Essay questions on national income, inflation and public finance

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Non-profit social enterprise

Operates In The Private Sector(private voluntary association)


“Private organizations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services or undertake community development” – UN definition

The aim: to support the cause that is considered socially desirable.

Some Are Concerned With A Single Issue(SavetheWhales)orwithaboarderspectrum(Greenpeace).Others
may be apolitical, others political (Amnesty International).

The common element of these is that they are not run by a government

CHARITIESNon-profit social enterprise

Provides Voluntary Support For Good Causes(protectionofchildren,animals,environment)– although some people will be paid for their work, as managers.

Keyfunction:raisingfundsfromindividualsandorganizationstosupportacausethatis beneficial to society

They need to catch attention of donors

Some Charities Are Single-event charities that provide(forexample)emergencyaidforspecific
natural disasters or war. Other charities focus on a single issue: Save the Children.

As with regular NGOs charities may be apolitical. Others can be partisian or have particular preferences. The idea is that it is not run by any government, and it operates in the private sector of the economy.


Profits are not generated:they generate surpluses used to advance their social purposes.

Donations are important:these businesses cannot relay on government funding or other forms of their income, so a large part of their income comes from donations. People who want to help and believe in their cause (from individuals or other organizations).

There is unclear ownership and control: who owns a charity? Who should decide things? The issue of compensation is especially complicated when the NPO is huge. Its management requires the same skills as a regular for profit company. There are many questions regarding payments in these positions, which each NPO handles as it thinks better or as it can manage.




They help people or causes in need

They can innovate

Lack of control but intense lobbying can lea to socially undesirable goods

They can foster a philanthropic spirit in the community

Employees of nonprofits have a passion that sometimes ill serve the organization or its cause

They can foster informed discussions in the community about allocation resources

Funding can be irregular



Social benefits: they help society in some way

Bureaucracy: registration, government restrictions, processes, etc.

Tax exemptions: as non-profit orgs, they are except of corporate taxes. They also have other benefits.

Disincentive effects: the lack of a profit motive can cause problems.

Tax incentives for donors

Charity fraud: financial activities must be recorded and reported.

Limited liability: charities can register as limited companies to protect the interests of employees and managers.

Inefficiencies: if there are any debts, as limited liability company charity, no one gets the blame. What happens with the donors' money and the cause then?

Public recognition and trust

Limited sources of finance


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