Editing Nonprofit organization (section)

== Criticism ==

=== Founder's syndrome ===
{{Main|Founder's syndrome}}
Founder's syndrome is an issue organizations experience as they expand. Dynamic founders, who have a strong vision of how to operate the project, try to retain control of the organization, even as new employees or volunteers want to expand the project's scope or change policy.<ref>{{cite journal|last1=Block|first1=Stephen R.|last2=Rosenberg|first2=Steven|title=Toward and Understanding of Founder's Syndrome|journal=Nonprofit Management & Leadership|date=Summer 2002|volume=12|issue=4|page=353|doi=10.1002/nml.12403}}</ref>

=== Financial mismanagement ===
[[Financial mismanagement]] is a particular problem with NPOs because the employees are not accountable to anyone who has a direct stake in the organization. For example, an employee may start a new program without disclosing its complete liabilities. The employee may be rewarded for improving the NPO's reputation, making other employees happy, and attracting new donors. Liabilities promised on the full faith and credit of the organization but not recorded anywhere constitute [[accounting fraud]]. But even indirect liabilities negatively affect the financial sustainability of the NPO, and the NPO will have financial problems unless strict controls are instated.<ref>{{cite book|title=Audit Guide for Small Nonprofit Organizations|url=http://www.vscpa.com/content/Visitors/Nonprofit_Resources/Audit_Guide.aspx|access-date=21 July 2010|archive-url=https://web.archive.org/web/20110104103321/http://www.vscpa.com/content/Visitors/Nonprofit_Resources/Audit_Guide.aspx|archive-date=4 January 2011|url-status=dead}}</ref> Some commenters have argued that the receipt of significant funding from large for-profit corporations can ultimately alter the NPO's functions.<ref>{{cite news|editor1-first=M. |editor1-last=Edwards |editor2-first=D. |editor2-last=Hulme |date=2002|title= NGO Performance and Accountability: Introduction and Overview (Chapter 11)|work= The Earthscan Reader on NGO Management|location= UK|publisher= Earthscan Publications Ltd.}}</ref> A frequent measure of an NPO's efficiency is its [[Expense ratio#Nonprofit organizations|expense ratio]] (i.e. expenditures on things other than its programs, divided by its total expenditures). [[Tax exempt]] status of NPOs can result in some cases, such as mismanagement, in negative value for society.<ref name="o561">{{cite journal | last=Gamble | first=Edward N. | last2=Muñoz | first2=Pablo | title=When Tax-Exempt Nonprofits Detract Value from Society | journal=Academy of Management Perspectives | volume=36 | issue=1 | date=2022 | issn=1558-9080 | doi=10.5465/amp.2018.0027 | doi-access=free | pages=50–92 | url=https://durham-repository.worktribe.com/preview/1239986/36272.pdf | access-date=5 February 2025}}</ref>

=== Lower wages ===
There are reports of major [[Shortage#Labour shortage|labor shortage]]s in the nonprofit sector today, particularly for management positions.<ref>{{cite news|author=Chertavian, G.|title=Nonprofits Need to Compete for Top Talent|url=https://hbr.org/2013/03/nonprofits-need-to-compete-for|work=Harvard Business Review|date=March 2013|access-date=10 December 2014|archive-date=20 March 2021|archive-url=https://web.archive.org/web/20210320102715/https://hbr.org/2013/03/nonprofits-need-to-compete-for|url-status=live}}</ref><ref name="auto">{{cite web | last=Maw | first=Liz | title=Winning the Talent Game | url=https://ssir.org/articles/entry/winning_the_talent_game | date=9 July 2014 | work=Stanford Social Innovation Review | access-date=6 August 2018 | archive-url=https://web.archive.org/web/20180807002149/https://ssir.org/articles/entry/winning_the_talent_game | archive-date=7 August 2018 | url-status=dead }}</ref> While many established NPOs are well-funded and comparative to their [[public sector]] competitors, many more are independent and must be creative with which incentives they use to attract and maintain people. The initial interest for many is the remuneration package, though many who have been questioned after leaving an NPO have reported that it was stressful work environments and the workload.<ref>{{cite journal|last1 = Becchetti|first1 = Leonardo|last2 = Castriota|first2 = Stefano|last3 = Depedri|first3 = Sara|title = Working in the for-profit versus not-for-profit sector: what difference does it make? An inquiry on preferences of voluntary and involuntary movers|url = https://academic.oup.com/icc/article/23/4/1087/819911|journal = Industrial and Corporate Change|volume = 23|issue = 4|date = 1 August 2014|pages = 1087–1120|doi = 10.1093/icc/dtt044|doi-access = free|access-date = 28 March 2018|archive-date = 20 March 2021|archive-url = https://web.archive.org/web/20210320102733/https://academic.oup.com/icc/article/23/4/1087/819911|url-status = live}}</ref>

Public- and private-sector employment have, for the most part, been able to offer more to their employees than most nonprofit agencies throughout history. Either in the form of higher wages, more comprehensive benefit packages, or less tedious work, the public and private sectors have enjoyed an advantage over NPOs in attracting employees. Traditionally, the NPO has attracted mission-driven individuals who want to assist their chosen cause. Compounding the issue is that some NPOs do not operate in a manner similar to most businesses, or only seasonally. This leads many young and driven employees to forego NPOs in favor of more stable employment. Today, however, nonprofit organizations are adopting methods used by their competitors and finding new means to retain their employees and attract the best of the newly minted workforce.<ref>{{cite web|last = Cohen|first = R.|title = Nonprofit Salaries: Achieving Parity with the Private Sector|url = https://nonprofitquarterly.org/management/5506-nonprofit-salaries-achieving-parity-with-the-private-sector.html|date = 21 June 2010|work = Nonprofit Quarterly|access-date = 10 December 2014|archive-url = https://web.archive.org/web/20141211005101/https://nonprofitquarterly.org/management/5506-nonprofit-salaries-achieving-parity-with-the-private-sector.html|archive-date = 11 December 2014|url-status = dead}}</ref>

One article states that most nonprofits will never be able to match the pay of the private sector<ref>{{cite web |last = Coffman |first = S. |title = Nonprofits Can Compete with Employee Benefits |url = http://www.bizjournals.com/columbus/stories/2002/12/23/focus4.html?page=all |date = 23 December 2002 |work = Columbus Business First |access-date = 10 December 2014 |archive-date = 20 March 2021 |archive-url = https://web.archive.org/web/20210320102708/https://www.bizjournals.com/columbus/stories/2002/12/23/focus4.html?page=all |url-status = live }}</ref> and therefore should focus their attention on benefits packages, incentives and implementing pleasurable work environments. A good environment is ranked higher than salary and pressure of work.<ref name="auto" /> NPOs are encouraged to pay as much as they are able and offer a low-stress work environment that the employee can associate him or herself positively with. Other incentives that should be implemented are generous vacation allowances or flexible work hours.<ref>{{cite news|last = Fox|first = T.|title = How to Compete with the Private Sector for Young Workers|url = https://www.washingtonpost.com/blogs/on-leadership/wp/2014/03/18/how-to-compete-with-the-private-sector-for-young-workers/|newspaper = The Washington Post|date = 18 March 2014|access-date = 6 September 2017|archive-date = 20 March 2021|archive-url = https://web.archive.org/web/20210320102730/https://www.washingtonpost.com/news/on-leadership/wp/2014/03/18/how-to-compete-with-the-private-sector-for-young-workers/|url-status = live}}</ref>