Non-profit organizations have been established to carry out educational, charitable and civic responsibilities. Activities of non-profit organizations are directed towards maximization of the welfare of people in need in the society. Most non-profit organizations receive their funds through donations. However, decisions on how the funds are managed are determined by the managers of non-profit organizations and not the donors.
Donors have trust in the managers of non-profit organizations that their funds will be used effectively. However, this is not always the case since some of these organizations have used the funds for other reasons other than the initial intention for example the American Red Cross collected funds to assist the victims of 9/11 but the money was used to fund other Red Cross projects. It is therefore important for Federal government to check on activities of non-profit organizations through legislations that govern their activities.
State governments should also play a critical role in regulation of activities of non-profit organizations. This will facilitate effective management of funds to meet the needs of people in the society. The essay focuses on the role of federal and state governments in regulations of activities of non-profit organizations in the United States. Poor management of funds in non-profit organizations has been necessitated by the fact that they are not required by the law to declare their financial performance to the public on a regular basis. Federal government officials should realize the need to transform the non-profit organizations sector to increase the public confidence in these organizations (Abbort & Beardsley, 2012). One of the ways through which this can be done is through appointment of external auditors to monitor the activities of these organizations especially on how they manage their funds.
Federal government should also ensure that these organizations are managed by people with adequate knowledge in finance to ensure that funds are allocated appropriately to different projects to meet the goals and objectives of these organizations. This will also enable the federal government to form partnerships with non-profit organizations to address the needs of people in the society. Role of states in regulating non-profit fundraising
State governments have a role to play in regulation of activities of non-profit organizations. One these roles are that they should require the organizations to seek full registration before they start to solicit for gifts (Lindahl, 2009, p. 108). This is an important practice since each state will be able to keep a record of the number of non-profit organizations. The state government can also use this as a platform to determine the ways in which activities of these organizations will be regulated.
State governments should determine the number of non-profit organizations that can be opened in a certain period of time. The state governments should also define the procedures that will be followed by non-profit organizations when making demands from the public to obtain funds (Lindahl, 2009, p. 108). The state governments should also make requirements to the non-profit organizations that collected funds should only be used for the purposes initially intended. This will ensure that that monies contributed by donors for charity work will be used for such purposes only.
State governments have responsibility to formulate and implement policies that will govern and enhance effective fundraising activities of non-profit organizations. These policies should also be reviewed regularly to meet the current trends and changing nature of the environment in which organizations operate. State governments should also educate the people on the importance of non-profit organizations in the society (Abbort & Beardsley, 2012). In addition, the state governments should enlighten the people on the ways through which they can identify unlawful non-profit organizations in the society. People should therefore not make contributions to such organizations.
The officers of the state governments are in direct contact with the people and therefore they understand the needs of the society (Baldry, 2004, p. 5). They also understand the motives behind formation of certain non-profit organizations. It is therefore a responsibility of the state government to scrutinize the activities of non-profit organizations including the methods used to collect funds. These governments should have the capability to accept or reject the activities of different non-profit organizations (Lindahl, 2009, p. 109).
State governments also have a responsibility to comply with the requirements of the federal government regarding fundraising activities by non-profit organizations. This will create uniformity in the ways through which fundraising activities are coordinated in different states (Chomsky & Herman, 2010, p. 8). In addition, the state governments can easily liaise with the federal government on matters relating to fund raising activities by non-profit organizations.
The state governments should employ experts in finance to monitor the fundraising activities by non-profit organizations in the United States (Abbort & Beardsley, 2012). In Moreover, these officers should be given the power to audit the financial statements of all non-profit organizations in a state. This will facilitate minimization of incidences in which funds have been mismanaged in different non-profit organizations in the United States.
The leaders and directors of these organizations will also be accountable for their actions in management of the organizations. This will improve the overall performance of non-profit sector in the United States. The citizens in need of help will be the major beneficiaries since the funds collected by non-profit organizations will be used for the reasons intended (Abbort & Beardsley, 2012). The social problems will be addressed on time thereby enhancing the welfare of people at all time. It is the ultimate goal of any state government to ensure that the people are always well off. In addition, the state governments ensure that there are well developed mechanisms to deal with emergency issues as they arise. Effective management of non-profit organizations is therefore vital for improvement of welfare of the people in the United States.
Non-profit organizations play a critical role in addressing the social problems in the United States. They receive funding from the government and other donors but the current problems observed in these organizations require the intervention of the government at both the federal and state levels. Legislations such as Sarbanes-Oxley type should be formulated to ensure that these organizations operate effectively for the benefit of people in the United States. It should also be made a requirement that these organizations should be managed by people with proper understanding of finance to enhance efficiency of operations.
The government should not overlook the fundraising activities in these organizations when regulating publicly traded organizations. It is important to control economic systems at all levels and hence these organizations should not be exempted. Independent auditors should be appointed to monitor the financial activities in non-profit organizations. Any form of fraud should be reported to the government and remedial actions should be taken immediately. This will play a critical role in reforming the non-profit sector in the United States which is currently faced by many challenges. People should be educated on the factors to consider when making donations to any non-profit organization.