Types of Non-Profit Social Enterprises (DP IB Business Management)
Revision Note
Non-profit Social Enterprises
A non-profit social enterprise is an organisation that combines the characteristics of both a non-profit organisation and a social enterprise
Non-profit social enterprises pursue a social or environmental mission while using business strategies to generate revenue and achieve financial sustainability
These organisation rarely make a surplus or profit
Two of the main forms of non-profit social enterprises are non-governmental organisations (NGOs and Charities
Non-governmental organisations (NGOs)
NGOs operate locally, nationally and/or internationally and are independent of government
These are typically voluntary, community-based organisations which do not aim to make a profit but seek to meet a need or provide a service
NGOs are typically financed by a combination of government funding and donations from businesses or private individuals
With a community based emphasis, they are able to
Engage in small scale projects, giving control to community stakeholders
Draw on local skills
Encourage sustainability & remove the need for aid
Tackle environmental sustainability using local knowledge & resources
Lobby governments to support their cause
NGOs have played a major role in many LEDCs and their aid often comes with fewer conditions or expectations than that provided by overseas development agencies
Examples of NGOs include Oxfam International, Save the Children International and Amnesty International
Charities
Charities have a specific purpose defined by law and are subject to strict regulations governing their activities
They primarily rely on donations from individuals, corporations and governments and often actively fundraise and engage in campaigns to attract donations
Diagram: a selection of international charities
The terms NGO and charity are often used interchangeably and there are variations in their definitions and usage between countries or regions
An Evaluation of Charities and NGOs
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Examiner Tips and Tricks
Make sure that you fully understand the differences between charities and NGOs.
Whilst they are both types of non-profit organisation, charities are regulated by national Charity Commissions and have a relatively narrow scope of operations.
NGOs can also be charities - but not always. Oxfam and Médécins sans Frontières are both registered as charities in several countries but operate as NGOs in other countries around the world, particularly where the domestic third sector is underdeveloped.
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