NON-PROFIT SECTOR. Eva Šimková

Transcription

1 NON-PROFIT SECTOR Eva Šimková

2 This study material was created in the framework of the project Inovace studijních oborů na PdF UHK, No. CZ.1.07/2.2.00/ st edition, 64 p. University of Hradec Králové, 2014 Reviewer: Doc. PhDr. Iva Jedličková, CSc. Proofreading: Mgr. Renáta Pelcáková

3 Course syllabus and Education Material: Non-profit Sector Lecturer: Contact: Ing. Eva Šimková, Ph.D. Workload: Full-time study form: Part-time study form: Self study: 1 lecture and 2 seminars per week 14 lectures 20 hours Recommended semester for course enrollment: 5th Prerequisites: none Rules of communication with the lecturer: consultations, individual consultations based on individual agreement. Annotation The course is designed for as an introduction to the subject of non-profit sector, its characteristics and the main problems of non-profit organizations. Course objectives The main objective of the course is to provide basic professional knowledge necessary for orientation in socio-economic problems of non-profit organizations with the focus on impact of Social reform 2012 in the Czech Republic. Syllabus 1. Introduction to the economic system (economic system, three basic economic problems, types of economic systems, economic subjects state, firms and households); economic sectors, primary, secondary and tertiary industry). 2. Economic sectors and production process (economic sectors and subsectors according to different criteria, production process inputs /factors of production/, outputs /economic goods and services/, type of production process). 3. Market and market rules (definition of the market, types of market elements demand, supply, price, market price rules demand curve, supply curve, function of the market). 4. Characteristics of non-profit sector (characteristics of national economy, areas of interest /social services and social development/, problems of social sector development, segmentation of non-profit sector, difference between profit sector and non-profit sector /main objectives, resources, character of products, price, 1

4 prevalence of supply or demand, relations between non-profit organizations and clients/). 5. Typology of non-profit organizations (definition of non-profit organizations according to the law /Act No. 586/1992 Coll., on taxes revenue/, typology of nonprofit organizations according to the founder, to the global character of mission, and according to the way of financing). 6. Social services (characteristics of the services in general /intangibility, indivisibility, instability, unstorability/, characteristics of social services, goals of the social services, legislation in social services /Act No. 108/2006 Coll., On social services/, typology of the social services - social counseling, services in social care, services in social prevention, the process of providing the social services). 7. Specifics of non-profit organizations management (management in general, meaning and importance for non-profit organizations, specifics in planning process, during organization process, personal work and staff motivation, specifics in control process). 8. Fundraising (importance and determination of fundraising activities, types of fundraising, subjects of fundraising, pyramid of donors). 9. Community planning and partnership of municipalities (importance and goals of the community planning, participants of community planning /clients, providers and submitters/, various form of municipality partnership). 2

5 Literature Basic literature: 1. BACHMANN, P. Management neziskové organizace (Management of Non-profit Organization). 1 th edition. Hradec Králové: Gaudeamus, p. ISBN BROWN, H. H.; RUHL, D. L. Breakthrough Management for Not-for-Profit Organizations. Beyond Survival in the 21 st century. Praeger Publisher, p. ISBN PRŮŠA, L. Ekonomie sociálních služeb (Economy of Social Services). 2 nd edition. Praha: ASPI, p. ISBN ŠIMKOVÁ, E. Základy ekonomie a drobného podnikání (Introduction to Economics and Small Business). 3 rd actual. edition. Hradec Králové: Gaudeamus, p. ISBN ŠIMKOVÁ, E. Management a marketing v praxi neziskových organizací (Management and Marketing in Practice of Non-profit Organizations). 5 th edition. Hradec Králové: Gaudeamus, p. ISBN Legislative documents: Act No. 108/2006 Coll., on social services. Act No. 586/1992 Coll., on taxes revenue. Act No. 262/2006 Coll., labor code. Act No. 198/2002 Coll., on volunteer services. Act No. 248/1995 Coll., on public service companies. Act No. 227/1997 Coll., on foundation and endowment fund. Recommended literature: 1. BEDRNOVÁ, E.; NOVÝ, I. Psychologie a sociologie řízení (Psychology and sociology management). 1 st edition. Praha: Management Press, p. ISBN BINEK, J.; GALVASOVÁ, I. Faktory efektivity spolupráce obcí (Efficiency factors of municipal cooperation). In X. mezinárodní kolokvium o regionálních vědách. Brno: Masarykova univerzita, pp ISBN BORZAGA, C.; DEFOURNY, J. (eds). The Emergence of Social Enterprise. Routledge, p. Available at: ENCE%20OF%20SOCIAL%20ENTERPRISE/TEOSE.pdf 4. BOUKAL, P. Ekonomika a financování neziskových organizací (Economics and Financing of Non-profit Organizations). Praha: OECONOMICA, p. ISBN ČEPELKA, O. Práce s veřejností v nepodnikatelském sektoru (Work with public in non entrepreneurial sector). Liberec: Nadace Omega, s. ISBN ČMEJREK, J.; KOPŘIVA, R. Základy veřejné správy (Fundamentals of Public Administration). 1 st edition. Praha: PEF ČZU, p. ISBN DEFOURNY, J. Social Enterprise in an Enlarged Europe: Concept and Realities. [online] p. [cit ]. Available at: 3

6 8. DRUCKER, P. Řízení neziskových organizací (Management of non-profit organizations). Praha: Management Press, p. ISBN DUBEN, Rostislav. Neziskový sektor v ekonomice a společnosti (Non-profit sector in economics and society). Praha: Codex Bohemia, p. ISBN ESMOND, J. 10 Ways to Effective Volunteer Management in Recruiting, Retaining and Recognizing Volunteers. [online] Available at: Recruiting,-Retaining-and-Recognizing-Volunteers&id= ESMOND, J. The Attraction, Support and Retention of Emergency Management Volunteers. [online] p. Available at: %20EM%20Volunteers%20Attraction%20Support%20Retention%20- %20FINAL%20REPORT%20(Word%20Version).doc 12. FISCHER, R.; URY, W. Getting to Yes: Negotiation Agreement Without Giving In. 3 rd edition. New York: Penguin Books, p. ISBN GALVASOVÁ, I. ET AL. Spolupráce obcí jako faktor rozvoje (Municipality cooperation as a development factor). Brno: Georgetown, p. ISBN HÁJEK, L. Ekonomie a ekonomika (Economy and Economics). 1 th edition. Hradec Králové: Gaudeamus, p. ISBN HANNAGAN, T. J. Marketing pro neziskový sektor (Marketing for non-profit sector). Praha: Management Press, p. ISBN HELÍSEK, M. Makroekonomie základní kurz (Macroeconomics basic course). Slaný: Melandrium, p. ISBN HLOUŠEK, J.; HLOUŠKOVÁ, Z. Získávání zdrojů na aktivity NNO působící v sociální oblasti (Fundraising Activities to NGOs Operated in Social Area). 1 th edition. Hradec Králové: Gaudeamus, p. ISBN HOLMAN, R. Ekonomie (Economics). Praha: C. H. Beck, 2004, 424 p. ISBN HYÁNEK, V.; PROUZOVÁ, Z.; ŠKARABELOVÁ, S. et al. Neziskové organizace ve veřejných službách (Non-profit Organizations in Public Services). 1 th edition. Brno: Masarykova univerzita, p. ISBN KAFTAN, M. New English in Economics. Praha: Karolinum, p. ISBN KALINA, M. et al. Economy in English. 3 rd edition. Praha: VŠE, p. ISBN KOONTZ, H.; WEIHRICH, H. Management. Praha: Victoria Publishing, p. ISBN KOTLER, P. Marketing management. Praha: Grada Publishing, p. ISBN KOUBEK, J. Řízení lidských zdrojů (Human resources management). 3 rd edition. Praha: Management Press, p. ISBN LABOUTKOVÁ, Š. The Establishment of NGOs As One Growing Part of Developing Interest Groups in the Czech Republic. E+M Economy and Management, 2009, No. 1, pp ISSN MACÁKOVÁ, L. Mikroekonomie (Microeconomics). Slaný: Melandrium, p. ISBN X. 27. MATOUŠEK, O. Slovník sociální práce (Dictionary of social work). 1 th edition. Praha: Portál, p. ISBN

7 28. OCHRANA, F.; PAVEL, J.; VÍTEK, L. et al. Veřejný sektor a veřejné finance - financování nepodnikatelských a podnikatelských aktivit (Public Sector and Public Finances - financing of non entrepreneurial and entrepreneurial activities). 1 st edition. Praha: Grada Publishing, p. ISBN REKTOŘÍK, J. ET AL. Organizace neziskového sektoru základy teorie, ekonomiky a řízení (Non-profit organizations fundamentals of theory, economy and management). Praha: Ekopress, p. ISBN RUE, L.W.; BYARS, L.L.; IBRAHIM, N.A. Management: Skills and Applications. 14 th edition. McGraw-Hill/Irwin, p. ISBN SAMUELSON, P. A., NORDHAUS, W. D. Economics. 1 st edition. Praha: Svoboda, p. ISBN SARGEANT, A. Marketing Management for Nonprofit Organizations. 3 rd edition. Oxford University Press, New York, p. ISBN SCHERMERHORN, J.R. Management. John Wiley and Sons, ISBN SKOVAJSA, M. et al. Občanský sektor - organizovaná občanská společnost v České republice (Civil sector organized civil society in the Czech Republic). Praha: Portál, p. ISBN SMITH, BUCKLIN and Associates, Inc. The Complete Guide to Nonprofit Management. 2 nd edition. John Wiley and Sons p. ISBN ŠEDIVÝ, M.; MEDLÍKOVÁ, O. Úspěšná nezisková organizace jak podnikat v neziskovém sektoru (Successful non-profit organization how to run a business in non-profit sector). 1 st edition. Praha: Grada Publishing a.s., p. ISBN ŠEDIVÝ, M.; MEDLÍKOVÁ, O. Public relations, fundraising a lobbing pro neziskové organizace (Public relations, fundraising and lobbiing for non-profit organizations). 1 st edition. Praha: Grada Publishing a.s., p. ISBN TRUNEČEK, J. et al. Management v informační společnosti (Management in information society). Praha: VŠE, p. ISBN UNITED NATIONS. Handbook on Non-Profit Institutions in the System of National Accounts. 1 st edition. New York: United Nations, p. ISBN Available at: VÉRICOURT, F.; LOBO, S.M. Resource and Revenue Management in Nonprofit Operations. [online] p. [cit ]. Available at: VODÁČEK, L.; VODÁČKOVÁ, O. Management. Teorie a praxe v informační společnosti (Management. Theory and practice in information society). 3rd ed. Praha: Management Press, p. ISBN Course completion requirements Credit: seminar paper on one of the subject s topics, seminar presentation, participation in seminar s discussion. Exam: written test and oral examination. 5

8 Meaning of the icons in text Objectives Workload Important keywords Note Study questions Summary Recommended literature 6

9 Table of contents 1 INTRODUCTION TO ECONOMIC SYSTEM Economic system Types of economy Economic subjects...12 Study questions, summary ECONOMIC SECTORS AND PRODUCTION PROCESS Economic sectors Production process Factors of production process...18 Control questions, summary MARKET AND MARKET RULES Market and market mechanism Market elements Market price rules...21 Study questions, summary CHARACTERISTICS OF NON-PROFIT SECTOR Characteristics of national economy Characteristics of social sphere Difference of profit and non-profit sector...28 Study questions, summary TYPOLOGY OF NON-PROFIT ORGANIZATIONS Definition of non-profit organizations Typology of non-profit organizations...31 Study questions, summary SOCIAL SERVICES Characteristics of social services Goals of the social services providing Process of the social services providing...36 Study questions, summary SPECIFICS OF NON-PROFIT ORGANIZATIONS MANAGEMENT Management meaning and definitions Specifics in planning process Specifics in organization process Specifics in personal work and staff motivation Specifics in control process...44 Study questions, summary FUNDRAISING Importance and determination of fundraising Types of fundraising Subjects of fundraising...48 Study questions, summary

10 9 COMMUNITY PLANNING AND PARTNERSHIP OF MUNICIPALITIES Community planning Goals of community planning and its participants Partnership of municipalities...54 Study questions, summary...56 GLOSSARY...58 LIST OF FINAL PAPER TOPICS...63 LIST OF SCHEMES

11 1 Introduction to the economic system Objectives The main objective of this lecture is to describe economic system, the role of human behavior in various types of economy, particular economic subjects and their role in market. Workload 4 hours Important keywords economic system human behavior scarce resources goods and services economic problems free market economy planned economy mixed economy economic subjects state firms households 1.1 Economic system Economics Economics is a part of social science. It means that economics is an important part of another science discipline. Economic knowledge is necessary for many professions, e.g. managers, lawyers, teachers, assistants etc. It is also important for common life e.g. financial knowledge /for doing a household budget revenue (what you gain) and expenditure (what you can spend). Economics studies human behavior in terms of a choice between people s infinite needs and wants and the finite or scarce resources. Human behavior what kind of human behavior? 9

12 Shopping behavior - what can I buy, how much can I buy, in what quality? etc. After-shopping behavior Am I satisfied? Will I ever return to the particular shop? Would I recommend the shop to my friend? Can I return purchased goods /for the purpose of reclamation/? Infinite needs and wants everybody has the needs and wants that are not entirely limited (e.g. fruit, vegetables, bank services, education etc.). Finite resources concern the needs that are limited (e.g. petroleum, wood, drinking water, land etc.). Scarce resources are valued resources (e.g. knowledge/qualitative human resources - responsible, honest person; finances etc.). Economic system Economic system consists of the three basic processes: production, distribution and consumption of goods and services. Production: refers to the production of goods or provision of services some things can be found in the nature e.g. water, air, rock etc. but most of things have to be produced in the factories (cars, PC, furniture, groceries etc.). Distribution: concerns the delivery of goods to consumers and the need for the means of transport buses, cars, planes, trains, boats; and transport infrastructure roads, highways, air routes; storage is also important (warehouses, storage facilities). Consumption: relates to the consumer expenditure the amount of goods and services purchased by consumers. Other economic terms Goods: articles, commodities, products opposed to service, to be sold or purchased in a market. Services: performance of work for another subject, usually professionally (e.g. bank services, insurance, transport, teaching, tourist services etc.). No matter what particular type of economic system is applied in a society, it has to deal with the problem of scarce resources. The result is the way in which these limited resources are used. That is why any economic system has to make three basic decisions the three basic economic problems, also known as fundamental economic questions (see Scheme 1): 1. WHAT to produce? Types of goods and services, their quantities. Who answers this question? Consumers demand. 2. HOW to produce? Decisions about technologies, preference of local or imported products, environmental context etc. Who answers this question? Firms, producers, businessmen supply. 3. FOR WHOM to produce? Groups of potential users and consumers that should be known in advance. The answer to this question can be obtained through market research. 10

13 Scheme 1: Three basic economic problems (fundamental economic questions) 3 BASIC ECONOMIC PROBLEMS Fundamental economic questions WHAT to produce HOW to produce FOR WHOM to produce Source: Kaftan (2010, p. 25) Depending upon the particular type of economy, the decisions may be made by private individuals (it is the principle of free market economy), the government (principle of planned economy), or a combination of the two (principle of mixed economy) see the following text. 1.2 Type of economy As mentioned above, answers to the fundamental economic questions depend particularly upon the type of economy. We differentiate between the following economies: a) Free market economy: decisions are made by a private individual. b) Planned economy: decisions are made by the government. c) Mixed economy: decisions may arise from the both of the above-mentioned options. Some issues are solved according to the principles of free market economy, which means by individual persons, while other issues are decided by the government esp. business in strategy commodities, international trade import, export, political decisions etc. We will focus on the free market economy. All countries which have a free market economy share the following basic characteristics: 1. Decisions about productions are made by private individuals: production is based upon free enterprise it is the basic principle of the free market economy, which means that every business can produce such goods and provide such services that they want what brings profit or some advantages. 2. The firms produce goods and services to make money in order to use it for their activities. 3. The firms make profit by producing goods and services that customers want, by producing as cheaply and efficiently as possible. 11

14 4. The right to own and transfer property: immovables such as flats, apartments, family houses, land /the price of which depends on locality higher prices concern the immovables located near the large cities, e.g. Prague, HK, Brno, Pardubice/. 5. The government manages business affairs as little as possible (the government can support some branches e.g. agriculture, tourism.). 6. The efficient banking system, convertible currency (bank system in the Czech Republic is very efficient, and independent on the EU bank system). 7. The government provides especially services that are necessary to protect the citizens of the country): defense and security, law, public educational system, public health (health insurance), infrastructure (construction of roads, motorways, telecommunications), environment protection etc. Note: Market economy concerns the most European countries, America, Japan etc. Planned economy is in China, Cuba, Venezuela etc. Mixed economy concerns some of The Four Asian Tigers. 1.3 Economic subjects In economy, there are three main types of economic subjects that enter the market and whose economic behavior is monitored. They are: state, firms and households (see Scheme 2). Scheme 2: Three basic economic subjects Economic subjects State Firms Hoseholds Source: Author s own compilation, using Kaftan (2010, p. 18) The economic subjects have different interest and aims: 12

15 a) State is represented by the state, its central authorities (ministries, state organizations, Czech Statistical Office, Czech National Bank), and its main aim is the economic regulation. Note: In the Czech Republic there are for example the following ministries: Ministry of Finance, Ministry of Regional Development, Ministry of Transport, Ministry of Culture, Ministry of Agriculture, Ministry of Labor and Social Affairs, Ministry of Education, Youth and Sports etc. b) Firms are private businesses and entrepreneurs; their main aim is to gain a profit. c) Households refer to the individuals, households members; their main goal is the satisfaction their needs. Note Relations and interactions among the above economic subjects show themselves in sales and purchases of goods and/ or services, employment etc. Study questions 1. Do you usually buy commodities according to the price or to the quality? 2. Have you ever met unfair competition? 3. What is the best type of economy for the customers? Summary Three basic economic problems: WHAT to produce: types of goods and services, their quantities. HOW to produce: decisions about technologies, preference of local or imported products, environmental concerns etc. FOR WHOM to produce: groups of potential users and consumers. Free market economy: decisions are made by a private individual. Planned economy: decisions are made by the government. Mixed economy: decisions may be made any of the above-mentioned entities. State is represented by the state, its central authorities (ministries, state organizations), and the aim: economic regulation. Firms are private business, entrepreneurs, and the aim: profit. Households include individuals, households members, and their aim: needs satisfaction. 13

16 Recommended literature BORZAGA, C.; DEFOURNY, J. (eds). The Emergence of Social Enterprise. Routledge, p. Available at: CE%20OF%20SOCIAL%20ENTERPRISE/TEOSE.pdf BOUKAL, P. Ekonomika a financování neziskových organizací (Economics and Financing of Non-profit Organizations). Praha: OECONOMICA, p. ISBN BROWN, H. H.; RUHL, D. L. Breakthrough Management for Not-for-Profit Organizations. Beyond Survival in the 21 st century. Praeger Publisher, p. ISBN ČMEJREK, J.; KOPŘIVA, R. Základy veřejné správy (Fundamentals of Public Administration). 1 st edition. Praha: PEF ČZU, p. ISBN HÁJEK, L. Ekonomie a ekonomika (Economy and Economics). 1 th edition. Hradec Králové: Gaudeamus, p. ISBN HELÍSEK, M. Makroekonomie základní kurz (Macroeconomics basic course). Slaný: Melandrium, p. ISBN HOLMAN, R. Ekonomie (Economics). Praha: C. H. Beck, 2004, 424 p. ISBN KAFTAN, M. New English in Economics. Praha: Karolinum, p. ISBN KALINA, M. et al. Economy in English. 3 rd edition. Praha: VŠE, p. ISBN MACÁKOVÁ, L. Mikroekonomie (Microeconomics). Slaný: Melandrium, p. ISBN X. PRŮŠA, L. Ekonomie sociálních služeb (Economy of Social Services). 2 nd edition. Praha: ASPI, p. ISBN SAMUELSON, P. A., NORDHAUS, W. D. Economics. Praha: Svoboda, p. ISBN ŠIMKOVÁ, E. Základy ekonomie a drobného podnikání (Introduction to Economics and Small Business). 3 rd actual. edition. Hradec Králové: Gaudeamus, p. ISBN ŠIMKOVÁ, E. Management a marketing v praxi neziskových organizací (Management and Marketing in Practice of Non-profit Organizations). 5 th edition. Hradec Králové: Gaudeamus, p. ISBN

17 2 Economic sectors and production process Objectives The main objective of this section is to characterize economic sectors and subsectors according to certain criteria; production process and its inputs /factors of production/ and outputs /economic goods and services/. Workload 4 hours Important keywords economic sectors industry/sector primary sector secondary sector tertiary sector production process working process natural process technological process 2.1 Economic sectors Every economy is an integrated system of large specialized parts called sectors or industries. The sectors are subdivided into subsectors according to particular criteria (see Scheme 3): 1. type of product 2. ownership 3. stage in production. Industry/sector: Production processes concern the transformation of natural resources into products for any kind of human consumption (more in Chapter 2.3). 15

18 Scheme 3: Economic sectors and subsectors Criteria for economic sectors segmentation Type of product Ownership Stage in production Production sector Public sector Primary sector Service sector Private sector Raw materials Volumtary sector Semiproducts Secondary sector Processing Manufacturing Construction Tertiary sector Source: Author s own compilation, using Kaftan (2010, p. 26) According to the criterion stage in production, the economic sectors are divided into primary, secondary and tertiary sector: 1. Primary sector extracts raw materials from the earth (e.g. coal, fish, plants, oil etc.). Primary sector includes e.g. agriculture and forestry, fishery, mining industry. 2. Secondary sector creates final products from the primary sectors by means of processing, manufacturing or constructing activities (e.g. food, machinery, textiles). Secondary sector includes manufacturing industry. 3. Tertiary sector (or tertiary sphere) involves soft businesses; it provides services for businesses or final consumers (healthcare, restaurants, banking, tourism services etc.). Tertiary sector includes all kinds of services. Note: Voluntary sector mostly comprises non-profit organizations (often called as nongovernment organizations - NGOs). 16

19 2.2 Production process Production is a systematic and purposeful activity of people that aims at the creation of desired products (economic goods) and the provision of various services. The products and services are the result of the production process that transforms the three fundamental inputs: 4. human labor, 5. land and other natural resources, 6. capital resources. These three main inputs are known as the factors of production. They are shortly marked as labor, land and capital. The results of the production process are economic goods and services (also called as outputs) see Scheme 4. Scheme 4: Production process Inputs Production process Outputs Note: Inputs are the factors of production (labor, land and capital). Outputs are economic goods and services. Scheme 5 shows the complete process of transformation (production process), where the three factors are its interconnected, interactive and complementing parts. Scheme 5: Types of production process Production process Working process Natural process Technological process Enterprise Source: Kaftan (2010, p. 42) 17

20 2.3 Factors of production process As was presented in Scheme 5, production process consists of the following parts: Working process: refers to the human labor that represents the active element in production process. It includes workers and managers skills. The efficiency of labor depends on the quantity of work, level of professional capabilities of people, their education, knowledge, experience and practical skills. It is called the human capital. Natural process: concerns the land and other natural resources (water, air, soil, plants, animals, raw materials). The efficiency of the natural process depends on the natural factors (weather, climate etc.) and also on the quantity and quality of the resources. Technological process: relates to the capital goods that include material (machinery, means of transport, production equipment, fixed assets such as buildings and constructions), immaterial capital (know-how, up-to-date technologies, innovations) and financial capital (finances). Enterprise or entrepreneurship sometimes is considered as the fourth factor. The reason is that entrepreneur provides the initial ideas and operates with the other three factors and bears the risk. Note Production is identified as the manufacture and processing of goods. It includes their design, modification at various stages of produce (value added of processing hence it follows value added tax). Study questions 1. What products from the secondary sector did you use recently? 2. What do you think about certified products? 3. What services from the tertiary sector did you use recently? 4. What are the three main parts of the production process? 5. What is the main element of the technological process? Summary Primary sector extracts raw materials from the nature (coal, fish, plants, oil). Secondary sector creates finished products from the primary sectors (food, machinery, textiles). 18

21 Tertiary sector soft businesses, provide services for consumers (healthcare, restaurants, banking, tourism). The three main parts of the production process are working process, natural process and technological process. The three (or four) factors of production are labor, land and capital. The main element of the working process is human labor. Recommended literature HÁJEK, L. Ekonomie a ekonomika (Economy and Economics). 1 th edition. Hradec Králové: Gaudeamus, p. ISBN HELÍSEK, M. Makroekonomie základní kurz (Macroeconomics basic course). Slaný: Melandrium, p. ISBN HOLMAN, R. Ekonomie (Economics). Praha: C. H. Beck, 2004, 424 p. ISBN KAFTAN, M. New English in Economics. Praha: Karolinum, p. ISBN KALINA, M. et al. Economy in English. 3 rd edition. Praha: VŠE, p. ISBN MACÁKOVÁ, L. Mikroekonomie (Microeconomics). Slaný: Melandrium, p. ISBN X. ŠIMKOVÁ, E. Základy ekonomie a drobného podnikání (Introduction to Economics and Small Business). 3 rd actual. edition. Hradec Králové: Gaudeamus, p. ISBN ŠIMKOVÁ, E. Management a marketing v praxi neziskových organizací (Management and Marketing in Practice of Non-profit Organizations). 5 th edition. Hradec Králové: Gaudeamus, p. ISBN Act No. 108/2006 Coll., on social services. Act No. 586/1992 Coll., on taxes revenue. 19

22 3 Market and market rules Objectives The main objective of the third section is to describe the market and its elements demand, supply and price. In this section, the market rule, demand curve, supply curve and the function of a market mechanism are also characterized. Workload 4 hours Important keywords market market mechanism market elements supply demand market price rules demand curve supply curve 3.1 Market and market mechanism The word market has many meanings. It is the basic principle of market economy. The market is one of the key categories in the modern economic system. The market is also a mechanism for the exchange of goods and services among the various economic subjects (state, firms and households). The market is the place, where demand (buyers) and supply (sellers) constantly interfere. The market consists of the three basic elements: demand, supply and price. These main components interact within the process called market mechanism. Demand, supply and price are the main movers of economic processes. All of them are always on the move. That is why market mechanism is constantly kept in motion without radical intervention from the public / state. Scheme 6 demonstrates the three main market elements. 20

23 Scheme 6: Types of market elements Market elements Demand Supply Price Source: Kaftan (2010, p. 125) 3.2 Market elements As mentioned above, the three main market elements are demand, supply and price. Now it will be described these market components: Demand expresses the amount of goods and / or services that consumers (buyers) are willing to buy at a certain price. It indicates our willingness to offer money for particular goods and services. A demand can be: 1. individual by one single interested person (i.e. microeconomics level), 2. partial for one single product or service (microeconomics level), 3. aggregate the total of all intended purchases (i.e. national, macroeconomics level). Supply expresses the amount of goods and/or services that producers (sellers) are willing to supply at a certain price. A supply can be: 1. individual by one single producer / seller (microeconomics level), 2. partial of certain type of goods and / or services (microeconomics level), 3. aggregate the total of all supplies (national, macroeconomics level). Price is the basic mechanism by which a free market economy operates. Price shows the amount of money that the consumers (buyers) are prepared to pay for the certain goods or service. Price also shows on what amount of money the sellers (producers, providers etc.) are willing to offer their goods or services. The price is a certain piece of information between demand and supply. It is possible to say that the money has no value in itself; it is a means of exchange between the commodities which have a value for us. 3.3 Market price rules Demand and supply are the two main parties of the market. Demand and supply are constantly changing and the change influences the price and the amount of products that are sold and bought. Demand and supply characterize the relationship and interactions between the potential sellers and buyers of goods and services in a market. 21

24 The relationship between the price and quantity (of goods and services) and its impact on supply and demand is illustrated by specific curves (demand curve and supply curve): Demand curve is decreasing (has a decreasing tendency according to the law of decreasing demand). It means that when the price rises (from P 1 to P 2 ), demand quantity falls (from Q 1 to Q 2 ) and the other way around. Scheme 7: Demand curve P P 2 P 1 D Q 2 Q 1 Q Supply curve is growing (has a growing tendency according to the law of growing supply). It means that when the price rises (from P 1 to P 2 ), the quantity of supply rises too (from Q 1 to Q 2 ) and the other way around. Scheme 8: Supply curve P S P 2 P 1 Q 1 Q 2 Q The place where these two curves cross each other represents the market balance. Market price rules In case that the prices rise above the market price, there will be an excess supply (surplus of goods) goods cumulate in warehouses shopkeepers will have to reduce their orders and the price will gradually fall down until the supply and demand are in balance again. 22

25 In case that the prices fall below the market price, there will be an excess demand (shortage of goods) the absence of goods. Results: producers will have to produce more goods, and the price will start to rise until the supply is in balance with demand again. Note The demand and the supply constantly fluctuate; the price (market price) invokes these movements. Study questions 1. What is a demand? 2. What is a supply? 3. What are the types of demand? Which of them is relevant on the microeconomics and the macroeconomics level? 4. What are the types of supply? Which of them is relevant on the microeconomics and the macroeconomics level? 5. How does market mechanism perform its role? Summary Demand expresses the amount that consumers wish to buy. Supply expresses the amount that producers are willing to sell. Price shows the amount of money that the consumers are prepared to pay for the certain good or service. Price shows for what amount of money the sellers are willing to offer their goods or services. Demand curve is decreasing. Supply curve is growing. Recommended literature BEDRNOVÁ, E.; NOVÝ, I. Psychologie a sociologie řízení (Psychology and sociology management). 1 st edition. Praha: Management Press, p. ISBN HANNAGAN, T. J. Marketing pro neziskový sektor (Marketing for non-profit sector). Praha: Management Press, p. ISBN

26 HÁJEK, L. Ekonomie a ekonomika (Economy and Economics). 1 th edition. Hradec Králové: Gaudeamus, p. ISBN HELÍSEK, M. Makroekonomie základní kurz (Macroeconomics basic course). Slaný: Melandrium, p. ISBN HOLMAN, R. Ekonomie (Economics). Praha: C. H. Beck, 2004, 424 p. ISBN KAFTAN, M. New English in Economics. Praha: Karolinum, p. ISBN KALINA, M. et al. Economy in English. 3 rd edition. Praha: VŠE, p. ISBN KOTLER, P. Marketing management. Praha: Grada Publishing, p. ISBN MACÁKOVÁ, L. Mikroekonomie (Microeconomics). Slaný: Melandrium, p. ISBN X. ŠIMKOVÁ, E. Základy ekonomie a drobného podnikání (Introduction to Economics and Small Business). 3 rd actual. edition. Hradec Králové: Gaudeamus, p. ISBN ŠEDIVÝ, M.; MEDLÍKOVÁ, O. Úspěšná nezisková organizace jak podnikat v neziskovém sektoru (Successful non-profit organization how to run a business in non-profit sector). 1 st edition. Praha: Grada Publishing a.s., p. ISBN ŠEDIVÝ, M.; MEDLÍKOVÁ, O. Public relations, fundraising a lobbing pro neziskové organizace (Public relations, fundraising and lobbying for non-profit organizations). 1 st edition. Praha: Grada Publishing a.s., p. ISBN TRUNEČEK, J. et al. Management v informační společnosti (Management in information society). Praha: VŠE, p. ISBN Act No. 108/2006 Coll., on social services. Act No. 586/1992 Coll., on taxes revenue. 24

27 4 Characteristics of non-profit sector Objectives The main objective of this section is to describe the national economy, its two main sectors and to characterize the problems of social sector development. Second objective is to specify the difference between the profit and the non-profit sectors. Workload 4 hours Important keywords profit sector non-profit sector public sector social services social development sustainability sustainable development 4.1 Characteristics of national economy National economy can be divided (according to the financial principle) into the two main sectors: the profit sector and the non-profit sector (see Scheme 9). Scheme 9: Division of the national economy NATIONAL ECONOMY profit sector non-profit sector public private Source: Rektořík et al. (2001, p. 13) Profit (market) sector: the primary aim of the profit sector is to gain profit. Many private organizations operate there and obtain the resources for business through the selling of goods or provision of services. The rule of market mechanism applies for the profit sector without exception. 25

28 Non-profit (non-market) sector: the primary aim of the non-profit sector is to gain the benefit (positive effects) for the target group of clients. The purposes of non-profit sector are the following: - decrease in alcohol dependence, - decrease in drug dependence, - education to enhance qualification, - decrease of unemployment, - effective use of free time/leisure time by the clients (esp. youth). The resources for the non-profit sector activities can be obtained through the redistributed processes from the state budget, through sponsoring or other support from external sources (EU funds, municipal funds, renting etc.) for more about fundraising, see Chapter Characteristics of social sphere Scheme 10 presents the main characteristics of the social sphere. On one side, the social sphere provides the social services (with the aim to ensure the client s quality of life through support). Social sphere also supports the clients social development with the aim to ensure the favorable conditions for their living. The common aim of these two sections is to secure the clients social inclusion or to prevent their social exclusion. Scheme 10: Characteristics of social sphere What is social sphere? Provisionof social services Aim: quality of life, solidarity social development(sd) - favorable conditions for living social inclusion X social exclusion Source: Author s own compilation Social development is associated with the sustainable development. Sustainability, sustainable development and its three basic pillars (or three areas of development) are explained in the following text: Sustainability: For humans, the sustainability is their potential for a long-term maintenance of wellbeing which has ecological, economic, political, social and cultural dimensions. 26

29 Sustainable development refers to the development in which resources are used with the aim to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come. Sustainable development is based on the equal development of these three areas: economic development, social development and environmental development. These three pillars have to be in balance (see Scheme 11). Scheme 11: Three pillars of sustainable development Economic development Social development Environmental development Source: Author s own compilation The three pillars of sustainable development mean: Economic development: increasing of income, employment, prosperity of the locality, competitiveness of goods and services, productivity etc. Social development: quality of life, intelligence, social network, safety, wealth, social justice. Environmental development: knowledge, protection of the nature, stability and biodiversity of the environment. Concerning the development, it is necessary to mention that there are many problems in social sphere development (see Scheme 12). Scheme 12: Problems of social development NECESSITY of social sphere Source: author s own compilation LIMITS (resources) finance human On one side, the social sphere is necessary (we needed it in the past, or we will need it in the future). On the other side, there are some limits for its further development limits in resources (especially financial and human resources). Note: The personnel that work in social sphere have to display special skills such as social thinking, social conscience, empathy and other social features. 27

30 4.3 Difference of profit and non-profit sector As was presented in Scheme 9, the non-profit sector is divided into the two parts: public sector and private sector. Public sector is entirely financed from public finances; private sector is supported both from the public and the private financial resources. The main aim of the public sector is to provide the public services (esp. regional development by public administration in particular regions and municipalities). The main aim of the private sector is to provide benefit (certain utility) to clients. Difference between the profit and non-profit sectors is presented in the following table (see Table 1). Table 1: Difference between the profit and non-profit sectors Criterion Profit sector Non-profit sector 1. Main aim To gain profit. To achieve benefit. 2. Resources Through own activities. From external resources. 3. Character of the products Material products. Immaterial products. 4. Price Market price. Supported price. 5. Prevalence of supply or demand Supply > demand. Supply < demand. 6. Relations with clients Free relations. Tighter relations. Source: Author s own compilation Note The total of non-profit organizations in the Czech Republic is about (2010). Study questions 1. How many non-profit organizations operate in your town/region? 2. What kind of services do they provide? 3. What types of social services are used by the particular target groups? 4. What do you think about the activities of the non-profit organizations? Summary National economy is divided into profit sector and non-profit sector. The primary aim of the non-profit sector is to achieve the benefit (positive effects) for the target group of clients. Three pillars of sustainable development are economic, social and environment development. 28

31 Economic development: increasing income, employment, prosperity, competitiveness, productivity. Social development: quality of life, intelligence, social network, safety, wealth, social justice. Environmental development: knowledge, protection of the nature, stability and biodiversity of the environment. Difference between the profit and non-profit sectors: Main aim. Resources for their activities. Character of provided products. Price for the products. Prevalence of supply or demand. Relations with the clients. Recommended literature BACHMANN, P. Management neziskové organizace (Management of Non-profit Organization). 1 th edition. Hradec Králové: Gaudeamus, p. ISBN DEFOURNY, J. Social Enterprise in an Enlarged Europe: Concept and Realities. [online] p. [cit ]. Available at: ESMOND, J. 10 Ways to Effective Volunteer Management in Recruiting, Retaining and Recognizing Volunteers. [online] Available at: Retaining-and-Recognizing-Volunteers&id= HYÁNEK, V.; PROUZOVÁ, Z.; ŠKARABELOVÁ, S. et al. Neziskové organizace ve veřejných službách (Non-profit Organizations in Public Services). 1 st edition. Brno: Masarykova univerzita, p. ISBN OCHRANA, F.; PAVEL, J.; VÍTEK, L. et al. Veřejný sektor a veřejné finance - financování nepodnikatelských a podnikatelských aktivit (Public Sector and Public Finances - financing of non entrepreneurial and entrepreneurial activities). 1 st edition. Praha: Grada Publishing, p. ISBN REKTOŘÍK, J. ET AL. Organizace neziskového sektoru základy teorie, ekonomiky a řízení (Non-profit organizations fundamentals of theory, economy and management). Praha: Ekopress, p. ISBN SMITH, BUCKLIN and Associates, Inc. The Complete Guide to Nonprofit Management. 2 nd edition. John Wiley and Sons p. ISBN ŠIMKOVÁ, E. Management a marketing v praxi neziskových organizací (Management and Marketing in Practice of Non-profit Organizations). 5 th edition. Hradec Králové: Gaudeamus, p. ISBN SUSTAINABLE DEVELOPMENT. [On-line] [cit ] Available at: tbm=isch&tbo=u&source=univ&sa=x&ei=lz9tudwpknsh7abiocwca&ved=0cdwqsaq&biw=1280&bih=

32 5 Typology of non-profit organizations Objectives The main objective of the fifth section is to give a definition of non-profit organizations and describe the types of non-profit organizations according to the founder, the global character of mission and the way of financing. Workload 5 hours Important keywords non-profit organizations law No. 586/1992 Coll., on taxes revenue typology of non-profit organizations founder criterion global character of mission criterion financial criterion 5.1 Definition of non-profit organizations In the Czech professional literature, the characterization of the non-profit organizations is not clearly explained. As Rektořík et al. (2001) state, the main characteristics of the non-profit organizations are based on the definition in the Act No. 585/1992 Sb., on taxes revenue. According to this law, they are the organizations of corporate body not established or organized for the purpose of business. Note: Non-profit organizations are often identified as non-government organizations (NGOs). Characteristics of NGOs Generally, non-profit organizations are characterized by common features: legal entities (corporate bodies), not established for business purposes, not established for the purpose of making a profit, meet the specific needs for citizens and communities, may or may not be managed from the public budget. 30

33 Private non-profit organizations are characterized by the following features: legally allowed their autonomy, membership in these organizations is done entirely on a voluntary basis (with the exception of some professional associations), organizations are built on the informal membership structure, but always within the actual legislation. Vision and mission of non-profit organizations Formulation of vision is the first step when setting up the non-profit organization. It is also a prerequisite of the successful implementation of its mission and strategic development project. Vision (idea) refers to the basic orientation of the organization, i.e. what kind of activities it can perform, what are the future goals and accomplishments. Mission defines the purpose of the existence of an organization. Contrary to the vision, the mission has a special character. The mission has to be formulated concisely so that it distinguishes the organization from others. The mission is a basic guidance for the long-term planning and strategy of the organization. 5.2 Typology of non-profit organizations Non-profit organizations are classified according to various criteria (Rektořík et al., 2001): a) the founder of the organization b) the global nature of the mission c) financing. Ad a ) Founder criterion: According to the criterion of the founder, the non-profit organizations are divided into: organizations established by public administration, i.e. the state administration (such as ministries), organizations established by a private individual or a corporate body, organizations created as a public institution, where the performance of public service is given as a statutory duty (such as a public university). Ad b ) Global nature of the mission criterion: According to the criterion of the global nature of the mission, the non-profit organizations are divided into: public utility organizations, founded for the purpose of producing public goods (such as charity, ecology, health, education, public administration etc.), 31

34 mutually beneficial organizations, founded for the purpose of the mutual support of members; the mission is to satisfy their own interests (activities in the fields of culture, professional interests, protection of the certain groups of people etc.). Ad c ) Financial criterion: According to the criterion of financing, the non-profit organizations are divided into: 1. organizations financed entirely from the public funds (government departments and local units), 2. organizations partly funded from the public funds (allowance organizations, civic associations, churches and religious societies, political parties and political associations), 3. organizations funded from various sources (such as donations, collections, sponsorships, grants, private activities etc.), 4. organizations financed mainly from its own revenues. Note Another possible division of the non-profit organizations including an overview of the law is mentioned in Rektořík et al. (2001). Study questions 1. How can we define the non-profit organizations? 2. What is the main instrument for the non-profit characteristics? 3. How can we classify non-profit organizations? 4. Define the vision of the particular nonprofit organization. 5. Define the mission of the particular nonprofit organization. Summary The main characteristics of non-profit organizations are based on the definition in the Act No. 585/1992 Coll., on taxes revenue. According to this law it is concerned with the organizations of corporate body not established or organized for the purpose of business. Typology of non-profit organizations results from these criteria: organization founder, global character of mission, and the way of financing. Vision (idea) refers to the basic orientation of the organization. Mission defines the reason of organization existence and has special character. 32

35 Recommended literature BACHMANN, P. Management neziskové organizace (Management of Non-profit Organization). 1 st edition. Hradec Králové: Gaudeamus, p. ISBN BOUKAL, P. Ekonomika a financování neziskových organizací (Economics and Financing of Non-profit Organizations). Praha: OECONOMICA, p. ISBN ČEPELKA, O. Práce s veřejností v nepodnikatelském sektoru (Work with public in non entrepreneurial sector). Liberec: Nadace Omega, s. ISBN ČMEJREK, J.; KOPŘIVA, R. Základy veřejné správy (Fundamentals of Public Administration). 1 st edition. Praha: PEF ČZU, p. ISBN FISCHER, R.; URY, W. Getting to Yes: Negotiation Agreement Without Giving In. 3 rd edition. New York: Penguin Books, p. ISBN HANNAGAN, T. J. Marketing pro neziskový sektor (Marketing for non-profit sector). Praha: Management Press, p. ISBN HYÁNEK, V.; PROUZOVÁ, Z.; ŠKARABELOVÁ, S. et al. Neziskové organizace ve veřejných službách (Non-profit Organizations in Public Services). 1 st edition. Brno: Masarykova univerzita, p. ISBN LABOUTKOVÁ, Š. The Establishment of NGOs As One Growing Part of Developing Interest Groups in the Czech Republic. E+M Economy and Management, 2009, No. 1, pp ISSN REKTOŘÍK, J. ET AL. Organizace neziskového sektoru základy teorie, ekonomiky a řízení (Non-profit organizations fundamentals of theory, economy and management). Praha: Ekopress, p. ISBN SKOVAJSA, M. et al. Občanský sektor - organizovaná občanská společnost v České republice (Civil sector organized civil society in the Czech Republic). Praha: Portál, p. ISBN ŠEDIVÝ, M.; MEDLÍKOVÁ, O. Úspěšná nezisková organizace jak podnikat v neziskovém sektoru (Successful non-profit organization how to run a business in non-profit sector). 1 st edition. Praha: Grada Publishing a.s., p. ISBN ŠEDIVÝ, M.; MEDLÍKOVÁ, O. Public relations, fundraising a lobbing pro neziskové organizace (Public relations, fundraising and lobbying for non-profit organizations). 1 st edition. Praha: Grada Publishing a.s., p. ISBN ŠIMKOVÁ, E. Management a marketing v praxi neziskových organizací (Management and Marketing in Practice of Non-profit Organizations). 5 th edition. Hradec Králové: Gaudeamus, p. ISBN Legislative: Act No. 586/1992 Coll., on taxes revenue. Act No. 262/2006 Coll., labor code. Act No. 198/2002 Coll., on volunteer services. Act No. 248/1995 Coll., on public service companies. Act No. 227/1997 Coll., on foundation and endowment fund. 33

36 6 Social services Objectives The main objective of the chapter is to introduce the basic features, objectives and types of social services, including the process of their provision. Workload 5 hours Important keywords social services unfavorable social situation production function of social services inputs outputs 6.1 Characteristics of social services Service is a systematic human activity which is provided by one subject (a service provider) to another subject. The service is absolutely intangible and it does not bring in any property. Its implementation may or may not be associated with a physical product. The four basic characteristics of services are the following: 1. Intangibility unlike physical products, service is intangible (it has immaterial character). 2. Indivisibility service cannot exist separately from its provider, service is produced and consumed simultaneously (at the same time). 3. Instability (variability) services are highly variable because they depend on many factors: WHO provides them, WHERE the services are provided, WHEN the services are provided. For these reasons, it is necessary to ensure the quality of the staff (quality of the service providers). 4. Unstorability because of its intangibility character, services cannot be stored, they have to be provided at the moment when the services are required. 34

37 According to Matoušek (2003, p. 214), social services can be described as all services of a short-term or a long-term character which are provided to clients with the aim to increase the clients quality of life and to protect the interests of the society. Social services are intended for individuals or group of persons who are in a difficult social situation and cannot solve their problems independently (see Scheme 13). Scheme 13: Provision of social services Social services Provided to clients. Person in unfavorable social situation. Person who is unable to satisfy his/her needs. Source: Author s own compilation The target groups or the clients of social services include the elderly, handicapped people, families with small children and many other groups of people live on the edge of society. Social services include a wide spectrum of activities: - assistance with self-care, - assistance in preparing meals, - help with living, - household assistance, - treatment, - counseling, - educational services, - psychotherapy and social therapy, - assistance in advocacy of the human rights and interests etc. Together, the abovementioned activities create the complex of services. Social services help people live their usual life. Services enable people to work, do the shopping, attend school, participate in leisure activities, and take care of themselves and their household. 35

38 6.2 Goals of social services provision As was implied above, the goals of social services provision are the following: Protection of vulnerable groups of people. Support of the clients independence and their return to regular life. Support of the clients integration into society support of the self-realization of the clients and their participation in regular life activities (social inclusion), or prevention from social exclusion. In 2006, the Act No. 108/2006 Coll., on social services, was passed. This Act has changed the situation in social sphere. It defines social services, defines the different types of social services and required qualification of providers. The main purpose of the Act is to promote the social inclusion and social cohesion in society. This Act differentiates the following three types of social services: 1. Social counseling counseling is an essential activity within the provision of all kinds of social services. 2. Services in social care with the aim to ensure the clients physical and mental self-sufficiency, and get them involved in social activities (social inclusion). 3. Services in social prevention with the aim to prevent vulnerable groups of people from the social exclusion. Examples of social care services: Social service Personal assistance Guidance service Day care centers Weekly care centers Rest home Sheltered housing etc. Examples of social prevention services: Social housing (shelter) Emergency assistance Contact centers Therapeutic communities Social rehabilitation Field programs Telephone help lines etc. 36

39 Social services are provided in these three basic forms: 1. Residential services (services that comprise the client s accommodation in the institution of social services). 2. Ambulatory services (services without accommodation, clients are transported to the institution of social services). 3. Field services (provision of services in clients natural social environment). 6.3 Process of the social services provision The essence of the particular social service can be described in its production function represented by the following scheme (Scheme 14). Social services and their elements represent the inputs to a certain reproductive process. In connection with clients, they create positive effects outputs. Scheme 14: Process of the social services providing Inputs Provision of social services Outputs Clients Source: Duben (1996, p. 38) Clients (customers, consumers) play an active role during the whole process of social services provision. Without their active participation in the process, the results wouldn t reach the desired positive effect. Social services differ from other services or production of goods mainly by the difficult evaluation of their final outcomes. It is impossible to objectively assess the final outputs and results of such services. It is impossible to quantify these outputs from the economic point of view only. There are many other outcomes (non-economic and social criteria) related to the social value of these special goods. Table 2 shows the summary of the various types of inputs, clients and the final effects (outputs). 37

40 Table 2: Components of the process of social services provision Inputs Clients Outputs Teachers, school buildings and facilities, textbooks etc. Doctors, nurses, other medical staff, buildings and equipment, medicinal drugs etc. Social workers, their services Pupils, students Patients Elderly people, disabled people etc. Qualification and skills Public health Clients with better mobility and less dependence on others Source: Modified according to Duben (1996, p. 38) Note The important Act on non-profit organizations is also Act No. 198/2002 Coll., on volunteer services. Study questions 1. Name the four basic characteristics of services. 2. What kind of activities can be supported by social services? 3. What are the goals of social services provision? 4. Describe the process of social services provision. Summary Four basic characteristics of services are: intangibility, indivisibility, instability and unstorability. The main instrument for social services is Act No. 108/2006 Coll., on social services. There are three types of social services: social counseling, services in social care, and services in social prevention. Social services can be provided as residential, ambulatory and field services. 38

41 Recommended literature BACHMANN, P. Management neziskové organizace (Management of Non-profit Organization). 1 st edition. Hradec Králové: Gaudeamus, p. ISBN ČEPELKA, O. Práce s veřejností v nepodnikatelském sektoru (Work with public in non entrepreneurial sector). Liberec: Nadace Omega, s. ISBN ČMEJREK, J.; KOPŘIVA, R. Základy veřejné správy (Fundamentals of Public Administration). 1 st edition. Praha: PEF ČZU, p. ISBN DUBEN, Rostislav. Neziskový sektor v ekonomice a společnosti (Non-profit sector in economics and society). Praha: Codex Bohemia, p. ISBN HANNAGAN, T. J. Marketing pro neziskový sektor (Marketing for non-profit sector). Praha: Management Press, p. ISBN HYÁNEK, V.; PROUZOVÁ, Z.; ŠKARABELOVÁ, S. et al. Neziskové organizace ve veřejných službách (Non-profit Organizations in Public Services). 1 st edition. Brno: Masarykova univerzita, p. ISBN MATOUŠEK, O. Slovník sociální práce (Dictionary of social work). 1 st edition. Praha: Portál, p. ISBN PRŮŠA, L. Ekonomie sociálních služeb (Economy of Social Services). 2 nd edition. Praha: ASPI, p. ISBN REKTOŘÍK, J. ET AL. Organizace neziskového sektoru základy teorie, ekonomiky a řízení (Non-profit organizations fundamentals of theory, economy and management). Praha: Ekopress, p. ISBN SKOVAJSA, M. et al. Občanský sektor - organizovaná občanská společnost v České republice (Civil sector organized civil society in the Czech Republic). Praha: Portál, p. ISBN ŠEDIVÝ, M.; MEDLÍKOVÁ, O. Úspěšná nezisková organizace jak podnikat v neziskovém sektoru (Successful non-profit organization how to run a business in non-profit sector). 1 st edition. Praha: Grada Publishing a.s., p. ISBN ŠEDIVÝ, M.; MEDLÍKOVÁ, O. Public relations, fundraising a lobbing pro neziskové organizace (Public relations, fundraising and lobbying for non-profit organizations). 1 st edition. Praha: Grada Publishing a.s., p. ISBN ŠIMKOVÁ, E. Management a marketing v praxi neziskových organizací (Management and Marketing in Practice of Non-profit Organizations). 5 th edition. Hradec Králové: Gaudeamus, p. ISBN Legislative documents: Act No. 108/2006 Coll., on social services. Act No. 586/1992 Coll., on taxes revenue. Act No. 262/2006 Coll., labor code. Act No. 198/2002 Coll., on volunteer services. Act No. 248/1995 Coll., on public service companies. Act No. 227/1997 Coll., on foundation and endowment fund. 39

42 7 Specific features of non-profit organizations management Objectives The main objective of the chapter is to define management as a term and its importance for organizations, and then characterize the specifics of non-profit organizations management. Workload 5 hours Important keywords management management process planning organizing personal policy leading and motivation control 7.1 Management its meaning and definitions The linguists state that the roots of the term management go back to the Latin word manus i.e. hand. Meaning of the term management can be deduced from English: to manage i.e. lead, control, administer etc. The other meaning is connected with the management which means leadership, managing, controlling, operating etc. It is obvious that the term management has wide applications. In many cases, the term is not translated into the Czech language and is used in the English version. The management application currently represents rather specialized activities. The necessity of leading concerns all the aspects of human activities, i.e. not only the manufacturing process, but also the army, education, art and other organizations (non-profit organizations too). The difficulty of defining of the term management results from the various meaning of this word: 40

43 management (identification of the function), managers (management staff - identification of the groups of people practicing it), scientific disciplines and subject of study. The managers can be divided into the three basic levels managerial pyramids (see Scheme 15). Scheme 15: Managerial pyramid TM MM FLM Source: Modified according to Koontz and Weihrich (1993, p. 19) Note: TM TOP management MM MIDDLE management FLM FIRST-LINE management At the TOP level (TOP management), the vision, mission and long-term strategy of an organization are formulated. At the MIDDLE level (MIDDLE management), the tactical coordination of the activities is implemented. At the FIST-LINE level (FIRST- LINE management), the routine and operative activities are performed. There are many definitions of management (Vodáček and Vodáčková, 1999; Koontz and Weihrich, 1993; Kotler, 1999 etc.): Management is an art of managing. Management means achieving of business objectives through leadership. Management as purposefully coordinated influence on the activities of people in order to enhance the present state. Management is often characterized in relation to the management functions (activities). Management in this conception is defined as the process of planning, 41

44 organizing, staffing, and leading; and also the staff motivation and control. During this management process, all resources are utilized for achieving of the organization goals. This concept expresses the systematic implementation of all organization activities. Management theory for profit organizations also provides information on non-profit organizations, but not without the specific aspects of non-profit organizations. The following part of the chapter the specifics in planning process, organization process, personal work and staff motivation and control process are described. 7.2 Specifics in planning process Planning is the first step and the beginning of the management process. It is considered as the most important function. Planning can be described as an activity that involves setting goals and means (strategies) for their achieving. A plan is the result of the planning process (a plan represents the elaborated process of achieving goals). The plan comprises two basic issues: 1. What do we want to achieve? 2. How it is to be achieved? Specifics in planning process in non-profit organizations: The goals are usually stated for the short-term periods of time. That is why it is difficult to make a strategy program. The reasons are the following: - unstable environment (macro and micro background of non-profit organizations), - uncertainty, - limited resources (esp. financial and human resources). 7.3 Specifics in organizational process Organizing is an activity that aims at creating of a functional organizational structure, i.e. setting the elements (people, means of production, and other assets), their connection and mutual relations within the system (in organization, company, workshop etc.). There are some requirements for organizing process and creating of the organization structure. It is referred to as OSCAR, a term by Vodáček and Vodáčková (1999). The abbreviation expresses the chain of requirements to be met the during the organizational process: - Objectives (i.e. achieving of the specified organizational goals). - Specialization (focus on a particular type of activity). - Coordination (optimal cooperation leading to the synergistic effect). - Authority (competence and power of the staff). 42

45 - Responsibility (accountability for assigned tasks). Specifics in organizational process in non-profit organizations: In non-profit organizations, there is high liberty and non-formal organization structure i.e. non formal relations and communication, which leads to the inaccurate determination of competences, low quality of management of the organization, obscurity and sometimes chaos in the workplace. 7.4 Specifics in personal work and staff motivation An organization can operate thanks to the following resources: material resources (buildings, machinery, equipment, materials, raw materials, energy etc.), finances (financial resources), information, human resources (knowledge, skills and abilities of the staff). According to Koubek (2003), human resources are the fundamental resources, and the biggest asset, of organizations. That is why personal work is very important management function. Personal activities include staff planning, recruitment, placement, motivation, remuneration, training and education, dismissals etc. In general, personal work means filling positions in the organizational structure by the most competent people. Specifics in personal work and motivation in non-profit organizations: The personal work in non-profit organizations is affected by the amount of voluntary work. It has many advantages, e.g.: - large internal motivation for work, - cheapness of volunteers work. On the other hand, voluntary work brings many disadvantages, e.g.: - lack of volunteers time, - quality and quantity of their work, - unwillingness to learn new things etc. As was mentioned in the text above, there is a big tradition of volunteering in the Czech Republic, and so there is a legislative statement for this type of work (Act No. 198/2002 Coll., on volunteer services). Volunteer services are defined in this legislative document, as well as the type of help involving the risk groups of people, or the help in disaster (natural, ecological, humanitarian helps etc.). 43

46 7.5 Specifics in control process The basic management principle states that without any control, there is no real management process. Control is the final part of the management process. Control measures the real situation and compares it to the planned situation (predefined purpose or plan). Control performs the function of feedback that informs about realized process. Abnormalities must be removed. Specifics in control process in non-profit organizations: In non-profit organizations, the control is the basis for determination of the quality standards. There is a big problem with a large amount of human work. Note Communication and decision making are the important tools of management process. Communication means transmission of information, instructions, regulations etc., decision making refers to a choice from several options. Study questions 1. Specify the management process and its main elements. 2. What are the specifics in planning process in non-profit organizations? 3. What are the specifics in organization process in non-profit organizations? 4. What are the specifics in personal work and staff motivation in non-profit organizations? 5. What are the specifics in control process in non-profit organizations? Summary The term management identifies the function, managers and scientific disciplines. Management is often characterized in relation to the purpose of management functions (activities). Management in this conception is defined as the process of planning, organizing, staffing, leading and staff motivation, and control. Planning process is influenced by instable environment, uncertainty and limited resources. Organizational process is specified by a non-formal organization structure. Personal work is affected by the amount of voluntary work. Control process is based on the quality standards. 44

47 Recommended literature BACHMANN, P. Management neziskové organizace (Management of Non-profit Organization). 1 st edition. Hradec Králové: Gaudeamus, p. ISBN BROWN, H. H.; RUHL, D. L. Breakthrough Management for Not-for-Profit Organizations. Beyond Survival in the 21 st century. Praeger Publisher, p. ISBN DUBEN, Rostislav. Neziskový sektor v ekonomice a společnosti (Non-profit sector in economics and society). Praha: Codex Bohemia, p. ISBN ESMOND, J. 10 Ways to Effective Volunteer Management in Recruiting, Retaining and Recognizing Volunteers. [online] Available at: Retaining-and-Recognizing-Volunteers&id= ESMOND, J. The Attraction, Support and Retention of Emergency Management Volunteers. [online] p. Available at: %20EM%20Volunteers%20Attraction%20Support%20Retention%20- %20FINAL%20REPORT%20(Word%20Version).doc KOONTZ, H.; WEIHRICH, H. Management. Praha: Victoria Publishing, p. ISBN KOTLER, P. Marketing management. Praha: Grada Publishing, p. ISBN KOUBEK, J. Řízení lidských zdrojů (Human resources managment). 3 rd edition. Praha: Management Press, p. ISBN REKTOŘÍK, J. ET AL. Organizace neziskového sektoru základy teorie, ekonomiky a řízení (Non-profit organizations fundamentals of theory, economy and management). Praha: Ekopress, p. ISBN RUE, L.W.; BYARS, L.L.; IBRAHIM, N.A. Management: Skills and Applications. 14 th edition. McGraw-Hill/Irwin, p. ISBN SARGEANT, A. Marketing Management for Nonprofit Organizations. 3 rd edition. Oxford University Press, New York, p. ISBN SCHERMERHORN, J.R. Management. John Wiley and Sons, ISBN SMITH, BUCKLIN and Associates, Inc. The Complete Guide to Nonprofit Management. 2 nd edition. John Wiley and Sons pp. ISBN ŠIMKOVÁ, E. Management a marketing v praxi neziskových organizací (Management and Marketing in Practice of Non-profit Organizations). 5 th edition. Hradec Králové: Gaudeamus, p. ISBN UNITED NATIONS. Handbook on Non-Profit Institutions in the System of National Accounts. 1 st edition. New York: United Nations, p. ISBN Available at: VÉRICOURT, F.; LOBO, S.M. Resource and Revenue Management in Nonprofit Operations. [online] p. [cit ]. Available at: VODÁČEK, L.; VODÁČKOVÁ, O. Management. Teorie a praxe v informační společnosti (Management. Theory and practice in information society). 3 rd edition. Praha: Management Press, p. ISBN

48 8 Fundraising Objectives The objective of this chapter is to characterize fundraising, its importance for nonprofit organizations, types of fundraising, subjects providing fundraising and the pyramid of donors. Workload 5 hours Important keywords fundraising forms of fundraising resources donors charity grant subsidies 8.1 Fundraising According to Hloušek and Hloušková (2011), the term of fundraising is not translated into the Czech language. Fundraising refers to various methods and procedures that serve to obtain funding for the activities of non-profit organizations. Fundraising is a tool used to persuade people to do good, i.e. charity. Fundraising is not just about obtaining funds needed for a non-profit organization s survival. It serves to gain potential benefactors trust and related stability and sustainability of the organization. It also refers to the ability to address new members (supporters, promoters and friends) and bring them into the organization. Fundraising is an integral part of the financial management of the non-profit organizations. What is the importance of fundraising activities? Fundraising determines the success of an organization. Every organization needs money in order to fulfill its basic role. An organization has to pay its employees, rent and other operating costs. Organization needs to pay the costs for projects, for future programs, for new technologies and equipment. 46

49 The importance of fundraising and its position in an organization are shown in the following scheme (see Scheme 16). Fundraising is one of the supporting activities that an organization must perform. There is a mission (the reason and purpose of the organization existence) in the center of the scheme. All other activities that need be done by non-profit organizations in order to fulfill their mission are located around. The scheme portrays the fact that fundraising shares many common principles with the marketing and public relations. Scheme 16: Position of fundraising in organization Fundraising Administration Finances Human Mission Marketing resources Management Public Relations ICT Source: Modified according to Jupa (2003) In Hloušek and Hloušková (2011, p. 19) Hloušek and Hloušková (2011) claim that public relations (PR) comprise very important activities for the creation of favorable conditions for the organization function and its prosperity. Fundraising activities have the same aim. Good PR is essential for successful fundraising activities. 8.2 Types of fundraising Non-profit organizations must regularly and systematically seek and ensure enough finances for their activities. These resources are transformed each year. Obtaining funds in a certain way during one period of time (a year) does not necessarily mean that the same means of fundraising may be effectively applied in the next period. That is why it is necessary to permanently modify the form of fundraising. 47

50 Each form has its advantages and disadvantages. The basic differentiation of fundraising is based on the criterion of source (originator/donor/benefactor). The forms can be also differentiated according to the character of benefit (money, material donation, services, information etc.). Individual forms can be combined. Table 3: Forms of fundraising Resource Individual person, family Foundations, endowment funds Public authorities EU funds Companies, trading companies, firms The non-profit organization itself Form of fundraising Gift (monetary of material) Public fund-raising campaign incl. DMS Volunteering (individual) Lottery Charity auction The reference in the will Membership fee (club) Grant Subsidy (usually from public budgets) Gift (monetary of material) Sponsorship (advertising, promotion) Corporate volunteering Renting space or equipment Hiring a worker Discounts on purchases of goods and services Payroll giving Matching Internal charity auction among employees Shared marketing Selling of products Selling of services Income from property Source: Hloušek and Hloušková (2011, p ) 8.3 Subjects of fundraising Fundraising can be realized by several subjects, e.g. (Hloušek and Hloušková, 2011): Chairman of the Executive Council (or Board of Directors), Executive Director, Professional fundraiser, 48

51 Volunteer fundraiser. According to Bachmann (2011), the acquisition of donors is important; but taking care of existing donors is even more important. Therefore, fundraising must include a systematic cooperation with a donor. The relation between donors and the obtained sum of money is illustrated in the following pyramid (see Scheme 17). Scheme 17: Pyramid of donors Lasting Kč + relation Regular gift Kč First conscious gift Kč Potential and occasional donors. 0 or less than 100 Kč Source: Modified according to Bachmann (2011, p. 12) Note The pyramid points to the necessity of building a long-term relationship with a donor. On the right side of the scheme, there is an example of the financial amount related to the type of sponsorship. Study questions 1. What is fundraising? 2. Explain, why is fundraising important. 49

52 3. Name various forms of fundraising. 4. Give an example of donor in selected non-profit organization. Summary Fundraising refers to various methods and procedures that serve to obtain funding for the activities of non-profit organizations. Non-profit organization must regularly and systematically seek and ensure enough finance for its activities. Fundraising can be realized by several subjects: Executive Director, Professional fundraiser, and Volunteer fundraiser. There are many forms of fundraising: gift, public collection, DMS, volunteering, lottery, charity auction, grants, sponsorship, payroll giving, member fee, renting, hiring etc. There are many resources of fundraising: individual, family, company, public authorities, EU funds etc. Recommended literature BACHMANN, P. Management neziskové organizace (Management of Non-profit Organization). 1 st edition. Hradec Králové: Gaudeamus, p. ISBN BEDRNOVÁ, E.; NOVÝ, I. Psychologie a sociologie řízení (Psychology and sociology management). 1 st edition. Praha: Management Press, p. ISBN BOUKAL, P. Ekonomika a financování neziskových organizací (Economics and Financing of Non-profit Organizations). Praha: OECONOMICA, p. ISBN ČEPELKA, O. Práce s veřejností v nepodnikatelském sektoru (Work with public in non entrepreneurial sector). Liberec: Nadace Omega, s. ISBN ČMEJREK, J.; KOPŘIVA, R. Základy veřejné správy (Fundamentals of Public Administration). 1 st edition. Praha: PEF ČZU, p. ISBN DEFOURNY, J. Social Enterprise in an Enlarged Europe: Concept and Realities. [online] p. [cit ]. Available at: ESMOND, J. 10 Ways to Effective Volunteer Management in Recruiting, Retaining and Recognizing Volunteers. [online] Available at: Retaining-and-Recognizing-Volunteers&id= ESMOND, J. The Attraction, Support and Retention of Emergency Management Volunteers. [online] p. Available at: %20EM%20Volunteers%20Attraction%20Support%20Retention%20- %20FINAL%20REPORT%20(Word%20Version).doc 50

53 FISCHER, R.; URY, W. Getting to Yes: Negotiation Agreement Without Giving In. 3 rd edition. New York: Penguin Books, p. ISBN HANNAGAN, T. J. Marketing pro neziskový sektor (Marketing for non-profit sector). Praha: Management Press, p. ISBN HLOUŠEK, J.; HLOUŠKOVÁ, Z. Získávání zdrojů na aktivity NNO působící v sociální oblasti (Fundraising Activities to NGOs Operated in Social Area). 1 st edition. Hradec Králové: Gaudeamus, p. ISBN HYÁNEK, V.; PROUZOVÁ, Z.; ŠKARABELOVÁ, S. et al. Neziskové organizace ve veřejných službách (Non-profit Organizations in Public Services). 1 st edition. Brno: Masarykova univerzita, p. ISBN LABOUTKOVÁ, Š. The Establishment of NGOs As One Growing Part of Developing Interest Groups in the Czech Republic. E+M Economy and Management, 2009, No. 1, pp ISSN OCHRANA, F.; PAVEL, J.; VÍTEK, L. et al. Veřejný sektor a veřejné finance - financování nepodnikatelských a podnikatelských aktivit (Public Sector and Public Finances - financing of non entrepreneurial and entrepreneurial activities). 1 st edition. Praha: Grada Publishing, p. ISBN SARGEANT, A. Marketing Management for Nonprofit Organizations. 3 rd edition. Oxford University Press, New York, p. ISBN SKOVAJSA, M. et al. Občanský sektor - organizovaná občanská společnost v České republice (Civil sector organized civil society in the Czech Republic). Praha: Portál, p. ISBN ŠEDIVÝ, M.; MEDLÍKOVÁ, O. Úspěšná nezisková organizace jak podnikat v neziskovém sektoru (Successful non-profit organization how to run a business in non-profit sector). 1 st edition. Praha: Grada Publishing a.s., p. ISBN ŠEDIVÝ, M.; MEDLÍKOVÁ, O. Public relations, fundraising a lobbing pro neziskové organizace (Public relations, fundraising and lobbying for non-profit organizations). 1 st edition. Praha: Grada Publishing a.s., p. ISBN TRUNEČEK, J. et al. Management v informační společnosti (Management in information society). Praha: VŠE, p. ISBN VÉRICOURT, F.; LOBO, S.M. Resource and Revenue Management in Nonprofit Operations. [online] p. [cit ]. Available at: Legislative: Act No. 108/2006 Coll., on social services. Act No. 586/1992 Coll., on taxes revenue. Act No. 262/2006 Coll., labor code. Act No. 198/2002 Coll., on volunteer services. Act No. 248/1995 Coll., on public service companies. Act No. 227/1997 Coll., on foundation and endowment fund. 51

54 9 Community planning and partnership of municipalities Objectives The objective of this chapter is to characterize the community planning of social services and describe various forms of municipality partnership. Workload 4 hours Important keywords community planning community plan partnership municipality clients providers contracting authorities 9.1 Community planning Community planning is the modern method of development planning of public services (incl. social services) which respects the ideas and priorities of communities (regions, municipalities) and their members. A characteristic feature of this method is the emphasis on: involvement of all the competent people, dialogue and negotiation among participants, achievement of a result on behalf of the community. Community planning: is a method for planning of social services on the level of municipalities or counties, is an open process of identifying needs and of finding the best resources and solutions, 52

55 is a means of involvement of all participants, uses negotiation as a main principle, has a great potential for establishing strategic development plans, involves municipalities into micro regions, creates clusters of municipalities, allows drawing of funds for social services from the regional or state budget etc. 9.2 Goals of community planning and its participants The main aims of community planning are the following: enhancement of social cohesion in a community, planning of social services based on identification of the community needs, achieving an agreement among all participants in community planning and the agreement s continuous renewal, optimization of the social services network according to the actual needs of the community. Participants of the community planning There are three main players in the market of social services. They are referred to as: - clients, - providers, - submitters (contracting authorities). Scheme 18: The Triangle of participants in community planning CLIENTS PROVIDERS SUBMITTERS 53

56 Clients receive the services, providers provide social services and submitters are the contracting authorities of social services they organize and finance the provision of social services in relevant region. 9.3 Partnership of municipalities Municipalities play the important role in regional development. These elementary units of public administration often create various forms of partnerships to be more effective and provide better services. Effective cooperation helps the municipalities achieve strategic goals in the respective region. This mostly concerns the projects which individual municipalities cannot realize on their own. The principles of cooperation between municipalities are given by the law on municipalities (Act No. 128/2000 Coll., on municipalities). Cooperation is a very important element of the effective functioning of public administration and regional development. Its importance is high due to the synergistic effect which refers to the fact that working together creates higher outputs than working alone. Municipalities cooperate in order to meet legislative requirements and the requirements of their residents, for example in accommodation, transport, health and safety protection, education, culture, and other services. According to the Act No. 128/200 Coll., municipalities can cooperate as follows: 1. Specific services being subject of pursuant of contract agreement, such as construction of immovable assets (buildings) for public use. 2. Municipality cluster made pursuant of contract agreement, which is a higher form of municipality cooperation (cluster members can be municipalities only), on common tasks and goals. These may be in education, social services, culture, environment protection, tourism, etc. 3. Through businesses with legal entity status, set up between two or more municipalities, according to the Czech commercial code. In general, types of cooperation, conditions, cooperating subjects and instruments used can be very extensive. According to Galvasová et al. (2007), if sorted by their function, the partnerships can comprise: - knowledge and information dissemination, - cooperation in negotiation, - coordination in development, - providing of public services, - execution of development projects. If sorted by subjects involved: - inter-municipality cooperation, - cooperation of municipalities with the private sector (both profit and non-profit), 54

57 - cooperation of municipalities with other subjects of public administration. Note: Differentiated according to task, the inter-municipality cooperation may take forms of general development of a region, development of a particular aspect (monothematic cooperation), particular problem solving (Galvasová et al., 2007, p. 24). Forms of cooperation, despite the above-mentioned differentiation, represent the legal and organizational characteristics of the whole system. Galvasová et al. (2007) distinguish between the following forms of municipality cooperation in the Czech Republic according to the region and the subjects involved: 1. Intra-municipality cooperation at the regional level: - Voluntary partnership of municipalities. - Single legal entity. - Contract agreement for a particular service. 2. Cooperation between municipalities and other subjects in a region: - Local action groups (MAS). - Local agenda 21 (MA21). - Public-private-partnerships (PPP). - Corporation of legal entities. 3. National-level municipality cooperation: - Union of Towns and Municipalities of the Czech Rep. ( SMO of the Czech Rep.). - Union of Healthy Cities ( NSZM of the Czech Rep.). 4. International cooperation of municipalities, i.e. municipalities of different states: - Euro regions. - City/municipality partners. - Cross border impulse centers (GIZ). According to the Union of Towns and Municipalities website ( cooperation of municipalities includes a whole scale of activities having positive effect on municipalities and local inhabitants. These benefits are primarily: - increased European and global awareness, - increased chance of obtaining EU funds, - improved services provided to citizens, - increased working experience of public administration employees. Note According to Binek and Galvasová (2007, p. 2), a prerequisite for municipality cooperation is the mutual understanding. The Regional principle is therefore one of the pillars of future cooperation. Another prerequisite for effective cooperation is the principle of subsidiarity, which means that decision making must be performed and 55

58 responsibility taken at the level closest to people. These principles should be taken into account when forming new partnerships. Study questions 1. What are the main characteristic features of community planning? 2. What are the goals of community planning? 3. Describe the participants of community planning. Summary Community planning is a modern method of development planning of public services (incl. social services). The main participants of the community planning are the clients, providers and submitters (contracting authorities). Cooperation between municipalities is given by the law on municipalities (Act No. 128/2000 Coll., on municipalities). Recommended literature BACHMANN, P. Management neziskové organizace (Management of Non-profit Organization). 1 st edition. Hradec Králové: Gaudeamus, p. ISBN BEDRNOVÁ, E.; NOVÝ, I. Psychologie a sociologie řízení (Psychology and sociology management). 1 st edition. Praha: Management Press, p. ISBN BOUKAL, P. Ekonomika a financování neziskových organizací (Economics and Financing of Non-profit Organizations). Praha: OECONOMICA, p. ISBN BROWN, H. H.; RUHL, D. L. Breakthrough Management for Not-for-Profit Organizations. Beyond Survival in the 21 st century. Praeger Publisher, p. ISBN ČEPELKA, O. Práce s veřejností v nepodnikatelském sektoru (Work with public in non entrepreneurial sector). Liberec: Nadace Omega, s. ISBN ČMEJREK, J.; KOPŘIVA, R. Základy veřejné správy (Fundamentals of Public Administration). 1 st edition. Praha: PEF ČZU, p. ISBN DEFOURNY, J. Social Enterprise in an Enlarged Europe: Concept and Realities. [online] p. [cit ]. Available at: FISCHER, R.; URY, W. Getting to Yes: Negotiation Agreement Without Giving In. 3 rd edition. New York: Penguin Books, p. ISBN HANNAGAN, T. J. Marketing pro neziskový sektor (Marketing for non-profit sector). Praha: Management Press, p. ISBN

59 HLOUŠEK, J.; HLOUŠKOVÁ, Z. Získávání zdrojů na aktivity NNO působící v sociální oblasti (Fundraising Activities to NGOs Operated in Social Area). 1 st edition. Hradec Králové: Gaudeamus, p. ISBN HYÁNEK, V.; PROUZOVÁ, Z.; ŠKARABELOVÁ, S. et al. Neziskové organizace ve veřejných službách (Non-profit Organizations in Public Services). 1 st edition. Brno: Masarykova univerzita, p. ISBN KOTLER, P. Marketing management. Praha: Grada Publishing, p. ISBN LABOUTKOVÁ, Š. The Establishment of NGOs As One Growing Part of Developing Interest Groups in the Czech Republic. E+M Economy and Management, 2009, No. 1, pp ISSN OCHRANA, F.; PAVEL, J.; VÍTEK, L. et al. Veřejný sektor a veřejné finance - financování nepodnikatelských a podnikatelských aktivit (Public Sector and Public Finances - financing of non entrepreneurial and entrepreneurial activities). 1 st edition. Praha: Grada Publishing, p. ISBN REKTOŘÍK, J. ET AL. Organizace neziskového sektoru základy teorie, ekonomiky a řízení (Non-profit organizations fundamentals of theory, economy and management). Praha: Ekopress, p. ISBN SARGEANT, A. Marketing Management for Nonprofit Organizations. 3 rd edition. Oxford University Press, New York, p. ISBN SMITH, BUCKLIN and Associates, Inc. The Complete Guide to Nonprofit Management. 2 nd edition. John Wiley and Sons p. ISBN ŠIMKOVÁ, E. Základy ekonomie a drobného podnikání (Introduction to Economics and Small Business). 3 rd actual. edition. Hradec Králové: Gaudeamus, p. ISBN SKOVAJSA, M. et al. Občanský sektor - organizovaná občanská společnost v České republice (Civil sector organized civil society in the Czech Republic). Praha: Portál, p. ISBN ŠIMKOVÁ, E. Management a marketing v praxi neziskových organizací (Management and Marketing in Practice of Non-profit Organizations). 5 th edition. Hradec Králové: Gaudeamus, p. ISBN ŠEDIVÝ, M.; MEDLÍKOVÁ, O. Public relations, fundraising a lobbing pro neziskové organizace (Public relations, fundraising and lobbying for non-profit organizations). 1 st edition. Praha: Grada Publishing a.s., p. ISBN TRUNEČEK, J. et al. Management v informační společnosti (Management in information society). Praha: VŠE, p. ISBN UNITED NATIONS. Handbook on Non-Profit Institutions in the System of National Accounts. 1 st edition. New York: United Nations, p. ISBN Available at: VÉRICOURT, F.; LOBO, S.M. Resource and Revenue Management in Nonprofit Operations. [online] p. [cit ]. Available at: Legislative documents: Act No. 108/2006 Coll., on social services. Act No. 586/1992 Coll., on taxes revenue. Act No. 262/2006 Coll., labor code. Act No. 198/2002 Coll., on volunteer services. Act No. 248/1995 Coll., on public service companies. Act No. 227/1997 Coll., on foundation and endowment fund. 57

60 Glossary After-sales services a service provided by the firms (producers or their agent) after the product/service is sold (e.g. transport services, engagement and revision of the machinery etc.). Borrowing money advanced to a borrower. Brand name a maker s name (make or trade-mark), often registered for the purpose of its protection; usually visible on goods to make it identifiable for customers. Bulk quantity, volume, large mass or amount of goods. Business a person or organization making a product, buying and selling goods or providing services. Capital accumulated wealth used for the future gain. Cash money in the form of coins and banknotes which may be used for immediate payment. Chain of distribution the system of distribution from the manufacturer to the consumers. Commerce a financial transaction, esp. buying and selling in a large scale; it includes all the various business operations, such as banking, insurance, transport, communications, promotion etc. Commodity a product whoch can be bought and sold (e.g. commodity market). Competition a rivalry between businesses; comprises various methods (e.g. selling at the lowest price, promoting better quality of goods, and providing better conditions for buying). Competitive an ability to woo buyers away from rival products in the market (lower price, higher quality, better conditions for buying etc.). Consumer a person whose needs are satisfied by producers, a person who consumes the bought products and services and does not resell them. Copy the words used in advertisements, usually in a pregnant form. Copywriter a person writing materials for advertisements, usually with a knowledge of marketing. Cost the price paid to a supplier; it is usually the basis for determination of the price. Currency the medium of exchange used in a particular country. Customer a person who buys goods or uses services and thus creates the demand on the market. 58

61 Dealer a person who sells goods to consumers with the aim to gain the profit. Delivery taking goods to houses of the buyers (free or paid delivery services). Demand the amount of goods or services that people are both willing and able to buy (arises on the basis of consumer behavior). Devaluation a cutting of the external value of a state currency; it results in the support of exported products. Distribution the activities for getting goods from the manufacturer to the consumers. Domestic production production of goods made in home market. Economy an organized system of production, distribution and consumption of goods and services (e.g. a free / market / mixed economy). Economics the scientific field dealing with the production, distribution and consumption of goods and services, conditions of a country (e.g. the economics of a country). Economist a social scientist with the special knowledge of economics and economic thinking. Electronic mail messages or information transmitted by computer network. Entrepreneur/enterpriser a person who manages the production factors (labor, land and capital) to produce and sell goods for gaining profit or loss. Final product end product product at the end of a production process distributed to consumers. Finished product a manufactured product ready to be sold. Foreign trade trade with foreign countries; external trade. Franchise a license authorizing others to use a company s name (brand), sell its goods or services. Go public to become a public company by selling shares to the public (and usually serve to society). Goods objects (articles, commodities, products), as opposed to services, destined to be sold or purchased in a market. Gross domestic product (GDP) annual value of final products (goods and services) produced inside a country. Gross national product (GNP) annual value of final products (goods and services) in a country, including income from other countries. Industry a group of companies which make the same type of products, e.g. building industry, car industry, chemistry industry etc. Initial capital the amount of capital needed for starting a business. 59

62 Inputs elements entering into the production process and making it work (e.g. human resources, finance, material etc.). Invisible trade trade in services (immaterial products, such as insurance, tourism, banking services, transport etc.). Joint venture a company formed by a conjoint of two or more other companies in order to produce together. Labor (human) work, the use of bodily strength or skill, labor force. Laissez-faire a practice of governmental abstention from interference in the workings of the market. Launch a product/service introduce a new product/service to the market. Loan something lent, usually money, on the basis of mutual agreement i.e. agreed rate, agreed time. Macroeconomics a field of economics which studies economic facts in broad aggregates and examines the economy as a whole, at the national level. Manufacturer a person (or organization) that produces goods on a large scale, using machinery. Marketing activities intended to attract consumers (so that they buy a product) using such means as advertising, sales promotion, direct marketing tools, pricing, carrying out market research, testing new products, and other activities taking place before and after the goods and services production. Marketing mix marketing tools which a company may effectively use in order to strengthen demand for its products; it is often called as the four Ps due to the particular elements of marketing mix: Product, Price, Place and Promotion. Marketing research a process of finding out what kind of goods and services consumers want to buy and how to persuade them to buy. Market segments include a large groups of consumers who have similar needs and wants; the criteria for segmentation are the following: age, income, leisure time activities and interests, life style, family structure (whether they are single or live with someone, how many children they have etc.). Microeconomics an area of economics examining the economic behavior of economic subjects (individual firms, consumers etc.). Market a place where buyers and sellers meet to trade in goods and services (e.g. fish market). Mass production production of a large quantity of goods. Need goods or services that a person must have in order to maintain his/her standard. Packaging one of the tools of marketing mix; also the process of placing goods into boxes (wrapping/containers) in which they are sold to the costumers. 60

63 Primary industry industry concerned with collecting and extracting materials from the nature, e.g. agriculture (farming, fishing), mining etc. Price the monetary value of goods or services. Product an item which is made or manufactured. Production process of making or manufacturing goods for sale. Profit a financial gain; the difference between the income and expenses. Provision supply, providing for future consumption, e.g. the provision of cars, groceries, machines etc. to domestic consumers. Retailer a person selling goods directly to the consumers, tradesman who sells by retail. Sales promotion the process of supporting the sales of goods and services by using all helpful methods, such as advertising, personal persuasion of potential customers, provision of free samples or gifts etc. Savings sum of money saved for the future use in order to be invested in the buying of goods/services, property etc. Secondary industry industry which uses materials generated by primary industries in order to produce commodities. Set price determine the price according to the situation in the market (prevalence of supply or demand). Set up (v) establish an organization or create something. Staff the employees in the organization. Stock a store of goods (cars, clothes etc.) for sale. Subsidy money given by the government to domestic entrepreneurs; the purpose is to give them an advantage against foreign competing organizations. Supply the amount of goods or services available at any particular price; it is offered for sale in the market at a certain time and price; the term also means to provide something which is needed. Target audience, target group the group of people who the advertiser is trying to address in order to sell them goods or provide services. Tax a compulsory contribution to the state revenue. Tertiary industry industry which provides services, e.g. trade, insurance, banking, personal services, tourism services etc. The key advertising media: commercials television and radio, press, magazines, billboards, posters, internet etc. Trade is the business of buying and selling goods. 61

64 Transport the activities associated with carrying persons or goods from one place to another by means of transport, such as bus, car, train, plane, ship etc., with the usage of transport infrastructure, such as roads, railway, canals, air routes etc. Visible trade a trade in goods (material products, such as raw materials, machinery, equipments etc.). Wholesaler the middleman between the manufacturer and retailer; a person who sells by wholesale, in a large scale. Yield a profit to gain a profit. Recommended literature KAFTAN, M. New English in Economics. Praha: Karolinum, p. ISBN KALINA, M. et al. Economy in English. 3 rd edition. Praha: VŠE, p. ISBN

65 List of final paper topics 1. Describe various types of non-profit organizations that operate in your region. 2. Describe the services that are provided by non-profit organizations in your region. 3. Describe the clients who use services of non-profit organizations in your region. 4. Describe the process of social services provision. 5. What do you think about the activities of the non-profit organizations in the Czech Republic? 6. Describe the fundraising in a specific non-profit organization. 7. Give some good example of fundraising. 8. Devise a training program for social workers in the selected non-profit organization. 9. As a project, devise an ethical code for social workers in the selected non-profit organization. 10. Describe the promotion activities in the selected non-profit organization. Final paper requirements: printed paper, 5-8 pages long (A4 format) recommended design: 1. FRONT PAGE. 2. INTRODUCTION. 3. TOPIC DESCRIPTION (ARGUMENTATION). 4. CONCLUSION (+ OWN PROPOSAL). 5. REFERENCES. 63

66 List of schemes SCHEME 1: Three basic economic problems 11 SCHEME 2: Three basic economic subjects 12 SCHEME 3: Economic sectors and subsectors 16 SCHEME 4: Production process.. 17 SCHEME 5: Types of production process.. 17 SCHEME 6: Types of market elements.. 21 SCHEME 7: Demand curve..22 SCHEME 8: Supply curve.22 SCHEME 9: Division of national economy..24 SCHEME 10: Characteristics of social sphere..25 SCHEME 11: Three pillars of sustainable development..26 SCHEME 12: Problems of social development TABLE 1: Difference of the profit and non-profit sectors..26 SCHEME 13: Providing of social services..26 SCHEME 14: Process of social services providing..36 TABLE 2: Components of the process of social services providing.37 SCHEME 15: Managerial pyramid SCHEME 16: Fundraising position in organization.. 46 TABLE 3: Forms of fundraising.47 SCHEME 17: Pyramid of donors SCHEME 18: The Triangle of participants in community planning.52 64

67 Non-profit Sector. Study material to the course Introduction to Adult Education in the field of study Social pathology and prevention. Author: Ing. Eva Šimková, Ph.D. Edition: 1st Published by: University of Hradec Králové, 2014 Pages: 64 65