Voluntary Organisations

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).

Voluntary Organizations: Important Objectives and Functions

In a democratic, socialistic and welfare society, voluntary organizations are indispensable and they perform a number of functions for the welfare of its members, the development of the country and integration and solidarity of the society and nation.

(i) Man is by nature gregarious. The urge to act in groups is fundamental in him. People therefore form groups and associations voluntary for their benefit as also of others with a view to lead a full and richer life as is reflected in voluntary associations formed for promotion of recreational and cultural activities, social services, professional interests etc.

(ii) A pluralistic society with a democratic system requires multitude of independent, voluntary non-government associations as buffer between the individual and the state preventing the government from developing monopoly in various fields. Voluntary organizations involve citizens in noble affairs and avoid concentration of powers in the hands of government and thus serve as power breakers. Sharing of power by voluntary group restrain government from developing monopolistic approach to organisation of services.

(iii) They enable the individuals to learn the fundamentals of groups and political action through participation in the governing of their private organizations.

(iv) Organized voluntary action helps groups and individuals with diverse political and other interests, contributes to strengthening of feeling of national solidarity and promotes participative character of democracy.

(v) The state does not have the requisite financial resources and manpower to meet all the needs of its citizens. It can therefore have the responsibility of providing them minimum needs. The voluntary organizations by raising additional resources locally can meet uncovered needs and enrich local life.

(vi) Voluntary organizations also help the state in the area which are its exclusive responsibility but for which it has limited sources and perform such functions in much better way as compared to the state organizations.

Education for example is the responsibility of the state but the educational institutions being run and managed by voluntary organizations far outnumber the government institutions and excel the latter in quality of service also in view of the flexibility, ability at experimentation, pioneering spirit and other virtues.

Same is the case in respect of the provision of health services which is again the responsibility of the state. But the hospitals sponsored by philanthropic and charitable institutions are well known for better care and concern comparison to government owned hospitals.

(vii) Voluntary organizations thus have not only a role to play ii the field of accepted state responsibilities but they can also venture into new needs, work in new areas, unveil social evils and give attention to hitherto unattended and unmet needs. They can act as sappers and miners of unfolding development revolution.

They can function as reconnaissance squads. They can be fore-runners of change and anticipate and take action to make it less painful. They can work for progress development and consequently in course of time they can help the state in extending its activities over wider areas, thus raising the national minimum.

(viii) They provide avenues for activities to those persons why do not relish participation in the activities of the state through politics and government, but organize into voluntary groups thus making their talent, experience and spirit of service available to society in bringing about changes in it with a view to meeting the needs and aspirations of the people concerned and enriching the lives.

(ix) They act as a stabilizing force by welding together people with such groups as are not politically motivated and are no concerned about the fortunes of one or the other political party i capturing government power but are above party politics and are interested in other areas of nation building and thus contribute t national integration and concentration on non- political issues.

(x) They also perform the functions of educating the members and the public at large about the policies and programmes of the government about their welfare, their right and obligations and also are in a position to offer constructive criticism in respect of wrong policies and activities of governor without any fear and with courage of conviction obliging the government to make necessary adjustments to accommodate the viewpoints of the public likely to be affected by such policies and actions as has been the experience in the case of programme concerning scheduled tribes and environment conservation and preservation.

(xi) The endeavour to meet the special requirements of specialized interests and special groups such as the aged, the handicapped, women, children, etc. which cannot be adequately met by the state for reasons of financial scarcity. Age-India and Help age are voluntary organizations engaged in the welfare programmes of the aged.

Indian Council of Child Welfare is engaged in the promotion of child welfare. The Indian Curricle for Women Welfare is working in the field of women welfare. All India Ex-servicemen Welfare Association is concerned with the welfare of the ex-servicemen. Similarly thousands of voluntary associations exist to look after the interests of the groups they represent.

(xii) They are in a better position to function to their own satisfaction as also at that of their clientele for the reason that they can identify the needs of individuals, groups and community being close to them and formulate appropriate programmes to meet them, make necessary changes and modification in the light of the experiences gained in their implementation processes, involve people’s participation, raise necessary funds and win public confidence and cooperation by human touch, human warmth and sympathy which the bureaucrats in governmental organization are not capable of.

In sum, voluntary organizations main functions comprise giving concrete expression to the fundamental right of freedom of association, identifying the needs of individuals, groups and communities and initiating projects and programmes to meet them on their own or with the grant-in-aid of the government, sharing the responsibility of the state in providing minimum needs of the citizens, covering the areas of uncovered and unmet needs, preventing the monopolistic tendencies of the government, providing opportunities to people imbued with the spirit of service and dedication to organise themselves to promote public welfare, educating citizens about their rights and obligations and informing them about the policies and programmes of the government contemplated and initiated for their welfare, mobilising public support through publicity campaigns, raising functional resources through contributions and donations and finally organising activities of non-partisan and non-political nature for wellbeing of the society, enriching the lives of citizens and progress of the nation.

Types of Voluntary Organization

If you want to take on the role of owning, running and managing a local playing field, recreation ground, sports club or similar facility, it is important that you consider all the organizational options available, consider the different opportunities, risks and liabilities, and where appropriate take independent advice.

When setting up a community organization there are several possible legal structures. Deciding which type of organization is most appropriate is essential as each structure has its own advantages and disadvantages and will influence how far the asset can be used, developed and protected in the future.

The different types of organizations that can be used are grouped as follows: an Unincorporated Association, a Trust, a Limited Company, a Community Interest Company (a company for social enterprise) and an Industrial and Provident Society (a co-operative for social enterprise)

1. An Unincorporated Association

This approach may have been the initial structure for campaigning to protect a facility or a space in the first instance. It tends to involve a small group of members with short-term goals and is appropriate where there is no intention to employ staff or acquire property. An Unincorporated Association is relatively quick and cheap to set up. Unless an organization is applying for charitable status or registration as a Community Amateur Sports Club (CASC), no other agency need be involved. There are no fees to pay unless legal advice is sought on drawing up a constitution.

However, an unincorporated association has no separate legal existence and remains for most purposes a collection of individuals. Any property or contracts would have to be held by individuals on behalf of the group, and any legal proceedings taken against the group would, in reality, be against the individuals themselves, making them personally liable. The issues surrounding liability can be quite complex and you will need to be very clear about the risks involved.

2. A Trust

A Trust can be set up to manage land and property and to receive money for a particular purpose for the benefit of a wider community. They establish a formal relationship between the donors of money or property, the Trustees (normally three) who become the nominal owners of the trust property and the beneficiaries – the people who will benefit from the trust. Trusts can be set up quickly and cheaply. Trusts are non-democratic organisations as they do not tend to have a membership structure although trustees can agree to report regularly and consult with a wider group of people. Trustees can be personally liable for contracts entered into on behalf of the trust and are not protected from personal liability. You can, however, take out insurance to provide some financial protection.

3. A Limited Company

A company structure is an increasingly popular choice for voluntary and community organizations.

It is very appropriate if you intend to be managing staff, land, contracts and/or significant amounts of funding. A company limited by guarantee is an incorporated organization. This means that it has a separate legal identity distinct from that of its members. This legal structure limits the liability faced by Directors in the case of insolvency, except in cases of negligence or recklessness. This is the most flexible legal arrangement but the main constraint is that shares cannot be issued.

You will need to register the company with Companies House and company law must be abided by.

4. Community Interest Company (CIC)

A Community Interest Company is limited by guarantee or share issue with several added features such as a community interest test, an asset lock and a cap on dividends. The legal form gives greater flexibility than charitable status but emphasises public benefit over private profit.

Each CIC must specify the community that is intended to benefit from any profits made by the company (this could be as wide as all the residents of a defined geographical area) and the CIC regulator must approve this. The asset lock enables capital gains to be directed to the specified community and the dividends cap limits the amount of profit private investors can take out of the business.

5. Industrial and Provident Society (IPS)

An IPS is a trading organization that operates as a co-operative either for the benefit of its members or the wider community. An IPS is usually funded by share capital, but this takes a different form to limited companies. The value of the shares is fixed and does not go up and down with the value of the organization.  An IPS is the only vehicle that can issue shares on a low-cost basis. Buying a share confirms membership and decisions are taken on a one-member-one-vote basis (regardless of number of shares owned) and there is an upper limit on the cash value of shares that can be held by one individual. IPSs are regulated by the Financial Services Authority (FSA).