Not-for-profit Organisations (AQA GCSE Business)

Charities

• Charities exist to provide support to those in need, promote a particular cause, and advance the well-being of society

• They have a specific purpose that is defined by law and must follow 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: Examples of Global Charities

Charities need to have a specific purpose, related to areas such as health, education or improving living conditions

Evaluation of Charities

Social Enterprises

• A social enterprise is a business that has the primary purpose of creating social or environmental impacts, in addition to generating profits

• Cooperatives are a common form of social enterprise

  • They are owned and controlled by workers or customers (often called members) who share profits, contribute to key decisions and have the right to elect directors

Objectives of Social Enterprises

• Butterfly Books is a social enterprise that publishes children’s educational books in the UK

  • Its aim is to 'work to educate, inspire and entertain children, aiming to change future generations by reducing gender bias in job roles'

  • A recent book entitled 'My Mummy is an Engineer' challenges gender stereotypes

Evaluation of Social Enterprises

The Public Sector

• Public sector firms are owned and controlled by the government and are usually funded through taxation

• Their main goal is usually to provide services such as education, healthcare or emergency services that may not be provided by businesses

Diagram: Examples of Public Sector Services

Hospitals, schools and emergency services are often partly or fully provided by the public sector 

• Public sector organisations operate on a local, regional or national government level

  • E.g. Transport for London provides local transport in the London region, whilst the National Health Service (NHS) operates across the whole of the UK

•  Governments retain ownership of organisations in the public sector for several reasons:

  • They are strategically important to the country, such as defence, public broadcasting or justice systems

  • They provide essential services such as water, electricity supply or emergency services

  • They are merit goods that may not be provided in sufficient quantities by private businesses, such as education or health services

  • Some public sector organisations were once owned by private individuals and have been nationalised to ensure their survival

    • E.g. In 2008, the UK government nationalised Northern Rock, a bank which was on the verge of collapse as a result of the global financial crisis

• Public sector organisations are funded by central and local governments, but some may charge a fee for selected services 

  • E.g. The NHS is free at the point of use for British citizens, but they must pay for medical prescriptions, some procedures and parking on hospital premises

Evaluation of Public Sector Organisations