Stated purpose and fields of action
A civil-society organisation (also called a non-profit, NGO, trust, association or foundation) is formed by people of their own free will for a stated purpose: an aim written in its rules (statutes), such as "teach poor children to read". It is independent of the government and does not share profit with owners or members.
Fields of action are wide: health, education, environment, culture and sport, help for the poor, human rights, and more. Some groups serve their own members (a sports club, a trade union); others serve people outside (a charity). The purpose guides every choice, so a clear purpose is the first part of strategy.
Securing people and funds
People. Many non-profits depend on volunteers, who give time without pay, plus a few paid staff. Strategy asks: how do we find, train and keep volunteers? Good ways: a clear mission, thanks and respect, flexible hours and real responsibility.
Funds. Money comes from three main sources: donations (from people and firms), grants (from government or foundations, often for a project) and own income (fees, shop sales, events). Relying on one source is risky, so a good strategy uses a mix. Fundraising must be honest, and donors must be told how money will be used.
Developing the organisation
Successful non-profits often want to grow, to help more people. They can open branches, start new programmes, form partnerships with other groups, or use digital tools to reach people. But growth has costs: more rules, more staff, more money to find.
So they need professional management: a clear plan, a board that checks the leaders, training for staff and volunteers, and a way to measure impact (how many people were helped and how well). Growth is good only if the quality of help stays high and the purpose does not drift.
Transparency
Donors and the public give trust and money, so they have a right to know how both are used. Transparency means publishing an annual report and accounts that show income, spending, how much goes to the purpose and how much to running costs (called overheads). Many countries require registration and audits by an independent accountant.
Openness protects against fraud, wins more donors and keeps the group faithful to its purpose. A non-profit that hides its accounts quickly loses trust. Remember: non-profit does not mean no money. It may have a surplus, but the surplus is put back into the purpose and never paid out as profit.
Try it
In the 3D: in step 6, set donations to 80 and the share on the purpose to 100%. Then lower the share to 50%. Predict first: will people helped fall by half?
At home: find a local NGO or a charity website. Look for three things: its purpose, how it gets money, and whether it publishes a report. Does it pass the "glass box" test?
Key formulas and definitions
- Non-profit = stated purpose + no share of profit to owners
- Resources = people (volunteers + staff) + funds (donations + grants + own income)
- Money spent on purpose = total funds × share on purpose (%)
- Transparency = annual report + accounts + audit
- Surplus is reinvested in the purpose
Worked examples
1. Name two differences between an NGO and a private company.
An NGO has a social purpose and does not share profit; a company aims at profit for owners. An NGO uses donations and volunteers; a company sells products and pays wages.
2. An NGO gets 200 units in donations and spends 80% on its purpose. How much is spent on the purpose?
200 × 80 / 100 = 160 units.
3. In the same case, one person is helped for every 20 units spent on the purpose. How many people are helped?
160 / 20 = 8 people.
4. Why is relying on one big donor risky?
If that donor leaves, funds can collapse. A mix of donations, grants and own income is safer.
5. An NGO ends the year with a surplus of 50 units. What should it do with it?
Put it back into its purpose (for example, buy books or train volunteers). It cannot pay it out as profit to members or owners.
Common mistakes
- Thinking non-profit means "no money allowed". It can earn income and have a surplus; it just cannot share profit.
- Believing volunteers cost nothing. They need training, care and organising, which cost time and sometimes money.
- Treating all funds as the same. Grants often come with conditions; donations may be free to use.
- Hiding accounts to avoid trouble. Secrecy destroys trust and donors.