities that nonprofits offer or are engaged in are directed towards serving clients. Clients therefore refer to the ‘consumers’ of the commodities offered by nonprofits whether touchable or intangible.

Literature Review

Introduction

The government offers grants to humanitarian agencies for financial assistance so that they can through this carry out public services or to stimulate social service. These federal grants are not given to individuals for their own benefits but rather target to benefit the whole community. This means that they are given utterly for charities. Those nonprofit organizations that qualify as charities are based on the reason other than advocacy in politics and this means that their purposes are to shelter the homeless, feed the hungry, build recreation for children and provide health facilities which are exclusively to offer basic services (Berry & Arons, 2003, p. 59). Their mission is strictly prohibited from conducting political activities.

Tax deductibility is a type of spending and this simply means a subsidy in simple terms. If then the government by subsidizing means not taxing nonprofits, then it will have to collect more revenue from other sources. If the governments don’t subsidize charities, then federal tax for profit making corporation would be lower than it is (Alexander et al, 1999, p. 454). On the other hand, if there were no charitable organizations, then the government would have to spend more money on running the humanitarian programs across the country or even create several other subsidies.

Indeed, the major argument that defends nonprofits is that they offer services that the government wants to see being offered to its citizens. Still, there is a certainly a strong, justified basis that the government uses to regulates the manner in which that taxpayers’ money is used (Alexander et al, 1999, p. 455). Sometimes the organizations can be used for political objectives and the objective would be undermined as explained in 501(c) (3). In order to protect vitally significant manner in which government finances its welfare, civic programs and charities, then the best choice would be to control the nonprofits that have already qualified under 501(c)(3).

Overreliance on Government

There are some problems that are faced by the nonprofits due to their dependence on the government support. Vendorism, bureaucracy and dependence are the main problems though they have been dismissed by some people as not being as dangerous as implied. However, researches across the United States have shown that these dangers are very real.

Bureaucracy: the processes that have to be followed during application for government grants or trying to obtain government contracts are in most cases exceedingly complex. The laws and regulations that deal with the way the nonprofits uses the money it gets from government financing or contracting are habitually changing (Carpenter, 2001, p. 121). For the nonprofits to be able to obtain government grants, they need to meet certain requirements which include hiring professionals into the organizations (Alexander et al, 1999, p. 455). In order to meet the set conditions that their proposal must have, to govern new communal programs, and to conform to government’s regulation laws, many nonprofits tend to design organization structures that would enable them to do all this (Ali, 2007, p. 73).

They dedicate each staff to probably every government agency that provides financial support in order to secure some grants or contracts (Carpenter, 2001, p. 121). These efforts have been found to take up too much time of the organization. Consequently, these organizations end up developing very complicated organizational structures, and these basically matches their public financing streams. The processes of writing proposals, drafting reports for accountability, creating financial plans considerably increase organizational costs hence deflecting major resources from their core mission which is to benefit the community (Ali, 2007, p. 73).

Vendorism: sometimes nonprofits get desperate to obtain grants and contracts from the government. When the government is the major source of income, the nonprofits are forced to compete for few government finances so that they can acquire the support by every means. There are major changes that include altering their mission and characteristics. Some nonprofits have grown into passive, homogenized social service groups purported by the public (Carpenter, 2001, p. 121). This is a position that these organizations have reached following several years of depending on grants from the government.

Dependence: as nonprofits continue depending on the government for support, the government also tends to rely on these organizations to provide the public with certain services as such they sometimes consider this association as a ‘partnership’ which benefits the two entities. Some other parties view this kind of association as patron-client relationship. For this relationship to last for long power must balance between the two entities and evidently this cannot be, even by any means (Ali, 2007, p. 73). When financing is entirely from the government, then it has the upper hand in calling the shots.

It decides how the finances are going to be allocated, which organization gets the money and what services are contracted and the like. When the nonprofits are required to provide state-financed services based on the terms that are in most cases or at times wholly by the government, there can barely be real partnership in this case (Carpenter, 2001, p. 124).

They can simply be referred to as government agents, and as the patron, the government can lure these nonprofits to focus on providing services that they would otherwise have not ventured into. To a certain degree, the financial support of the government distorts or influences their mission and this way, the autonomy that the nonprofits should be enjoying is infringed (Ali, 2007, p. 73). The organizations are unable to protect their independence from their financiers.

There is a lot of money that the government is willing to offer to the nonprofits for their services and this money is given out in form of grants only accessible following application to the federal government. The government reviews each proposal on individual basis and they consider numerous reasons for the grants including business ideas and value for money (Carpenter, 2001, p. 125).

The best legitimate reason for making the application and a viable plan for implementing it may be able to acquire an approval for the grants. Since the mission of the non-profits is to safeguard human rights and bring about such a big difference in lives of the community members, it’s no surprise that these people are most deserving of the money. However, the organizations do not meet their objectives independently because the organization is influenced by management (Carpenter, 2001, p. 125).

Organizational Structure

The way an organization is organized usually has a big role in shaping the way that organization will behave. Whether it is in the way the organization selects the activities it will conduct or the manner in which the work will be conducted and managed (Tucker & David, 2006, p. 183). There are basically two aspects of organization that impact most in this case, and can seriously affect the way charities function; they are Professionalism and bureaucratization. The government as identified earlier can at time requires that the charities being financed employ experts to run their activities.

When this happens, the professionals would be apt to strategically formalize the nonprofits in a way that they are protected from threats and challenges (Ali, 2007, p. 73). Such organization could destabilize major production of the organization. The professionals will also tend to use institutional strategies and show competence for forming a coalition. For advocacy of humanitarian issues, the latter could be favorable however in other times it will be problematic (Tucker & David, 2006, p. 183).

The paid staff could displace the main objectives that the organizations were founded on. This is because there are issues like career advancement and system management strategy and this could harm the dedication that is given to other important activities (Ali, 2007, p. 73). This deference could as well build a myopic perception of the organizational responsibilities on core production at the expense of the most necessary services to the public.

Another impact comes from the way in which the advocacy is managed through the hierarchical ranks, processes or rules. It important to note that with professionalism, the concept of bureaucracy can work in both directions. First, bureaucratization can promote better services by the nonprofits since their services get established state practices included into the managerial practice (Tucker & David, 2006, p. 185).

However, some studies have revealed that bureaucratization of these services puts restrictions on the people that are traditionally marginalized in terms of civic rights etc. this is because it directs the clients to conform to the traditional norms of interest participation, instead of encouraging activities that are regarded as being very critical for general representation (Tucker & David, 2006, p. 184). Both structural aspects indicate that competition in their ability to offer better representation or civic service. And while it’s sensible for a bureaucratic personality to come up in an area where there are many paid professional, there is also theoretical rationale purporting that they have self-sufficient results as well; something that can be tested empirically (Alexander et al, 1999, p. 455).

Government Requirements for Nonprofits

There are set rules that determine the admissibility of a nonprofit properly explained in IRS section 501 specifically (c) (3). Because of their charitable services, they are exempt from taxation. The nonprofits that are formed in line with specifications of 501(c)(4) also deal with social welfare and can advocate to the government, a function that is wholly restricted to the firms formed under 502(c)(3). Donations given to them are hence tax-deductible (Ali, 2007, p. 73). However, there are two reasons that the government wants the nonprofits to run. First, the nonprofits protect certain fundamental freedoms and liberties like freedom of expression and second, nonprofits provide market to consume the product and services like health and food that are supplied by the government.

Whereas design of nonprofits is usually devoted to protecting liberties and maybe less concerned about economic efficacy, services offered by the government on the other hand are traditionally measured against economic efficiency. The major role of non profits is to offer goods and services for use by the public and as such, the government has reasons for fostering these nonprofits (Ali, 2007, p. 73).

The major one is that the government wants the nonprofits to provide basic commodities to the community. The government’s democratic choice of the will not satisfy high demand populations and then this has to be addressed by the nonprofits. The non-distribution restrictions encourages the government to grant nonprofits some help because when there is no transparency on how donations were used in profit-making companies, they can pass these to their shareholders instead of using them for service provision (Alexander et al, 1999, p. 457).

Another reason is that the nonprofits can distribute services to the community through ways that are unavailable to government agencies, for instance religious environment. This latitude also encourages grants from philanthropic individuals (Ali, 2007, p. 74). The donors’ ideologies are usually matched with the services of the nonprofits. With this perception, the government builds on the definition of the nonprofits whereby they are considered to be without owners.

Nonprofits from a Global Perception

Exercising charity is a way of expressing humanitarian sympathy including feeling for other people and capacity to place themselves in other persons’ shoes. Therefore non-profit across the world are seen as humanitarian advocates and means of maintaining social system. Nonprofits help to relieve social tension in communities in order to basically preserve a differentiation in economic groups and hence also preserve status quo (Tucker & David, 2006, p. 187). They enhance societal stability by being used as a tool for social control by the government.

The mission of many nonprofits does not in many cases match exactly with the governments donors. Even though the basic motive of the donors is relief-based and most receptive to address the short term problems like food, hunger, health and homelessness. The objectives of private voluntary organization on the other hand aim at meeting developmental objective like education, public health program, creating income generating projects and training. The challenge comes when these nonprofits are struggling to maintain and extend their activities while the social crises often faced are short-term.

Government Dominance

Some nonprofits are now defining their development objective based on political environment and goals instead of economic terms. Many American nonprofits do their aid services abroad, where they have expanded their goals to issues that are not a priority to the government donors (Wang, 2000, p. 9). These nonprofits support groups in developing countries and also campaign for programs that are different from and at times contrasting the strategies that the government approves back in home country (Wang, 2000, p. 9). For instance some nonprofit work against oppressive governments and seek to try and restore stability in warring or unstable nations the way some organization did in Cuba. The social supports that were offered to the low income sectors was a relief for the government to care for the groups they considered not part of their support base.

There are some factors that are crucial when it comes to nonprofits advocacy and the major one is collaborative networking. When nonprofits engage in numerous inter-organization functions they form a lot of associations and alliances. There is definitely a difference in the degree of networking by various organizations to reach key resources in an attempt to meet their mission (Wang, 2000, p. 9). Charities are involved in collaborative networking to economize transaction expenses that are linked to service delivery.

The pattern of having the largest source of financial assistance to nonprofits from government grants and subsidies are very common across the world. In Europe, in countries like France and Germany, the government grants account for about 62-68% of the nonprofits income. In west Europe, the government offers even greater support as seen in Sweden, Holland and Belgium. Specifically, Netherlands gives about 90% support while in Sweden it’s more than two-thirds. Such support has led to people believing that the relationship that builds between these organizations and the government is an inherent conflict where one partner gains while the other looses.

Basically, if this was correct, then the governments of the many nations supporting nonprofits would have already cut their support or the nonprofits would have pulled out. But, the benefit of this is undeniable fact (Wang, 2000, p. 10). The government depends on the nonprofits for delivery of crucial services to general welfare of the citizens. This relationship can see the parties involved use each other’s strength to complement the other one’s weakness. Private organizations are more efficient than government in production of services while the government solves the problems of free rider. At the end of the day, government’s support facilitates expansion of humanitarian support.

Analysis

Definition and Management

Just from the definition of the nonprofits, these organizations are set up for the benefit of the community rather than to make money. Since they are exempt from taxes, they have to be registered with Internal Revenue Service section which deals with federal tax issues regarding charitable organizations (Grobman, 2004, p. 67). The eligibility is basically based on the fact that the nonprofits will offer charitable services.

Because of bureaucracy, some competing objectives come up and advocacy becomes a challenge (Handler, 1996, p. 98). Bureaucracy could suppress advocacy because of the government usually requires that professionals be included in the management of the charities. The nonprofits then tend to pursue a mission that is manipulated by the professionals at the expense of the significant services (Grobman, 2004, p. 67). For instance political advocacy is increasing in many organizations.

Basically, management skills that are in tune with civic representation also play a role in political agenda. For instance, creating civic cooperation in most cases entails assisting the community to articulate their personal and groups interests whereas promoting the strategies of connecting these interests with public needs, like proper administration and responsible politicians (Grobman, 2004, p. 69). The skills are cross-functional as they can be used for advocacy on education of the clients concerning their rights, explaining the proposed projects and communicating with appropriate government agencies concerning the position of the clients.

Sometimes the managerial skills of the professional are used for lobbying. Through this, the organizations claim that they are able to create awareness of public problems to the community and at the same time they are able to find resources of political and financial support that are critical for sustained operation (Grobman, 2004, p. 70). However, federal IRS that regulates operation of the charities forbids these organizations from squandering fortunes from their budget on lobbying. Nonetheless, as resource interdependence with the government and other agencies grows, nonprofits are seeking for ways to be more effective with the restricted lobbying activities (Handler, 1996, p. 98).

Taken together, it’s expected that the existence of the intermediary elements of management puts nonprofits in a better position for advocacy. Nonprofits are run by board of directors where the executive is also a member of the board. The theories of resources dependence hints that the managers are always seeking to control their external dependencies via strategic efforts to be in charge over the environment in which they are entrenched (Handler, 1996, p. 98).

Nonprofit theories advance two major types of resource dependence that could influence the predisposition of public charities to sponsor: overreliance on government contracts, revenues and grants and also reliance on private agencies’ support. These public charities dependence on the government is well documented and it’s from these two different lines of thought that show advocacy is influence by this. The two logics forecast increased tendency to advocate when the organization relies too much on the government.

The first reasoning is that the organizational leaders make a rational choice to work on. From this perspective, the organizational leaders strategically align their activities on the objectives in which the organization were formed in their endeavor to attain utility-maximization and self-protection. Critics have argued that charities merely use the grants to lobby for more financing. Indeed, there is some proof that nonprofits lobby the government and rally clients so as to safeguard their public financing base, expand it and otherwise attain results in the organizations interest (Handler, 1996, p. 98).

A second logic, though relatively different, it indicates that nonprofits often advocate at a higher level in cases where they are the recipients of the finances. Salamon’s partnership theory of the relationship that exist between the government and the nonprofits indicate that government support entrenches public service principles and customs like involvement by enforcing rules, constraints and responsibilities on the part of nonprofits that accept these finances. The nonprofits speak on behalf of the clients to the government when they are seeking the finances because they have greater probability of being in contact with the government.

So long as an agency is supporting a nonprofit corporation, it is in control of the charity and decides on the service that will be ventured into. This is a very undemocratic situation but in can result in a self-defeating position of reliance on the side of the poor as they offer them no choice of the resources.

Regulating the Organization

Nonprofits are regulated under federal and state governments but fundamentally under mandates by the US IRS. This is where the guidelines are clearly stated to explain particular disclosures and requirements that are necessary for the running of these nonprofits especially their functions and financing. At the state level, the office of Business of individual states does the registration. These states also require that these organizations register yearly for the licenses to solicit funds.. Furthermore the organization should carry a clause on conflict of interest in their constitution.

Dealing with the Challenge

The nonprofits and government agencies alike are faced with unmatched challenges in management ranging from the complicated structures embedded in the organizational policies. The end results of these challenges have been slowed decision-making, gratuitously high expenses, and, quite frequently, a general sense of organizational inactivity and opposition to change. The challenges here define the broader meaning of bureaucracy (Grobman, 2004, p. 78). Problems develop with time and in most cases, these challenges crop in so slowly that they mostly go unnoticed, but they accumulate into crucial barriers that hold back best performance.

With all the requirements that bureaucratization has brought about high need of professional who will be able to prepare the documents needed at the inception of these nonprofits like preparing proposals, creating the constitution and running these organizations effectively (Handler, 1996, p. 98). Paying heed to these changing demands, there are new programs being established like in the case of the Wayne State University. They university has developed a nonprofit sector program to solve this issue.

The mission of the programs is that this fastest growing sector has to have competent advocates and program managers among other professionals to guide the sector into a more industrious future (Cq Researcher 2007, p. 144). Many expect that the increasing payment packages at non-profits will draw superior talent; rather it has to a larger extent meant that these organizations are just paying more money for same amount of work. Still it also means that these organizations are just being led by over ambitious dimwits that want to push for ever expanding projects at the expense of other smaller objectives that work. The best way to settle on the projects to invest in will be those that the community deems very important for them and not the non-profits thinks are cheaper to work on or the projects that the government has directed (Cq Researcher 2007, p. 144).

The challenges facing nonprofits have been aggravated by the current economic downturn. There is also insecurity around potentially unexpected reduction of group budgets, and wider structural discontinuities being observed around the world at large. Instead of coming up with new innovations, many nonprofits are finding themselves being more bogged down at the time when they are required to be having the highest attainable degrees of performance and vivacity (Cq Researcher 2007, p. 144). This is regardless of the fact that leaders in the public sector seem to be more dedicated, unrelenting and compassionate in that they struggle to be good stewards of the properties that they manage.

What will nonprofits do to react to the bureaucracy issue and cause real change throughout the organization? It’s a misconception that nonprofits should be run like business yet there are fundamental differences that exist in their working environment. They have different way of budgeting, unique process of decision making and unique regulation guideline (Cq Researcher 2007, p. 146). Being able to acknowledge these differences is critical as they in the first place do not preclude the managers from establishing high-performance. Leaders can adapt the best commercial practices whenever relevant and they will be able to deal with the root causes of the challenges and hence more quickly find adequate solutions and eventually to elevate their performance.

Summary and Conclusion

Does bureaucracy really affect functionality of the nonprofits? Bureaucracy greatly affects nonprofits functionality, specifically the greater dependence on their funding and also the emerging trend that these organizations be managed by professionals and not mere volunteers. They are also required to adhere to some rules for accountability and this has been observed to suppress advocacy activities. From studies on these nonprofits, the conclusions drawn from them does not show significance statistic for claiming that bureaucracy has affected their functionality.

Bureaucracies of establishing a nonprofits are time consuming as the founders are required to have pre-planning of their wealth and have a board of directors established before applying for registration (Handler, 1996, p. 98). The federal government on the other hand requires that these organizations be run by a group of managers who represent a cross-section of the society.

Nonprofits maybe exempt from tax from their income and therefore they have to fill form 990 of the IRS. This form is used to report fund-raising activities and government grants among other activities of earning revenue. For consideration, the nonprofits must have a business plan so the application process is easier and valid investment. The organization is also required to have an experienced NGO director as a mentor to guide the organization to meet its objectives.

Why governments exempt nonprofits from tax? This has been a question of contention because some people accuse this special privilege for affecting the type of services that the nonprofits offer. From the old saying “the person paying the piper calls the song” or the African adage that “you have to move when another man moves as long as your hand his pocket”, many people do not believe that these nonprofits will maintain their autonomy as long as the government is the main sponsor (Wang, 2000, p. 3). On the same token, when nonprofit rely on their services charges; then the difference between profits and non-profits would be blurred. In any case, the nonprofits face a tough job in trying to retain a reasonable degree of independence except if they can attain a strong foundation of support of labor or private donors.

Basically, the best source of support that nonprofits can access is individual donation of finances and volunteering of time as this kind of support in most cases is normally given with very little or no attached strings (Wang, 2000, p. 3). If a nonprofit is able to procure great amount of support a large number of individual donors, then one of the donors, singly will not be a big threat to independence of the organization. Financial support from other charities and corporations are very different (Froelich, 1999, p. 262).

Income from donors is given with strings attached; however, when you compare financial support from commercial activities that a nonprofit can engage in, foreign donors, government subsidies and individual philanthropists, the individual donors appear to be less threatening to the independence of these nonprofits (Froelich, 1999, p. 262). Unfortunately, the support from private individual donors is very hard to find in any country today as a major source of funding.

From this paper, it’s obvious that non-profits in many countries depend on government support, the sale of their services and from foreign donations. Thus, these nonprofits face dilemmas. On the hand, private support can be good when an organization is maintaining independence, but depending on it alone cannot sustain that organization and chances are that it would not survive into the future. On the other hand, it’s very easier to acquire money from commercial activities and the government but these supports in most cases makes the nonprofits to alter their missions and character (Froelich, 1999, p. 262).

Due to the bureaucracies for government grants, then we can conclude that in no country are nonprofits fully independent. As long as they cannot raise enough money for their projects, it’s unlikely that they will be able to set their mission free of influence from outside. To ensure independence, it’s appropriate that the non-profits build their support foundation on private donors. Nonetheless it’s unrealistic that these will constitute the main revenue source, hence the only feasible solution is to reduce overreliance on single source, especially the government (Froelich, 1999, p. 266).

Reference List

Alexander, J., Nank, R., & Stivers, C. (1999). Implications Of Welfare Reform: Do Nonprofit Survival Strategies Threaten Civil Society? Nonprofit And Voluntary Sector Quarterly, 28(4): 452-475.

Ali, A. (2007). Bureaucracy and Charities: The Economic of Private Voluntary Aid, Journal of Businesses & Research, 5(2): 73-76.

Berry, J. M. & Arons, D. F. (2003). A Voice for Nonprofits. Washington, DC: Brookings Institution Press.

Brown, E. (2006). Donors, Ideologues, and Bureaucrats: The Principal-Agent Relationship between Government and the Nonprofit Sector, Biannual Conference Of The International Society For Third Sector Research, Bangkok, Thailand pp. 3-25.

Carpenter, D.P. (2001). The Forging of Bureaucratic Autonomy. Princeton, NJ: Princeton University Press.

Cq Researcher. (2007). Issues For Debate In Corporate Social Responsibility: Selections From CQ, SAGE Publishers, Pp. 144.

Froelich, K. (1999). Diversification Of Revenue Strategies: Evolving Resource Dependence In Non-Profit Organizations, Nonprofits And Voluntary Sector Quarterly, 28(3): 246-268.

Grobman, G.M. (2004). An Introduction To The Non-Profit Sector: A Practical Approach For The Twenty-First Century, 2nd Ed. White Hat Communications, Harrisburg, Pennsylvania.

Handler, J. (1996). Down From Bureaucracy: The Ambiguity Of Privatization And Empowerment. New Jersey: Princeton University Press.

Tucker, D.J., & David, H.S. (2006). “The Larger They Get: The Changing Size Distributions Of Private Human Service Organizations.” Nonprofit And Voluntary Sector Quarterly, 35(2):183-203.

Wang, S. (2000). Money and Autonomy – Dilemma Faced by the Nonprofits Sector, Civil Society,” unpublished paper, Yale university pp. 9.

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