ARGUMENTA 0EC0N0M1CA No 2 (11)2001 PL ISSN 1233-5835
Barbara Iwankiewicz-Rak *
NON-GOVERNMENTAL ORGANIZATIONS
IN SOCIAL SERVICES IN POLAND
DURING THE TRANSFORMATION PROCESSES
OF THE POLISH ECONOMY
This paper presents the problems o f the development and roles o f private non-profit organizations in the Polish economy after the transformation process. The Author shows the main functions o f this organization and their classification. On the basis o f statistical data this paper dem onstrates the growth of the organizations, the dynamics o f establishing, their fields of activities, and sources of financial support in Poland.
INTRODUCTION
The transform ation of P olan d ’s social and econom ic systems have been taking place since 1989. In the transform ation processes, there are economic, financial and social barriers to the development of organizations (private or public), w hich provide social services. In spite of difficulties, the development of private non-profit organizations has accelerated in Poland from this time.
The privatization in the social services sector was an im portant element in the creation o f a market econom y, as it concerned the kind of needs, which, according to public opinion, should be discharged by the state. The new market rules changed the forms of ow nership and methods o f financing with relation to the m ajority o f organizations providing social services. T hey also led to the em ergence o f new, profit-oriented private companies in this sector, as well as organizations with a social, m unicipal or public status.
C urrently in Poland the social services may provide citizen s with three types of institutions:
- public organizations,
- p rivate business organizations,
- non-governm ental organizations (NGOs),
The public and non-governm ental organizations are non-profit institutions. In Poland, public organizations are re-evaluating their ro les and the role of the
social services sector. Private non-profit organizations (N G O s) and private business com panies are on the increase.
In my paper I present the problem s of developing non-governmental organizations - NGOs (or private Non-Profit O rganizations - NPOs) in Poland as institutions providing social services.
1. NON-GOVERNMENTAL ORGANIZATIONS - CHARACTERISTICS
P rivate non-profit organizations (NGOs) exist fo r purposes other than profit-m aking (Hansmann, 1980 pp. 835-901; Drucker, 1997 p. 7). They offer public goods, for example education, culture, art, health care, tourism and social security (Rados, 1996, p. 220; McCarthy, 1992, p. 29; Bowen, 1994, p. 5). They are creatures of econom ic forces and the needs o f society. They play a great role in the market econom y (Hammack, 1993, p. 23; Ben-Ner, 1986; Salam on, 1987). They provide social services and help local government to cover the needs of citizens (K ram er, 2000 pp. 1 - 23).
The m easure of profit organizations is profit, w hich is distributed among owners. B ut non-profit organizations have their successes in; providing services, covering citizens needs, perform ance of m issions and fund raising.
So we can show five functions o f non-profit organizations (Fric, 1999, p. 2): 1. T h e function of providing services,
2. T h e innovative function,
3. T h e advocacy or social change function,
4. T h e expressive and leadership development function, 5. T h e community - building and democratising function.
The m ain function of these organizations is providing various services not only for th eir members but also for special focus groups as (see fig.l):
- custom ers (users of services),
- public, including contributors and volunteers,
- trustees, who participate in the management of the organization, - society, which is affected by the activities (Kotler, 1982, p. 482).
Fig. 1. T he classification of the consum ers o f non-profit organizations Source: A uthor’s own.
The prim ary aim of non-profit organizations is to satisfy the wants of all the consum ers (Drucker, 1989, p. 88).
In the literature of economics there are many ways o f classifying non-profit organizations, which attests to the diversity of their structures (O ’Connel, 1991, p. 41; H ansm ann, 1980; H annagan, 1993, p. 7; Kotler, 1982, p. 480; McLeish, 1995, p. 221; Rados, 1996, p. 11). Figure 2 shows a synthesis of proposed classifications of non-profit organizations, from the point o f view of product criteria, sources of financing, forms of ow nership and management (Iw ankiew icz-R ak 1997).
A ccording to this figure, from the form of ow nership point of view, the organizations may be public or private. In practice, the organizational structure of non-profit organizations may take m ultiple forms. T his diversity results from the spontaneous character of their creation and the need fo r these institutions to adapt to the changing conditions in the process of perform ing their tasks.
S o u rces o f financ Donations, sponsoring Form o f board Form o f N on-profit organizations social m an a g em en t owner- Professio-ship P rivate Idea Organiza Product
Fig. 2. Classification of non-profit organizations
Source: B. Iwankiewicz-Rak: M arketing o f Non-Profit O rganizations. How to Adopt in Poland. AE. Wroclaw 1997 p. 156.
The product of a non-profit organization may be a service, an idea, an organization or a person; while the sources of financing m ay be contributions or subsidies from the central or local budget as well as private capital, donations, social work, revenues from a business activity (extra statutory) and fees charged from their m em bers or stakeholders (Y oung, 1982; Hannagan,
1993).
W ith respect to the organization form, the governing body of the organizations in question may be a professional board (appointed by the founders and consisting of specialists) or a social board (selected from among the o rganization’s members or its supporters).
2. THE DEVELOPING OF NON-PROFIT ORGANIZATIONS (NGOs) IN POLAND
The legal regulations of the transform ation period in P oland encourage the developm ent of voluntary associations and foundations that besides providing social services, also conduct profit-oriented activities (Ilczuk, 1995).
Figure 3 shows the dynamics o f non-governmental organizations in Poland. It shows the creation of these organizations each year from 1973 to 1997. It dem onstrates that most private non-profit organizations and foundations were established in the period between 1991 and 1993. Also, the increase of number of these organizations was low er because the regulations o f its registration were more restrictive. At present only those organizations w hich are registered guarantee providing services of high quality.
Fig. 3. Number of non-profit organizations, which were set up in Poland in years 1973-1997. Source: The basic statistics concerning activities of Non G overnm ental Organizations in Poland. KLON/JAWOR, Warszawa 1998 (in internet: w ww.klon.org.pl)
In 1999 in Poland there w ere 46,640 private n on-profit organizations officially registered (Inform ation from : KRUPGN-REG ON. Wroclaw WUS,
2000). T he main types of these were: associations, social organizations and foundations. The number of each type were as follows:
associations 33,556, social organizations 7,623, foundations 5,461.
The highest number of non-profit organizations (N G O ’s) were established in the M azow ieckie and Śląskie voivodships (see fig. 4).
Fig. 4. Associations and social organizations in Poland in 1999 by voivodship.
Source: On the base of statistic system KRUPGN-REGON. Prepared by A. Zemska. Wrocław WUS. Wroclaw 2000.
In the M azowieckie voivodship in 1999 there were 5,301 associations and social organizations, (15,3% o f all these organizations in Poland) and 2,120 foundations (43,2% of all foundations in Poland). T he reason for the high activity o f citizens in this region is that the capital o f Poland (Warsaw) is located there. Figure 4 shows also that the second region with the largest number o f non-profit organizations is the Śląskie voivodship. It is a highly industrialized region in Poland. T he smallest number o f N G O ’s are in the
Lubuskie, Świętokrzyskie and O polskie voivodships. L ubuskie, Świętokrzyskie are rurally dom inant regions but O polskie is mixed - rural/industrial. This data shows that the social activity o f Polish citizens in creating N G O s is diverse and depends on the level of industrial, economic and social development of a region.
The fields of declared activity are covered in Table 1.
Table 1
T he fields o f activities o f private non-profit organizations in Poland in 1997 (%)
A ctiv ity S h a re in %
Education 4 2
Health 3 4
Social services, ch arity 33
Fam ily, children 2 4
A rt and culture 19 Regional d e v elo p m en t 15 Sports 15 Ecology (E n v iro n m en t) 13 H um an rights 11 Science 8 H obby 7 M ass m edia 6
Source: C entre o f Information for T h e Basic Statistics C oncerning Activities of Non Governmental Organizations. “Gazeta W yborcza” 4-5 September 1999 p. 24
O rganizations were able to declare activity in m ore than one field. It is possible to jo in for example health and social services or education and family, sports and so on. It is easy to find out that the main fields o f their activity are: education, health, social services and charity.
In P oland, the local and governm ental budgets play a small role in the support o f these organizations. So they collect money fro m citizens of Poland and try to sell services. The m ain sources of support for th ese organizations are: m em bership fees, individual donations and business d onations (see fig. 5).
O t h e r D e p o s i t s in b a n k s B u s i n e s s activity Co l l e c t i o n s M c m b c r s h i p fees P a y m e n t fo r ser vic es I n d i v i d u a l d o n a t i o n s B u s i n e s s gi vi ng I n t e r n a t i o n a l grants S p o n s o r s h i p R e g i o n a l g o v e r n m e n t L o c a l bu d g e t G o v e r n m e n t a l b u d g e t ■ ■ Foundations I- 'I All organizations 69 23 62 4 7 59 4 4
20
40
60
80
Fig. 5. T he sources of support non-profit organizations in 1998 (in %)
Source: The basic statistics concerning activities of N on-Governmental Organizations in Poland. KLON/JAWOR, Warszawa 1998 (Internet: www.klon.org.pl)
T he organizations use paid staff too (see fig. 6). So 40% of them declare that volunteers work for these organizations “from tim e to tim e”; 24% often; 15% alw ays; and 24% never. B ut the tradition for charity in Polish society is the chance to increase charity and voluntarism in this country.
Fig. 6. V olunteers in non-profit organizations in Poland in 1997
Source: T he basic statistics concerning activities of Non-Governm ental Organizations in Poland. KLON/JAW OR, Warszawa 1998 (Internet: www.klon.org.Dl)
1- cu ltu re
2 - help for abroad 3 - health care 4 - social a sso ciatio n s
5 - e d u c a tio n 6 - ch arity 7 - te rm in a lly ill
c h ild re n c a re
Fig. 7. Preferences of supporting private non-profit organizations in 1996.
Source: B. Iwankiewicz-Rak: M arketing o f Non Profit O rganizations. How to Adopt in Poland. AE, W roclaw 1997 p. 156
At present, people in P oland declare support private non-profit organizations whose activities are concerning in: c a rin g for terminally ill children, charity and education (fig.7).
3. STRENGTHS AND WEAKNESSES OF NON-PROFIT ORGANIZATIONS IN POLAND
In the system of transform ation in Poland there ap peared both opportunities and threats in the developm ent non-profit organizations of social service subjects (see Table 2).
Table 2
Threats, opportunities, strengths and weakness in the activities o f private non-profit organizations during the period of system transform ation in Poland
P riv a te / n o n -p ro fit P riv a te / n o n -p ro fit Strengths 1. H ighly q u a lifie d em p lo y e es 2. Social c o n tro l o v e r the o rg anization’s a c tiv itie s
3. Social a c c e p ta n c e for the organization’s o b je c tiv e s
4. Effective m a n a g e m e n t o f the funds gained from sp o n so rs.
5. High q u ality o f s e rv ic e s and their individualised c h a ra c te r
6. E m p lo y ees’ e n g a g e m e n t in the fulfilm ent o f th e o rg a n iz a tio n ’s objectives and a c c o m p lis h m e n t o f its
Opportunities
1. High respect fo r s o c ia l services in the system o f c o n su m p tio n
2. Increased d e m a n d for social services
3. New re g u la tio n s concerning business activ ities
4. High prices o f p riv a te services
5. U nfavourable o p in io n o f public institutions’ p e rfo rm a n c e .
6. Privatization o f e c o n o m y 7. G row ing e n tre p re n e u rsh ip in society
8. Expansion o f the so c ia l sector in the developed c o u n trie s
9. Tendency fo r g lo b a liz a tio n o f public services
10. Rich tra d itio n fo r charity in Polish society.
11 .Support and a id from local governm ents________________________
W e a k n e s s e s
1. D ual fo rm o f m anagem ent (social and p ro fe s sio n a l)
2. W eak fin a n c ia l condition 3. In s u ffic ie n tly developed m ethods o f g a th e rin g fu n d s.
4. F u n c tio n in g dedicated to the financial su p p o rt o f public in stitu tio n s
5. E x istin g s id e by side w ith public in stitu tio n s
6. L ack o f fin a n c ia l independence and p e rm a n e n t s o u rc es o f donations
1. L a c k o f co m p reh en siv e and c o n siste n t leg al regulations g o v e rn in g p riv a te non-profit o rg a n iz a tio n s.
2. Im p o v e rish m e n t o f society 3. L ittle in te re s t o n the p an o f society in s u p p o rtin g o r w o rking for non profit o rg a n iz a tio n s
4. In stan ces o f u n eth ical activities o f n o n -p ro fit o rg a n iz a tio n s
5. L ack o f re g u la tio n s that would e n co u rag e c h a r ity o r sponsoring. 6. C o m p e titio n b etw een com m ercial and p u b lic in s titu tio n s
Source: A uthor’s own.
Yet analysis of the inform ation presented above show s that the distribution of threats and opportunities may often vary.
The opportunities presented in the table may be regarded as incentives for transform ation in this sector. On the other hand, the indicated threats refer to the changes in the standard o f living in Poland rather than to transformations.
R esearch into the functioning o f social service institutions also enables one to specify their advantages and disadvantages, which becam e apparent during the tim e o f system transformation.
T he strengths and weaknesses o f different public service subjects stem from the social and economic conditions, which account for the sharp contrast in this sector o f services in Poland.
C O N C L U S IO N S
T he transform ation of P oland’s economic system triggered business activity in the sector of social services. Consequently, the institutional structure of these services w as enriched, creating a favourable ground fo r competition among businesses and non-profit organizations. The period o f transition have made the private non-profit organizations develop and increase the third sector of the econom y. So the main factors o f developing organizations o f the third sector of econom y in Poland are:
- dem ocracy and privatization o f economy, - increased demand for social services,
- reduction of the role of public institutions in p roviding public goods, - low quality of service provided by public institutions,
- unfavourable opinion o f public performance, - high prices of private services,
- tradition for charity in P olish society,
- self-finance activities (concentrated on raising funds for business activity).
T hese are the political, econom ic, social and institutional determinants in the developm ent of private non-profit organizations (N G O s) in social services i.e. education, culture and health care. It is very im portant to identify them.
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