Voluntary Organization




Voluntary organization is a generic term used to refer to a specific type of organization, sometimes also referred to as nonprofit organizations, NGOs (non government organizations), third sector organizations, and civil society organizations. Each of these terms reflects a slightly different emphasis. For example, the common definition of a nonprofit is ”an organization whose goal is something other than earning a profit for its owners. Usually its goal is to provide services” (Anthony & Young 1990). The definition emphasizes the nonprofit aspect of voluntary organizations but does not distinguish between other organizations that might not be profit seeking, such as state run or government organizations. Similarly, NGOs can technically refer to private for profit organizations as well as voluntary organizations, although the term is usually reserved for large international nonprofit organizations (which nonetheless may earn a profit from some aspects of their operations, such as, for example, the Bangladesh NGO BRAC).




The term voluntary, as the name implies, emphasizes the fact that citizens freely form these organizations, and thus they are autonomous, independent of both government and the market. The term is often taken to refer to the presence of volunteers within nonprofit organizations, although many voluntary organizations are more dominated by professional staff than volunteers. Finally, these organizations are often identified as being independent of both the state and the market, belonging to a third sector or to civil society. As some scholars have argued, the formation of voluntary organizations may occur as a response to the failure either of the market (in providing a low cost service) or of the state (in providing a service for minority needs) (Hansmann 1987). Indeed, service oriented nonprofits can be found in fields as diverse as health, education, sport and recreation, social services, and religion.

More recent scholarship has focused on the positive attributes of nonprofits, for example that voluntary organizations provide a ”school for democracy,” or a form of community mutual support as an expression of social capital (Putnam 2000). Many, though by no means all, voluntary organizations are embedded in social movements that generate new collective social responses to social, economic, or environmental issues (Melucci 1988). International scholar ship has also emphasized the variable and complex nature of voluntary organizations, which makes it difficult to identify a set of characteristics that serve as essential criteria for all such organizations.

Voluntary organizations vary greatly in size. The great majority in all countries are small, relying entirely on the voluntary labor of their members. These are grassroots organizations, often with strong traditional roots, but without any formal legal structure, particularly in traditional village societies. Other voluntary organizations are very large indeed, with a national or international reach, with thousands of volunteers and several hundred paid employees (Salamon et al. 1999).

Despite the diversity, there are several characteristics of voluntary organizations that generally set them apart from other organizations. Foremost is the nonprofit distribution principle. Voluntary organizations may make a profit, but that is not their primary purpose. Profits may be used to enhance or expand services; they may not be distributed to individual share holders. This fundamental principle has implications for internal accounting and external tax and legal considerations. It also means that, unlike business entities, the bottom line cannot be used as a measure of performance. What does count is the mission of the organization. The mission of a nonprofit defines the value of the organization to society and creates the organization’s purpose, and so it becomes the measure that must be used to evaluate performance (Moore 2000).

Second, voluntary organizations do not normally create a direct revenue stream, and thus remain dependent on other sectors for financial resources, through corporate sponsorship or government funding, or else on the wider public for donations. Some organizations have attempted to escape the uncertainty that these dependent relationships engender by moving to a user pays or membership fee basis, or by developing a profit generating arm of the organization to cross subsidize the nonprofit arm, thus leading to complaints of unfair tax advantage by for profit competitors. Volunteer labor is often a major resource for voluntary organizations, but is seldom accounted for as such.

The form of human resources is often quite different in voluntary organizations. Volunteer labor, including the voluntary overtime of paid professional staff, often underwrites the performance of the organization (Salamon et al. 1999).

Professional staff typically accept up to 25 percent lower salary for the privilege of work ing in a voluntary organization (Preston 1990). Staff are primarily motivated by the mission/ value base of the organization rather than by personal rewards (Moore 2000). As such, human resource policies must be designed accordingly.

Given that the organization is voluntary, the forms of governance are likely to be distinctive, being controlled by stakeholders who are citizens rather than shareholders or delegates of government instrumentalities. There are, however, no specific ideal forms of organizational structure or governance. Historically, voluntary organizations have experimented with various forms of dispersed or flat structures designed to maximize the opportunities for participatory democracy. These include variations of the collective model, the cooperative model, and the community management model, all of which apply the subsidiarity principle, in which decisions are made by those most affected by the outcomes of the decision.

Those voluntary organizations seeking government funding or corporate sponsorship are particularly vulnerable to the impact of the isomorphic assumptions of their donors (DiMaggio & Powell 1991). That is, funding bodies tend to be suspicious of organizations that do not look like them. For instance, when organizations are required to incorporate to obtain legal status, or as they increase in size and complexity, thus requiring more formal procedures for decision making and accountability, they often have to take on the attributes of more formalized, standardized, and centralized organizations to be seen to be acceptable. As a result of these processes, many voluntary organizations acquire large bureaucratic structures and hierarchical systems of accountability, overseen by formal boards of management. Within this corporate model, there is increasing emphasis on the voluntary organization being seen to be run as an effective and efficient business.

A major preoccupation in nonprofit texts and scholarship journals over the past 15 years has been the issue of “governance” and the relationship between the CEO of the voluntary organization and the board of management. Boards comprise voluntary people with responsibility for the governance of the organization.

The functions of boards are variously defined (Harris 1996) as: ensuring accountability; employing staff; formulating policy; securing resources; and acting as ”boundary spanner.” In fact, there is considerable role ambiguity and potential role conflict between CEO and chair (Otto 2003). There is also enormous variation in the form of governance adopted within the sector. On the one hand, the board carries ultimate legal responsibility under most forms of incorporation, being designed to determine the overall direction of the organization, to represent the interests of the wider constituency or member ship, and to monitor staff compliance. On the other hand, board members may well lack the time, detailed knowledge, or expertise to carry out these tasks, and may see themselves rather as a supportive, ”rubber stamp” of management. The reality in many organizations is one of interdependence or partnership, in which both staff and board perform a variety of functions in relation to each other, and as negotiated according to the specific skill mix of both.

Balanced against the concern with boards and CEO behavior, there has also been something of a counter revolution within voluntary organizations over the past five years, leading to a greater demand for participation, reverse accountability, and constituency responsiveness. These countermoves have been driven by several global trends, notably the downsizing of government, the rise in the demand for voice by members of civil society (e.g., with formal representation within United Nations deliberations), and the recognition of the importance of social capital. Social capital as a concept has gained prominence through the work of Putnam (2000); while the concept is still contested, it highlights the importance of social resources (networks, values, and trust) as opposed to economic resources in developing a strong community and a strong organization. As a consequence of neoliberal public policies emerging to steer many late modern capitalist economies, governments have withdrawn from direct welfare provision and transferred increased responsibility for welfare service delivery to voluntary organizations (Nowland Foreman 1998). At the same time, government funding bodies have attempted to institute increased surveillance and compliance mechanisms on the ways in which voluntary organizations perform these services. Yet there are also many new advocacy organizations being formed in response to the perceived loss of welfare services and the greater inequalities generated by global economic reform, such as those negotiated by the World Trade Organization and World Bank (examples include CIVICUS and the Social Forum). Right wing think tanks (often supported by conservative neoliberal governments) object to these advocacy organizations having a voice on the grounds that they have a very limited constituency (though they may claim to speak for the public good) and/or that they have poor forms of representation and accountability. Indeed, these accusations have triggered new debates within the third sector academic community (ISTR conference, 2004) concerning the appropriate forms of democratic action within voluntary organizations and the forms of accountability and transparency required.

After some 15 years of neoliberal economic reform, with its exclusive focus on economic growth at the expense of social justice and the environment, many nations are now identifying serious fallouts in terms of increased social problems (decreased services and populations in rural towns, youth disaffection and unemployment, rising rates of suicide and depression among some demographic categories, and so on). There is also an increased concern about issues of environmental degradation and global warming. There is an emerging recognition that the global preoccupation with economic growth has occurred at the expense of the social infra structure and the environment. There are many calls for a reconciliation of the social, environmental, and economic imperatives. In this context, the work of Putnam (2000), in particular, has identified the crucial role of civil society organizations in generating social capital and identifying potential solutions to social and environmental problems. Civil society organizations are thus the principle base for active citizenship. They cannot perform that function without high levels of participatory and deliberative democracy, both within and between organizations. The pressure is now felt to find new organizational forms and processes beyond the bureaucratic or corporate model of governance.

References:

  1. Anthony, R. & Young, D. (1990) Characteristics of Nonprofit Organizations. In: Gies, D., Ott, S., &Shafritz, J. (Eds.), The Nonprofit Organizations: Essential Readings. Brooks/Cole, Pacific Grove.
  2. Di Maggio, P. & Powell, W. (1991) The Iron Cage Revisited: Institutional Isomorphism and Collective In: Powell, W. & Di Maggio, P. (Eds.), The New Institutionalism in Organizational Analysis. University of Chicago Press, Chicago.
  3. Hansmann, H. (1987) Economic Theories of Nonprofit In: Powell, W. W. (Ed.), The Nonprofit Sector: A Research Handbook. Yale University Press, New Haven.
  4. Harris, M. (1996) Do We Need Governing Bodies? In: Billis, D. & Harris, M. (Eds.), Voluntary Agencies: Challenges of Organization and Management. Macmillan, London.
  5. Melucci, A. (1988) Social Movements and the Democratization of Everyday Life. In: Keane, J. (Ed.), Civil Society and the State: New European Verso, London, pp. 245-60.
  6. Moore, M. (2000) Managing for Value: Organizational Strategy in For-Profit, Nonprofit, and Governmental Nonprofit and Voluntary Sector Quarterly 29(2), Supplement. Sage, London,
  7. Nowland-Foreman, G. (1998) Purchase-of-Service Contracting, Voluntary Organizations, and Civil Society: Dissecting the Goose that Lays the Golden Eggs? American Behavioral Scientist 42: 108-23.
  8. Otto, S. (2003) Not So Very Different: A Comparison of the Roles of Chairs of Governing Bodies and Managers in Different Sectors. In: Cornforth, (Ed.), The Governance of Public and Non Profit Organizations: What Do Boards Do? Routledge, London.
  9. Preston, A. (1990) Changing Labor Market Patterns in the Nonprofit and For-Profit Sectors. Nonprofit Management and Leadership 1(1): 15-28.
  10. Putnam, R. (2000) Bowling Alone: The Collapse and Revival of American Community. Simon & Schuster, New York.
  11. Salamon, L. et al. (1999) Global Civil Society: Dimensions of the Nonprofit Sector. Johns Hopkins Center for Civil Society Studies, Baltimore.

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