PART 1

An organization, which works towards the wellbeing of the community is often

referred to as a Not for Profit Organization (NPO). A number of stakeholders have to
be catered to by these organizations (Pelchat, 2005).
Non Governmental Organizations (NGOs), are considered to a key source of
dealing with various causes. A number of social service programs are undertaken by
NPOs like education, poverty, child labour health etc.
The most important objective for a NPO is not to earn profit but rather to increase the
level of sustainability. However, while catering to the various stakeholders and
running charities , NPOs have to overcome and face many issues and problems.
The report identifies the problems which are faced by NPOs today, followed by a
close analysis of Skill Share Internationals ethical aspects and finances. Also
focusing on how the organization will be able to allocate their funds and be able to
apply beneficial strategies (Anheie, 2000).
A NPO is engaged in a number of plans at the same time, which eventually turns into a
hindrance and issue (Foundation for Community Association Research, 2001). Strategic
Planning, therefore is one of the major problems faced by NPOs today and is also
influenced by the pressure built by stakeholders (McNamara, n.d.).

One of the major issues that NPOs face is lack of resources also referred to as
Resource Dependency. These may be in the form of management services, funds,
employees and other similar sources. Organizations may run short of resources. An
example would be of the Japan Cat Group (JCN). The group has no animal welfare
organization, to discuss matters with and therefore has to get all its resources at a

grassroots level, in terms of negotiating with veterinarians, and other key

stakeholders (Ocheltree, n.d.)
Political issues influence an organizations operations. A case in Jordan suggested
the deregulation of NPOs actions and work, which was caused because of the
changes in the political system. This happening attested that political activities,
changes, happenings and other political aspects affect and rather disturb the working
of an NPO. (Wiktorowicz, 2002)

Certain auditing standards have been devised for the NPOs on the basis of social
service numbers. This generates problems when it comes to maintaining the
authenticity of NGOs accounts. Due to this reason, Auditing and Accounting act
as great barriers for the NPOs. In Pakistan, NGOs have proposed a bill to the
government. It focuses giving greater accountability to NPOs (Pasha & Iqbal, 2002).
In an NPO, the task of analyzing and calculating the performance, ability and
efficiency of the ones working is assigned to nobody. So, Management and
Governance are a major setback for NPOs. (Lewis, 2005)
Laws & Regulations: The 1993 Act states that NGOs with an income more than
5000, in England and Wales have to register their organization. (Charity
Commission, 2011) Accounts have to be prepared in accordance with SORP. A
mandatory legal requirement is with reference to the 1993 Act. Accounts should be
audited by an independent author if the gross income of the organization is more

than 25000. This is stated under Circular A-133 in accordance with Auditing Non
Profit Entity law. (Charity Commission, 2010) In China, the frequent change of laws
for (shiye danwei) led to major mishaps for Chinese NPOs and with the Cultural
Revolution major amendments were made (Simon, 2005).
NPOs have also faced problems in terms of monetary matters due to taxation. This
is due to the concept of taxation being different in various countries causing a major
issue of judgment and decision making by the benefactors.
Depending upon the financial resources allocated to different branches in a firm, the
Budget of the NPO is decided. Thus, Financial Management and Budgeting are
major issues for the Non Profit Organizations. They not only hinder specific activities
but also cause a problem in the regular day-to-day functioning. (Malena, 1995) A
problem as such was faced by Kenyan NGOs, due to the global recession and
political transformation, a geopolitical change in and the North and foreign policy
(Mbote, n.d.). Which led to closure of weak NGOs and reduction of services.
(Kameri, 2000)
PART 2
As every not-for-profit organization aims, Skill Share also aims at serving the
underprivileged and unfortunate people to bring about a social and economic
development. Furthermore, the emphasis is laid on the uplifting of the society being
the key working area for the organization. Skill Share International (SKI) aims to
assist the not-for-profit organizations. The main objective of SKI is to provide support
to the associate organizations working mainly in Asia and Africa. Targeting these
areas, and working with a motive of sustainable development, SKI aims at equality
and eradicating all the evils from the society. Education being a major concern, Skill
Share also facilitates its services to the underprivileged in countries like Nepal, India,
Tanzania, Kenya and countries in Southern Africa to name a few (SKI, 2011). Also
Skill Share International has initiated in bringing upon a leadership development in
the developing and under developed countries to create awareness related to
international issues and eradicating poverty focusing on the global health issues.

Skill Share International has also working under a program called Coaching for hope
associating with the Foot ball association in order to spread awareness amongst the
disabled and orphans about the HIV virus and ailments such as AIDS, for example
Breaking the Cycle of Vulnerability program was conducted in Southern countries of
Africa the hardest hit of HIV and AIDS to ensure the alertness and support the
people suffering from this ailment. Also the steps taken towards women
empowerment that is initiative taken to change the womens right as an ethical right,
recently in the year 2010. SKI is an organization that works for the social welfare and
economic development of people helping in eradicating the evils like poverty and
inequality from the society (SKI, 2011).

PART 3
Finances
Standards
It is important to analyze the finances of a not for profit organization; the annual
report of the Skill Share International has been examined. To provide this financial
outlooks for this organizations, it has been analyzed how successful is the SKI
organization in meeting the standards laid. Starting with Standard 1 which implies to
the relation that the expenses occurred due the program service establish should be
greater than 65% and as analyzed, for SKI it is recorded as 83.4% in FY07 and
84.9% and 82.7% in FY08 and FY09 respectively. According to the Standard 2
establishes the relation between total contribution and total funding expenses which
must be less than 35%, this standard has not been met by SKI as it crosses the limit
being 45.45% in 2007 while meeting the standard in 2008 and 2009 with 5.55% and
19.19%. The Standard 3 has been fulfilled which states that a not for profit
organization should not cross its unrestricted net assets more than thrice the past
year expense. As mentioned on the Page 15 of the SKI Annual Report, the Standard
4 has been met according to which the accounts should be prepared in accordance
with UK GAAP (Generally Accepted Accounting Practice). SKI stood fail in meeting
the Standard 5, as the information of breakdown of the administration and program
services have not been detailed. Having no confirmation of the facts that if the
expenses are jointly allocated or not, the Standard 6 also could not be met.
According to the next standard, Standard 7, the board of directors should provide
adequate information about the organizations operations and its staff, which has
been done by SKI evidently on Page 10 (SKI, 2009). Identifying the last standard
which has been fulfilled by SKI - Standard 8 the Director/ trustee should approve
all the expenses (program, administration), that can be found on Page 13 of the
report (Better Business Bureau, 2009).

PART 4
Every not-for-profit organization works for the welfare and benefit of the people. It is
essential for such an organization to carry out work taking into consideration the
social ethics. The Skill Share International ought to have policies, to invest and
obtain donations from diverse sources, which are ethically accepted in the society.
SKI, in the 2009, started with maneuver to eliminate from the society - poverty,
disparity and prejudice existing in the society. Various initiatives have been taken by
Skill Share to wipe out such tribulations. So as to create awareness for HIV and
AIDS, SKI started with six linked projects to improve the conditions in Southern
countries of Africa by providing support and livelihood to the sufferers, in the year
2009 (SKI, 2011). Sustainable development - being the most important motive of
Skill Share, such programs have been carried out. These activities need to be
ethically accepted so much so that the donors are able to insinuate in what areas is
SKI working in encouraging the social workers to keep working for the same in order
to develop sustainably. An organizations ethical policy is clearly reflected through the
donations that are being taken in. A donor also gets a thorough idea of how the
organization works. In context to the organization, it also helps to know the purpose
of the donors is being noble or not. And hence, Skill Share must not acknowledge
donations from organizations that tend to donate seeking for own benefits. Funds are
basis that help the society to develop and do away with poverty and other problems.
Skill Share must accept donations that are catered by Government and Government
bodies, whose motive is always the development of the economy towards a better
future. Also it should consider those organizations that are genuine and are willing to
support without self interest which may include the big corporate houses as they
donate selflessly. For example in order to get enormous donations, Skill Share can
ask for in the countries their operations are being carried out, like in India, corporate
companies like TATA, Reliance, Kingfisher, etc can be pronounced as help. Being a
not-for-profit organization, Skill Share can also ask for donations from the general
public without expecting proceeds. Being an organization with the main objecting of
removing elements like poverty, injustice and disparity, Skill Share must avoid
donations that are being catered from the organizations that have been accounted
for religious discrimination and selfish motive of donations. Also keeping an aim of
sustainable development, donations and proceeds should be accepted from the
organizations practicing environment healthy operations and are indulged in ecofriendly practices. SKI must not take in donations from the organizations that harm
the environment and are not working to the objective of sustainable development.
The main objective is to cater all the donations to the human development for the
social and economic development.

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