The history of nonprofit organizations shows a great revolution concerning the matter of the nonprofit organization's development and funding in the United States of America. Beginning in the 1970s, the financing of the nonprofit organization was very low. By definition, the term nonprofit organization is complex. First, it implies an entity under the classification of the Internal Revenue Code as 501(C). It also means an organization which is free from taxes but also do not allow for deductibility of the donation. These organizations provide services and goods for the community ( Hall, 2016). The Law in many countries and states in the United States of America permit these organizations to provide services and good but on a nonprofit basis. In this case, these organizations get funds from different sources to sustain their organization operations. They get funds from donations, income, and sales. However, it largely depend on government funding. According to Hall (2016), it is an implication that legal and government regulations affect the operation of these organizations since they have to operate in a manner that is desired by the governments.
Since the 1970s, the nonprofit organization findings have been fluctuating. When the concept of the charitable organizations was born, the government did not welcome the idea in good faith. It was like a form of competition, and thus, there were strict laws that did not allow for their expansion since there were fewer findings from the government ( Hall, 2016). For this case, these organizations did not get much money from the government for their operations. They had to rely on different donation and wealthy individuals who were supporting them partly. They also had to rely on the owners since these organizations did not have many sponsors, and the shareholders within their organization structure ( Hall, 2016). Things changed in 1950 to 1880s when many wealthy individuals and business entrepreneurs got interested and started pumping money on these organizations. The government regulations also were reformed, and the nonprofit organization got a lot of funds from sponsors and the governments. However, another period of reduction in funding came between the years of 2006 to 2013, when there was an economic depression that affected the nonprofit organization (McKeever, 2015). However, the statistics on the United States Giving on the matter of funding the nonprofit organizations indicates that since the year 2014, the governments have been spending a lot of money on these organizations and the funding has been on the rise hitting a staggering $355.16billion in the year 2014 (McKeever, 2015). From the United States giving statistics, the different nonprofit organization has been receiving increased funding, which has been on the rise for the last five years. Hall (2016) asserts that this is an implication that even though the nonprofit organization faced a lot of challenges in the past and mostly during the recession, they have picked up and currently, the funding is right to maintain the organization.
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The factors that Contribute to Funding Fluctuation in Non-profit Organizations
There are three factors which contribute to the nonprofit organizations' funding fluctuation. The first is government regulations. The government, through its legal departments, placed restrictions on the size and the operations of these organizations, mostly in the 1970s. As a result, these organizations had limitations which also affected their funding. The next factor is inadequate sponsors. Inadequate sponsors changed the nonprofit organizations' funding, mostly in the 1970s, 1950, and 1980s (McKeever, 2015). Lastly, economic fluctuation is also a critical matter in this case. The reduced funding between the year 2007 and 2013 was caused by economic depression in the country that affected the government and the sponsors. All these factors combine to create an oscillating graph for the nonprofit organization funding
References
Hall, P. D., (2016). Historical perspectives on nonprofit organizations in the United States. The Jossey-Bass handbook of nonprofit leadership and management , 3-42.
McKeever, B. S., (2015). The Nonprofit Sector in Brief 2015: Public Charities. Giving, and .
