Non-Profit Organizations in Tanzania

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Background of the study

Public and religious organizations are voluntary communities which are founded on shared interests and needs. As non-profit organizations (NPO), they can only engage in entrepreneurship if it meets the statutory goals and aims to achieve them. Members of public and religious organizations do not retain the rights to property and membership fees transferred by them to these organizations (Charles & Nawe, 2017). Members of public and religious organizations are not responsible for these organizations’ obligations, and they, in turn, are not responsible for the responsibilities of their members.

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Leading countries of the world are stepping up activities to implement the concept of social partnership. Adequate legislation has been developed to realize the comparative advantages of NPOs (Dehardt et al., 2018). The practice of solving social issues by non-governmental, non-profit organizations has been created. The production of social and other services is being transferred from the state to the non-profit sector.

At the same time, the bodies of state power retain their controlling functions. Socio-economic innovations such as trust zones and check financing systems have been successfully implemented. Information about the activities of the non-profit sector is open to the general public (Jivani, 2010). Analytical work is continuously carried out on such an essential resource of the non-profit sector as social capital. Detailed statistical materials on the activities of NPOs are published.

The non-profit sector contributes directly and indirectly to the global economy. Direct contributions are related to the fact that the non-profit sector is a sphere that provides employment and self-employment to the population (Assad & Goddard, 2010). In terms of work, the non-profit sector is in many ways similar to small businesses in its functions. Still, it provides social and psychological support to its employees and volunteers. It is more active in engaging the socially vulnerable part of the population in economic activity: disabled people, parents of disabled children, unemployed women of older ages (Mbelwa et al., 2019).

NPOs buy and produce goods and services necessary for their actions, thereby stimulating aggregate demand and increasing aggregate supply. At the same time, NPOs operate in niches that, in the natural state of affairs in a free and competitive market, would not interest the commercial sector since they give too low-profit margins.

One of the most important and complex challenges facing the leaders of non-profit organizations is managing financial flows. Religious institutions primarily assist in a spiritual nature, rather than material. Therefore, competent budget management is essential for institutions of this type. With a competent division of responsibilities and financial planning, religious organizations can freely continue their educational activities, while simultaneously implementing financial projects. To achieve this goal, the organization must first plan its actions for maximum efficiency.

Statement of the Problem

Religious organizations have two differences from most secular organizations: firstly, they are motivated by religious beliefs and, secondly, the people on whom they rely have interests that are not limited to humanitarian issues—for a Jew, a Muslim, and a Christian, believing means, among other things, helping the poor and the outcast. The legacy of a long-standing missionary tradition in Christianity, which today is criticized for aiding colonialism, is the church’s widespread involvement in social services for the population – especially in areas such as education and health care. As William Headley of Catholic Relief Services argues, faith-based organizations have been and continue to be a significant driver of humanitarian progress globally (Green et al., 2012).

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In the United States, the Catholic Church is the largest non-government provider of humanitarian services to low-income families. A third of all AIDS patients on the planet gain access to treatment through the Catholic Church.

Christian non-profit organizations operate in almost every country in the world. Unlike other religions’ NPOs, which tend to help members of their communities, Christian organizations try to help people without taking into the consideration their beliefs. There are significant differences between those who do not confuse humanitarian aid and evangelism within the Christian community and those who view humanitarian work as part of their missionary work. For this and other reasons, some evangelical groups’ humanitarian work has been criticized by traditional faith-based organizations committed to respecting the beliefs of those they help (Burke & Ngonyani, 2004). The activities of evangelical groups that combine relief with missionary work can have implications for all religious organizations.

The process of reforming the legislation on legal entities involves searching for effective rules governing certain aspects of commercial legal entities’ activities and a conceptual update of civil legislation on non-profit organizations. Specific steps are being taken in this direction. However, it should be noted that we mainly mean commercial organizations when it comes to improving the legislation on legal entities. Attention is paid to non-profit organizations on a leftover basis, most likely, based on their lower significance for property turnover than commercial legal entities.

Research objectives

The study aims to analyze the financial difficulties and openness of non-profit organizations’ activities to identify the main reasons for the lack of transparency and ways to eliminate them. To achieve this goal, the following tasks were set:

  • study the principles of openness and clarity of the activities of non-profit organizations
  • identify the main barriers to adherence to the principles of openness and transparency in the activities of NPOs;
  • to determine the level of information accessibility of NPOs by monitoring the websites of socially oriented non-profit organizations.
  • identify methods to improve transparency.

The object of this research is the financial activities of non-profit organizations. The subject of the study is the methods of non-profit organizations’ management due to their religious beliefs.

Research questions

When writing the work, the following hypotheses were put forward:

  1. The main difficulty of the financial activity of non-profit organizations is complete dependence on external sources of money such as government and private donations.
  2. The state provides financial support to the most open and transparent NPOs with high information availability.
  3. Many non-profit organizations face financial difficulties due to insufficient attention to their problems on the part of the state and a low level of people’s involvement in activities.
  4. The main financial difficulty for the activities of non-profit organizations is the tax system. Depending on the tax collection principle, an NPO’s activities may be carried out for illegal actions or be subject to additional fees and be ineffective (Massele et al., 2007). In this context, the transparency of NPO activities is critical.

The scientific novelty of this study lies in applying a new, recently developed methodology for studying the openness of non-profit organizations’ activities, which is essential for detecting the issues connected with financial activity.

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Research method. When studying non-profit organizations’ sites, to calculate the level of their transparency and openness, web content analysis is used, which involves analyzing the content of sites on the Internet to determine the presence or absence of specific parameters of transparency openness. Moreover, the study used the method of interviewing respondents by random sampling.

Significance of the study

Openness in the activities of socially oriented non-profit organizations is becoming very relevant today. Moreover, the effectiveness of fundraising, NPOs’ actions, and how much the population can trust them depends on the openness and transparency of NPOs. If the organization is truly transparent, it is much more effective in money management without any issues with its religious beliefs.

The choice of this topic is since the problem of transparency and openness of socially oriented non-profit organizations is relevant today, research on this topic has scientific and practical significance, and the question, today, has not been thoroughly studied, which makes it possible to research a new point of view and using a different methodology. In addition, the problem of insufficient transparency in NPOs exists not only in Tanzania but all over the world.

Literature review. Theoretical

Burde, Rosenfeld, and Sheaffer (2017), in their work, consider the problem of uneven distribution and misuse of investment funds within the framework of non-profit structures’ activities. In cases where non-profit associations receive insufficient funding from the state and municipal departments, the management of foundations is forced to spend money maintaining the structure of the structure instead of investing in well-defined projects. Consequently, the innovation process and the community’s overall benefits are not felt by the public in the short term. The authors give examples and historical justification of this phenomenon and also formulate ways to solve this situation.

Hommerová and Severová (2019) investigate the problem of fundraising in the framework of the activities of non-profit organizations. In the course of the work, the authors conclude that fundraising is still perceived by society from an opposing point of view (Hommerová and Severová, 2019). Given the nature of non-profit organizations’ activities, they can receive the money for implementation from the state within the framework of development programs and collect voluntary donations online or through organizing an event. In the paradigm of public consciousness, the attitude towards fundraising is perceived rather negatively. Overcoming this stereotype will help non-profit organizations to carry out their activities more effectively.

Malahi (2019) refers to the increased media interest in emergencies, coming with increasingly stringent donor reporting requirements, and has forced international NPOs to approach their programs more professionally. For churches-affiliated institutions in industrialized nations, when choosing partners, the local humanitarian organization should be associated with the Church and its ability to deliver tangible results and meet increasing reporting requirements. As a result, church institutions in industrialized countries increasingly chose local secular organizations and interfaith NPOs as partners rather than churches. Naturally, it raised questions from many local churches and church organizations, accustomed to their support over the years of cooperation.

Empirical

Globalgiving.org is one of the most informative sites for the location and activities of non-profit organizations. A sample of many respondents and the structures they represent will be required to conduct a study (King, 2017). This site allows you to learn more about the various non-profit associations that have representative offices or continuously operate in Tanzania. Using information from this resource will enable you to take into account organizations of different specifics and directions.

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Research design

CompassPoint and the Evelyn & Walter Haas Jr. Foundation (2017) developed and tested two versions of the e-survey with input from a national advisory committee. One of the performances was intended for leaders of non-profit organizations (Bryce, 2017). The second version was designed for senior employees of various foundations working in non-profit organizations. CompassPoint, Haas Jr. Foundation, and 23 partner organizations distributed the survey electronically from May to July 2012 to their customers via email, social media, and website posting. The survey received 2,722 responses: 1,852 from senior development staff and 870 from executive directors.

Data was collected and analyzed using SPSS statistical software from CompassPoint in San Francisco, California. Focus Groups CompassPoint also conducted 11 focus groups with CEOs, senior development officers, and board members as part of this study. Fifty-three participants took part in the focus group in person or by conference call in the summer of 2012. Participants were from four US regions: the San Francisco Bay Area, the Greater Washington area, St. Louis, and Nashville. Their responses are critical to communicating the data collected through the surveys fully, and they are cited throughout the report. The same method will be used within this research as well due to the its versatility and convenience.

Description of the study area

Today, the development of information and communication technologies plays a vital role in the interaction of all social sectors. After analyzing the sites’ content, one can compare how open or closed a particular non-profit organization is, how information about its activities is available to the public, and how transparent its financial activities are (Hopkins, 2017). In addition, the analysis of sites allows you to give an overall assessment and calculate the index of openness of a non-profit organization to society as a whole.

The essence of this technique is to study and assess the information content of NPO sites and their technological properties. The most important assessment tool is calculating the coefficient of information availability (ICA), which characterizes the level of information openness and transparency (Khadra & Dele, 2020). The ICA allows us to conclude the extent to which data on the activities of NPOs are presented according to specific parameters.

However, it cannot be said that the study confirmed the second hypothesis about the existing relationship between the level of awareness of an organization and its transparency and openness. For example, organizations with the same coefficient of information availability (ICA) equal to 44.5 have completely different indicators for the number of requests – 0 and 345, respectively (Zietlow et al., 2018). Organizations with an ICA equal to 76.2 have 2420 and 228 requests per month (Obilor & Amadi, 2018).

Therefore, it is impossible to assert that the level of openness and transparency of a NPO depends on its popularity. No relationship in the value of these two indicators is observed. In addition, for accuracy, the data were processed in the statistical computer program SPSS. The relationship between the level of openness and popularity of NPOs using contingency tables was analyzed. This analysis using Pearson’s test showed statistical significance at the level of 0.243, which does not allow us to conclude a relationship between the parameters.

Sampling

Sampling is selecting a subset of individuals from within a statistical population to estimate the whole population. It has several advantages like lowering research costs and faster data collection than measuring the entire population. There are two sampling methods: probability sampling, which involves random selection, which makes statistical inferences possible for the entire group (Wu and Thompson, 2020). And non-probability sample is a sampling technique that involves non-random criteria where not every single person has a chance of inclusion (Wu and Thompson, 2020). In this research, non-probability sampling will be used because it will be easier to collect such data from any group of employees.

Sampling frame

The sampling frame is a source material or device from which a sample is drawn. It is a list of all those within a population who can be sampled and may include individuals, households, or institutions (Wu and Thompson, 2020). In many practical situations, the frame is a matter of choice to the survey planner and is sometimes critical (Wu and Thompson, 2020). Some very worthwhile investigations are not undertaken at all because of the lack of apparent time (Wu and Thompson, 2020). Because of faulty frames, others have ended in a disaster in a cloud of doubt.

Sample size

The sample of fifty respondents will be taken from representatives of various non-profit organizations. It will be categorized twenty owners or top managers of the NPOs and thirty workers or volunteers who actively participate in the NPO’s activity. The which will total the sample of 50 respondents.

Sampling Techniques

Both probability which are simple randomization, systematic sampling, and cluster sampling, and non-probability which are self-selection sampling, convenience sampling, purposive sampling will be used to meet the research objectives. Systematic sampling will be done to avoid biases. Probability sampling will be used because it gives the best chance of creating a genuinely representative sample of the population. A nonprobability piece will also be used due to the research’s exploratory nature and its limited budget and time.

Data collection

Modern sociological research presupposes a system for searching, collecting, processing data necessary to solve complex problems and ensure productive activity at any level. It should be noted that there are various approaches to defining the procedure for sociological research. So, most authors identify the following stages of research:

  • Definition of the problem
  • Developing a strategy to solving the problem
  • Development of a research plan
  • Result of fieldwork or data collection
  • Data preparation and analysis
  • Preparation of the report and its presentation

In particular, this point of view is shared by the American scientist N. Malhotra. For conducting marketing research to be effective, the analysis must be systematic, include a set of actions for collecting data and analyzing it, and comply with the objectivity, accuracy, and reliability of the information.

Analysis techniques

Primary data are not collected until all possible secondary information is received. This is due to the general merits of secondary data. Many of its types are not expensive (primarily periodicals, industry publications, internal data) and can be accessed relatively easily and quickly. There are often multiple sources of information available to identify different approaches, obtain large amounts of data and collate data.

However, in some cases, information on the problem under investigation may not be available. Due to its incompleteness, generalized nature, it may not satisfy researchers. The data may be outdated, or the data collection method is unknown, making it challenging to assess objectivity and reliability. Hence, we can conclude about the existing shortcomings of secondary information. If secondary sources cannot provide the researcher with the required information, it is necessary to collect primary data. Most often, marketing research is understood as the collection of preliminary data.

References

Assad, M. J., & Goddard, A. R. (2010). Stakeholder salience and accounting practices in Tanzanian NGOs. International Journal of Public Sector Management.

Bryce, H. J. (2017). Financial and strategic management for nonprofit organizations. Walter de Gruyter GmbH & Co KG.

Burde, G., Rosenfeld, A., & Sheaffer, Z. (2017). Prediction of financial vulnerability to funding instability. Nonprofit and Voluntary Sector Quarterly, 46(2), 280-304.

Burke, J., & Ngonyani, B. (2004). A social work vision for Tanzania. International Social Work, 47(1), 39-52.

Charles, W., & Nawe, J. (2017). Knowledge management (KM) practices in Institutions of Higher Learning in Tanzania with Reference to Mbeya University of Science and Technology. University of Dar es Salaam Library Journal, 12(1), 48-65.

Denhardt, R. B., Denhardt, J. V., Aristigueta, M. P., & Rawlings, K. C. (2018). Managing human behavior in public and nonprofit organizations. CQ Press.

Green, M., Mercer, C., & Mesaki, S. (2012). Faith in forms: civil society evangelism and development in Tanzania. Development in Practice, 22(5-6), 721-734.

Hopkins, B. R. (2017). Starting and managing a nonprofit organization: A legal guide. John Wiley & Sons.

Hommerová, D., & Severová, L. (2019). Fundraising of nonprofit organizations: specifics and new possibilities. Journal of social service Research, 45(2), 181-192.

Jivani, R. (2010). What are the impacts of non-governmental organizations on the lives of the citizens of Tanzania? Scholarly Commons.

Khadra, H. A., & Delen, D. (2020). Nonprofit organization fraud reporting: does governance matter? International Journal of Accounting & Information Management.

King, D. (2017). Becoming business-like: Governing the nonprofit professional. Nonprofit and Voluntary Sector Quarterly, 46(2), 241-260.

Global Giving (n.d.). Web.

Mahali, F. L. (2019). An impact of Lutheran theology on the formation of the church and society in Tanzania. Dialog, 58(2), 123-130.

Massele, A. Y., Nsimba, S. E., & Fulgence, J. (2007). A survey of prescribing practices of Health care workers in Kibaha District in Tanzania. Tanzania Medical Journal, 22(1), 31-33.

Mbelwa, L. H., Adhikari, P., & Shahadat, K. (2019). Investigation of the institutional and decision-usefulness factors in the implementation of accrual accounting reforms in the public sector of Tanzania. Journal of Accounting in Emerging Economies.

Obilor, E. I., & Amadi, E. C. (2018). Test for significance of Pearson’s correlation coefficient. International Journal of Innovative Mathematics, Statistics & Energy Policies, 6(1), 11-23.

Ragsdell, G., Rathi, D., Given, L. M., & Forcier, E. (2016). Knowledge needs in the non-profit sector: an evidence-based model of organizational practices. Journal of Knowledge Management.

Unerman, J., O’Dwyer, B., Goddard, A., & Assad, M. J. (2006). Accounting and navigating legitimacy in Tanzanian NGOs. Accounting, Auditing & Accountability Journal.

Wu, C., & Thompson, M. E. (2020). Sampling Theory and Practice. Springer International Publishing.

Zietlow, J., Hankin, J. A., Seidner, A., & O’Brien, T. (2018). Financial management for nonprofit organizations: policies and practices. John Wiley & Sons.

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BusinessEssay. 2022. "Non-Profit Organizations in Tanzania." September 1, 2022. https://business-essay.com/non-profit-organizations-in-tanzania/.

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