Private vs State Nonprofit Organizations

In the property of non-profit organizations there can be any kind of property.
A non-profit organization can own or have in operative administration: buildings, constructions, available housings, equipment, stock, money resources in national and foreign currencies, securities, ground areas, other objects and items of property.
The organizations which property is beneficially owned by the state (the federal property) and its subjects — republics, states, areas, cantons, regions etc. (the property of the subject), pertain to the state non-profit organizations.
The state non-profit organizations can be the state bodies, the largest educational, scientific, medical, cultural, information centres, libraries, museums.

Municipal non-profit organizations include comprehensive schools, kindergartens, outpatient hospitals, departments of social security, etc. The property belonging to cities, towns and rural settlements, as well as municipal formations is called municipal property.
The property considered as municipal property, is fixed to the municipal entities, enterprises and establishments having the right to possess, use and entirely dispose of them.

One of the functions of the state and municipal non-profit organizations is granting in equal quantity of the public goods to each member of a society, possible at present time and without which the further economic and social development of a society is inconvenient.
Thus, the maintenance of certain standards of the public goods' consumption is provided.

The state and municipal non-profit organizations have advantages and lacks.

One of the main advantages is the centralized regulation of manufacture and distribution process with appropriated allocation of necessary resources.
It creates preconditions of equal possibilities in the area of public goods' consumption.

A serious lack is definitely the inevitable limitation of the means allocated by the state for creation of the public goods, and especially in transitive economy, the absence of economic spurs for effective work, bureaucratic style of management, etc.

The organizations based on various forms of non-state (private) property pertain to the non-state nonprofit organizations. In relation to them is often applied the term "private non-profit organizations" or groups.

The basic signs of private non-profit organizations:

• Voluntary formation
• Innovative character of development
• Savings of production costs with high quality of end results of activity
• An effective use of possible profit

Private non-profit groups, being based on a private pattern of ownership, operate for the public benefit, provide access to human values, defend the principles of pluralism and equal possibilities for all members of a society.

In social market economy, the functions which earlier were traditionally carried out by the state are assigned to private non-profit structures. It becomes possible due to special functional purpose of such organizations in the market economy, a specific character of use of their profit.
As a result - such non-profit organizations, being private, satisfy first of all the demands for public goods. They express not only personal, but also interests of a society as a whole. At the same time, as they don't belong to the state, they follow the market laws in a greater measure, than the state organizations.
It is expressed in a prompt response to demand, intention to provide quality products, to save production costs, to conduct active development of new directions of activity and so forth.

The functioning of non-state non-profit organizations is not intended to replace the economic goods created by private business and the state. Their activity, on the contrary, expands the structure of public demands, creates possibilities for additional alternative provision of products and services to consumers.
From this point of view private non-profit organizations assist strengthening of a competition between various sectors of economy, socialization of economy, that positively affects social and economic progress of a society.

A spectacular example - the successful activity of non-profit organizations in the USA. The greatest activity of non-profit organizations in the United States is observed in the field of environment protection, maintenance and support of the homeless people's everyday life, improvement of life conditions in remote areas, medical researches, organization of education thanks to donations in welfare funds, creation and maintenance of religious communities.

A good rule of thumb is that for emerging and developing countries being on the way to the market economy, the functioning of private non-profit groups is even more important (and sometimes crucial), than for industrialized countries of market economy.
It speaks backwardness of market relations, extremely limited state resources, complexity of social and economic questions of a transition period. As a result, in those countries private nonprofit organizations often have to partially meet the challenges and complete the tasks traditionally handled by the state in a market economy.