Where Charity and Business Meet
November 21st, 2006 by Lynn Eakin
For at least a decade voluntary sector organizations have been pushed to adopt more “business” practices. In some sectors this has lead to the opening up of what were traditionally voluntary sector fields to for-profit organizations. In other areas funders have tried to implement “business” practices in their funding agreements.
Unfortunately, the introduction of business practices into voluntary sector funding was undertaken at a time when government funders were seeking to reduce and contain their spending. As a result, cost containment, cost reduction and efficiency strategies were given priority focus to the neglect of other business practices that might benefit and build the contractor organization. The process has been a “cherry picking” of business and charitable practices.
The resulting hybrid business/charity model is compared to the conditions under which businesses operate. The playing field is not level and the hybrid model is not working well for many voluntary organizations and their clients. A new voluntary sector funding model is required that will provide for organizational excellence and sustainability over the long term.
