Topic > Non-profit organizations as a contractual mechanism

Non-profit organizations represent, on a broader level, institutions of social responsibility aimed at creating social value. Through his theory of public goods, Weisbrod (1974,1977) defined NPOs as private providers of public goods that satisfy residual unmet demand from government entities, i.e. non-governmental organizations. However, according to the theory of contractual failure developed by Nelson and Krashinsky (1973, 1977), non-profit organizations combat the information asymmetry existing between consumers and producers of specific services. This is because NPOs are not for-profit entities that have an economic raison d'être, so it is unlikely that the quality of service can be reduced to increase profits. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Contract failure theory suggests that nonprofits arise where normal contractual mechanisms do not provide consumers with adequate means to control producers. The achievement of their social mission by non-profit organizations constitutes the reason for their existence, and the commitment and passion spent to achieve this goal represent the organizations' main resource. The mission is the reason for being for which the organization was born and operates. It is not simply a declaration of intent and purpose, it represents the scope of action within which the organization can move. The mission defines both the starting point and the arrival point of the ONP, and the maximum degree of involvement of an interlocutor is reached when for him the mission becomes something to engage in, something worth doing. Working on the mission is useful for several reasons, including: giving clear direction to the organization; it can be a sharing tool with stakeholders and a starting point for defining strategies; avoid wasting resources on non-essential objectives; adopt a common language and values ​​that increase integration. Most nonprofit organizations rely on third parties, such as corporations, private donors, governments and foundations, to provide them with the financial resources they need to operate. Funds are, therefore, limited resources that depend on fundraising initiatives and donations from NPOs. Because donors may be considered “fans” of the NPO's work, mission, cause, and therefore the organization as a whole, many of them may appreciate being involved on multiple fronts. Furthermore, donors who are also volunteers, or active in some campaigns carried out by the organization, have a fairly low level of “churn” since they feel part of it. Small and medium-sized nonprofits rely heavily on volunteers, who can be the heart of the organization. As underlined by ..., to give continuity to the volunteering action, volunteers should be provided with "placement in a job that matches their skills and passions, supervision and clear communication, good orientation and training, development opportunities, etc." Staying up to date and catering to volunteers' motivations, needs and interests allows the NPO to better retain them, and this can be achieved through informal chats, observations, short surveys and formal feedback sessions. Identifying the motivations of each volunteer allows us to understand which assignment is most suitable, thus encouraging their commitment, and to adapt, where possible and necessary, the organizational context and working methods. Once the ONP's mission and values ​​are shared, volunteers are encouraged to stay”.