Business Ethics-Social Issues
Introduction- Operation of Nonprofit Groups like Businesses and its Potential Benefits
Based on the profitability exhibited by the Portland, Oregon Goodwill as detailed in the case study, there is definite evidence to suggest that nonprofit groups should operate like businesses in regard to strategy, conducting market research, the hiring of experienced executives, discarding unprofitable parts of the nonprofit’s operations, etc.
Of course, the benefits of doing this include increased profits which will benefit the charity to a greater degree, longevity of the nonprofit group, and decreased reliance on government funding which could be reduced or discontinued at any time, which would in many cases bring about the demise of the group in question. Potential dangers of such actions could include the loss of tax-exempt status, the loss of jobs due to layoffs and strategic changes, and the very real possibility that, like for-profit businesses, plans could fail and the group collapse (Kosseff, 2004).
Should Businesses Operate More Like Nonprofits? Potential Benefits/Dangers of Doing So
Businesses should operate more like nonprofits, at least from the standpoint of fiscal responsibility, commitment at least on a basic level to the betterment of the general public, the making of critical decisions without delays, and the recruiting of executives who are not necessarily just someone who may be connected to others in the organization in a form of patronage hiring, but rather in terms of securing the most talented individuals who will deliver the best results for the betterment of the business itself.
The benefits of doing so would be a better return to stockholders and stakeholders, vastly improved public image of the given company, and very likely an increase in the viability of the business over the long term. On the other hand, commercial companies cannot become too involved in charity-like activities, because if the focus of profit maximization is lost, the firm can in fact be harmed more than helped.
Should Charities that Compete against Businesses be forced to Pay Taxes?
Charities that compete against businesses should not be forced to pay taxes for several reasons; first, the public interests that charities serve are so important that to tax these organizations could in fact end the vital work that these charities perform. Also, taxation would very likely reduce the amount of help that charities can provide to those in need, which defeats the purpose of the charities themselves (Kosseff). If we tax any charity, all charities, it would seem, would be harmed.
Managers at Charities being Expected to Work for Less Than Their Colleagues in Corporations
In one humble opinion, managers at charities should not be expected to work for less than their colleagues in corporations if the charity managers can be demonstrated to deliver results that make the compensation worthwhile. Conversely, if those same managers are not getting results that are sufficient, either a pay reduction or a change of management is in order.
Also, as Kosseff relates in the case, the retention of talented management like Miller necessitates the offering of competitive salary, to keep him from being lured away by larger paychecks from other, commercial employers. As a side issue, it would seem that the advancement of a mission of a given charity is the important factor upon which to focus, not the money that managers are paid; rather, the return on the money paid to the manager should be the real factor to be evaluated.
Morality/Immorality of Miller’s Compensation Package
Miller’s compensation package is not immoral if looked at from a cost/return perspective; in other words, the dollars that Miller was paid proved to be a wise investment, as he performed in his executive position like no one who came before him was ever able to do. Simply put, this was not money wasted; rather, it was money that was put into a resource-Miller, and received favorable results.
Standards to be Used to Determine if a Nonprofit Administrator is Receiving Excessive Compensation
Kosseff related in the case that excessive compensation becomes as such when the moral obligation of nonprofits to maintain the spirit of their mission in all areas, especially compensation. This is valid, to a point; in the case that was presented, as discussed earlier, Miller’s compensation was in essence an investment with an impressive return- it was his performance which gave the Portland Goodwill a tremendous boost in revenue, spreading of mission, job opportunities, and expansion.
As such, it can fairly be argued that this compensation is one which pays dividends many times over, so it is not something which is a liability, but rather an asset, which is a fair way to judge excessive compensation. On the other hand, if Miller essentially damaged the organization and its revenues, effectiveness and service to the community plummeted, then one could say that his compensation was an unneeded excess.
Conclusion-Personal Observations on Donation of Used Items to Portland, Oregon Goodwill
In conclusion, given the facts of the case, I would still donate used items to Portland, Oregon, Goodwill for several reasons, not the least of which is the ability to look at the big picture in this situation. As Kosseff points out in the case, the Portland Goodwill was aggressive enough to put in place a talented executive who ultimately was able to make the difficult decisions and design the strategy which gave the organization the ability to reach new heights of revenue.
This revenue in large part was put to use helping those whom it was intended to help, which was the goal in the first place. Additionally, no matter what one may say about the direction that the Portland Goodwill took, it is a fact, according to Kosseff, that the local Goodwill workforce was almost tripled, giving economic opportunity to more people, and less money was needed from government sources, thereby helping all taxpaying citizens by reducing reliance on them. The bottom line would seem that this is an efficient organization, which I would certainly support.
Kosseff, J. (2004, March 14). Charity, Inc.
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