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Organizations: The Third Sector, Fourth World and Fifth Discipline
Tenzing LG Chadotsang and Philip C Marshall
Migyul Magazine, Issue 3, Fall 2004

Introduction

This article places in context the importance of nonprofit organizations to our Himalayan community — in greater New York and abroad.

The last three decades has witnessed a dramatic increase in the number, composition, and role of organizations to the extent that they serve the immediate interests of second and third-generation Himalayan immigrants in exile. A wide variety of organizations play vital, engaging and pervasive roles, affecting multiple facets of our lives.

Organizations help us strengthen our community — internally through capacity-building, cultural preservation and social activities and externally through organized engagement with the world. Organizations help us further collective goals congruent with our personal and community beliefs, while matching our needs and aspirations with resources and services. At times organizations sustain, at other times they substitute for, family and community traditions.

The three parts of this article describe: (1) ways that nonprofit (here, Third Sector) organizations help the Himalayan community, (2) parts of which do not have formal international recognition (hence, Fourth-World peoples); (3) realize our needs and potential in a global city (greater New York) and international arena — with an emphasis on taking a systems approach (here, the Fifth Discipline).

Organizations range from volunteer-run grassroots, neighborhood and community networks, to large charities with hundreds of paid staff, from single-issue campaign groups, to social, financial and health service providers, from community development corporations to watchdog groups; and from museums to exile and diaspora organizations.

Third Sector

Forms

In this article, the term “organizations” refers to charitable nonprofit or non-profit (at times: NPO), non-governmental (NGO) and international non-governmental (INGO) corporations. These negative terms are self-limiting and inadequate as they refer to what organizations are not rather than what they are. So alternate terms, which have recently been introduced, are gaining currency. These include Private Voluntary Organizations (PVOs) and (global) Civil Society Organizations (CSOs). While each term (Alvarado 1998, UN DPI 2004, US AID 2004; ) has different economic, legal, purpose-driven, and operational (Salamon et al 2003:6-9; Salamon et al 1999) meanings, here they are all referred to as " nonprofit organizations" or simply "nonprofits" — an American phrase.

Collectively these organizations are part of the Third Sector— with government and for-profit business being the other two sectors. CDATS (2004) notes, "The 'third sector' encompasses those parts of civil society that are neither government nor business, including associations, non-governmental organizations, non-profit organizations, advocacy groups, citizen groups, social movements, as well as the cultures, norms, and social values that enable these social phenomena."

The difference between for-profit and nonprofit organizations is that for-profits distribute profits to stockholders while nonprofits use surplus (profits) to advance their mission. Business, which focuses on the bottom line and economic value of its stock, is beholden to shareholders. Nonprofits, which raise their sights above financial gain, are in partnership with community stakeholders who seek to preserve the value of social and cultural capital and foster economic growth.

In the international arena, Anheier, et al (2001:17) define global civil society as "the sphere of ideas, values, institutions, organizations, networks and individuals located between the family, the state and the market, and operating beyond the confines of national societies, politics, and economics." In this sphere, nonprofits play a major role acting as both vehicle and binder for this (at times) amorphous assemblage.

Ikenberry (2003) in reviewing Keane's Global Civil Society (2003) notes, "'Global civil society' refers to the vast assemblage of groups operating across borders and beyond the reach of governments. Whether such organizations constitute a new, increasingly autonomous realm or are merely artifacts of Western liberal society is widely debated."

Chinnock and Salamon (2002) identified five widely-cited roles that nonprofits are expected to fulfill:

1. Service. The public or collective character of nonprofits predisposes them to providing health services, education, personal social services, and cultural services.

2. Innovation. Nonprofits are not tethered to the bottom line, shareholder expectations or exposure of corporate wealth. They are able to be more flexible, take greater risks, and foster innovation in solving societal issues.

3. Advocacy. As a "third party" to government and business, nonprofits can address their policy and societal conditions while serving as a spokesperson articulating the concerns and cause of community constituents.

4. Expressive and Leadership Development. Beyond advocacy, nonprofits can serves as vehicles for individual and group expression and leadership in heritage, arts and culture, occupations, and much more — in the context of pluralism and diversity.

5. Community Building. In a greater sense, nonprofits play a unifying role embodied in the concept of "social capital" through creation of habits of trust, reciprocity, social obligation, and belonging — in their own community and with others. These, in turn, foster economic growth and democratization.

The Asia Pacific Philanthropy Consortium identifies the following 12 discrete fields (and 27 sub-fields) of activity as organized by the Comparative Nonprofit Sector Project, (based on classification of the International Classification of Non-profit Organization):

1. Culture and recreation
2. Education and research
3. Health
4. Social services
5. Environment
6. Development and housing
7. Law, advocacy and politics
8. Philanthropic intermediaries and voluntarism promotion
9. International
10. Religion
11. Business and professional associations, unions
12. Mutual finance associations and trading cooperatives

In the United States, the IRS Internal Revenue Code (IRC) lists more than two dozen types (by specific IRS code) of recognized nonprofit corporations. The Society For Nonprofit Organizations describes five categories of nonprofits, with the last type (charitable organizations) being addressed in greater detail, below, as these are the focus of our attention):

1. Trade associations, including chambers of commerce and unions.
2. Social clubs, such as country clubs and fraternal organizations.
3. Governmental groups, including city, county, state, and federal agencies.
4. Political groups, generally organized to promote certain policies, issues, or candidates for political office.
5. Charitable organizations (also known as charitable trusts or charitable foundations), which must generally demonstrate a benevolent component. These charities are also called "501(c)(3)'s" that signifies the IRC number under which they are described in the United States.

Charities — §501(c)(3)s

Only charities offer the benefit of routine tax-deductions for donors (in addition to exemption from corporate income tax based on their own operations). Charities are divided between "public charities" and "private foundations". Public charities must meet a "public support test" — they receive revenue from a wide variety of sources. Private foundations usually receive support in the form of an endowment or series of large gifts from a small group (often a family).

The Internal Revenue Service includes details of exemption requirements for charities.Deja (2004) summarizes several privileges and responsibilities of nonprofit organizations in the United States.

Privileges

  • Exemption from Federal Income Tax (pays income tax only on net profit from unrelated activities),
  • Exemption from FUTA (federal unemployment tax — Form 940),
  • Exemption from property tax,
  • Grantors and contributors are permitted to take a tax deduction for cash or goods donated,
  • Eligible for government and foundation grants, which are only awarded to charities.

Responsibilities

  • Keep adequate records (financial and administrative),
  • File required returns to the Internal Revenue Service,
  • Provide donor substantiation: acknowledge payment and value of contribution (IRS 2004),
  • Obey disclosure laws (IRS 2004) — operate transparently; make records available,
  • Generate public support,
  • Avoid "excess benefits" for insiders: do not distribute profits and other private benefits to directors, officers and staff members (IRS 2004),
  • Shun political activity (The Internet Nonprofit Center): absolutely refrain from participating in the political campaigns.
  • Restrict lobbying activities to an insubstantial part of total activities (IRS 2004; IRS 2004),
  • Limit legislative activity,
  • Limit unrelated business activity (IRS 2004).

While 501(c)(3) charities are the most popular form of nonprofits, it is important to consider Hall (2004) who notes, “ … as scholars studying 'civil society,'… Why do we limit our attention to 501(c)3 and 4 [advocacy] organizations in the broad range of nonprofits?… It seems to me that this limitations of view are not only artificial but intellectually indefensible.”

With warranted future study, it will become clear that other nonprofit types — nonprofit/for-profit hybrids, nonprofit/government partnerships, and state-promoted, tripartite relationships with the nonprofit and corporate sectors (Brock 2002), are increasingly important, too.

Context

Over 150 years ago, there were few social organizations as we know them today — simply due to the lack of requisite transportation and communication (Drucker 1998). A steady growth began after 1900 with most organizations originally modeled after the top-down hierarchy of modern (business) bureaucracies. By 1950, many commercial and noncommercial (nonprofit) organizations had changed to a more decentralized, multi-divisional form. In the corporate word, this was the foundation for today's multinational companies. In the nonprofit arena, this created the decentralized, global organization.

The last twenty years has seen the development of global nonprofits (and for-profit corporations, too) that are non-hierarchical, relational — or network — organizations. As concluded by Anheier and Themudo (2002:200-201), "In this context, a key driver of the network form was its emphasis on equality and individual autonomy in relations." Here, the organizational form of (increasingly many) nonprofits has developed a congruity with the values of its stewards and greater community they serve.

Today, our community and its members interface daily with organizations. When in need, we seek health care, social and legal services or referrals; we access individual scholarships or grants for education; we enjoy cultural events, museums, libraries; we provide community service (volunteer) work for altruistic reasons and idealism (The Stewardship Project), to develop skills, to make professional contacts and to build up our resumes; we find co-op placement, internships, employment or professional career development; we obtain housing, financing, and technical assistance, and so much more.

Fourth World

The Nation-State

The "modern" era in the West, starting in the 17th century, was signaled by several intertwined events including development of the nation-state, attendant colonialism, printing and literacy, industrialization, and the so-called European "Enlightenment," with its subjective, Cartesian world.

In the 1950s, Himalayan peoples who had never integrated modernism (and its attendant nation-state ideology) into their world view or cultural structure were catapulted from a premodern world into an emerging postmodern world — missing modernism altogether. All this, just as Tibetans lost their country to China's invasion. Lacking the preconceptions of a modernist nation-state and then denied sovereignty, Tibetans (and other Himalayans) have sought alternate formal, structured means to sustain their cultures in the international, global arena. Tibetans, for one, have learned much about organizations since the first steps were taken when His Holiness the Dalai Lama appealed to the United Nations in 1950 (TJC).

As observed by Ryser, "The prevailing opinion of leaders in the realm of international affairs is that the State system provides the only framework within which international custom and law can be formalized...[but]...there is growing evidence that weaknesses in the state system have opened new channels for other political interests to become active participants in international rule-making: Multi-national corporations and indigenous nations." This is the arena for Fourth World participants.

In coining the term, "Manuel (1974) thought of the Fourth World as the "indigenous peoples descended from a country's aboriginal population and who today are completely or partly deprived of the right to their own territories and its riches." This is a valid definition. However, prejudices and misconceptions regarding the terms "aboriginal" and "indigenous" abound including an exclusive association with New World "Indians." In this manner, many indigenous nations in Europe, the Soviet Union,...Tibet, and hundreds more are forgotten or discarded." (Griggs 1992)

To clarify the term, Griggs defined the Fourth World as, "Nations forcefully incorporated into states which maintain a distinct political culture but are internationally unrecognized," concludes that, "...the definition of 'internationally unrecognized nations' is precise, concise and less geographically limiting than the terms 'aboriginal' and 'indigenous,'" which are fraught with restrictive prejudices and misconceptions.

The Fourth World is not just populated by disenfranchised nations but by individuals and groups. Sassen (2002: 217) observes, "...these non-state actors can gain visibility in the international fora as individuals and as collectives, emerging from the invisibility of aggregate membership in a nation-state exclusively represented by the sovereign."

Through organizations, individuals, groups, tribes and cultures have been slowly emancipated from the ideological and geopolitical confines of the modernist nation-state as their sole representative.

Unlike modernism, this postmodern environment is closer to what Norbu (1998:10) describes (with reference to gompas) as a premodern transcultural ideocracy having no fixed boundaries but porous frontiers being both trans-Himalayan and cis-Himalayan.

Today, Himalayans are involved globally in many organizations — to sustain culture, advocate for human and political rights, foster cross-cultural relationships, and much more. As detailed below, organizations also play a vital role in our new (York) home-away-from-home.

Urban [Khampa] Cowboy

Drucker (1994) notes, "The old communities — family, village, parish, and so on — have all but disappeared in the knowledge society. Their place has largely been taken by the new unit of social integration, the organization. Where community was fate, organization is voluntary membership. Where community claimed the entire person, organization is a means to a person's ends, a tool.…”

While organizations have entered traditional societies in situ — in our homeland villages — they play an even greater role in our adopted global cities, New York included, and in our "global village" (McLuhan 1962), which refers to our electronic world. This intersection of city streets and the World Wide Web has reshaped our landscape. Our gotham grid defines crossroads where East meets West to span the North-South Divide.

The transnational space of global cities provides enabling environments through, as Sassen (2002:217) describes, "an incipient unbundling of the exclusive authority over territory and people that we have long associated with the national state." Further, Sassen (2004:1-2) observes, "The growing intensity of transactions among major cities is creating a strategic cross-border geography that partially bypasses national states. The new network technologies further strengthen these transactions, whether they are electronic transfers of specialised services among firms or Internet-based communications among the members of globally dispersed diasporas and civil society organizations.... Of particular interest is the possibility that local, often resource-poor organizations and individuals can become part of global networks."

Sassen (2004:6) continues, "Immigration is one major process through which a new transnational political economy is being constituted, one that is largely embedded in major cities in so far as most immigrants are concentrated in major cities. It is, in my reading, one of the constitutive processes of globalisation today, even though not recognised or represented as such in mainstream accounts of the global economy."

For the Himalayan community, membership involvement in a nonprofit may be more advantageous for a community than citizenship for its members. Our under-represented urban community may have little chance of working in the political arena of a nation. Yet through understanding organizations, accessing resources, and involvement we can operate in the global, urban arena to preserve our community traditions while enriching our personal goals.

Fifth Discipline

Drucker (2004) observes, "The 21st century will be the century of the social sector organization.The more economy, money, and information become global, the more community will matter. And only the social sector nonprofit organization performs in the community, exploits its opportunities, mobilizes its local resources, solves its problems. The leadership, competence, and management of the social sector nonprofit organization will thus largely determine the values, the vision, the cohesion, and the performance of the 21st century society."

The question remains: how can our Himalayan community best understand, harness and contribute to organizational resources and services — both in New York and globally. Understanding and working with organizations can be helped when we consider their dynamic complexity (Senge 1990:71) as part of an organic system — much as we are.

But, "Our normal way of thinking cheats us. It leads us to think of wholes as made up of many parts.... This is a very logical way of thinking about machines. But living systems are different." Senge, et al (2004: 4). Western civilization and its adherence to an object-oriented view obscures a process- and systems-oriented approach. Consequently, organizations are considered as a noun rather than a verb, as a discrete object rather than relational process; as an individual entity rather than part of an interdependent dynamic system.

As such organizations “... are not cooperating as they should, are missing opportunities, sacrificing effectiveness, duplicating efforts, and even working at cross purposes.” (The Stewardship Project 2004)

Senge identifies systems thinking as the "Fifth Discipline" in his book of this title as it is the conceptual cornerstone that provides a foundation for other disciplines practiced by learning organizations. Senge (1990:69) suggests, "Systems thinking is the antidote to this sense of helplessness that many feel as we enter the 'age of interdependence,'" Anheier and Themudo (2002:192) ”...use the term 'organizational form' in a broader sense as 'organized and structured action' rather than applying it to formal, singular organizations only.” Senge recognizes a limitation of the Western-based concept of action, which is typically linear. Instead, he suggests envisioning reality as circles of causality.

This view should seem familiar to Himalayan readers, as these thinkers are referring to eastern principles inherent in Buddhist psychology: interdependence, causality, presencing ( Senge et al 2004), and much more.

Armed with the insight, knowledge and compassionate motivation of Chenrezig, we can better understand the dynamic complexity, motivation, and actions of interdependent organizations in our lives. This will serve to strengthen Senge's fifth discipline and our sixth sense as we further identify organizations, understand the way they will help us collectively and individually, develop lateral relations with other sectors and communities.

References

Alvarado, Elliott I. (1998) Is there a difference between 'nonprofit' and 'not-for-profit'?, The Internet Nonprofit Center, The Evergreen State Society. Retrieved August 19, 2004.

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Comparative Nonprofit Sector Project, Center for Civil Society Studies, Institute for Policy Studies, Johns Hopkins University. The Johns Hopkins Comparative Nonprofit Sector Project is a systematic effort to analyze the scope, structure, financing, and role of the private nonprofit sector in a cross-section of countries around the world in order to improve our knowledge and enrich our theoretical understanding of this sector, and to provide a sounder basis for both public and private action towards it.

Curry, Michael R. (2002) Discursive Displacement and the Seminal Ambiguity of Space and Place, in The Handbook of New Media, Leah Lievrouw and Sonia Livingstone, eds. London: Sage Publications.

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Drucker, Peter 1998 Drucker Foundation News, August 1998 volume 6 issue 1, Peter Drucker Shares Insights on Organizations of the Future, Leader to Leader Institute (formerly the Drucker Foundation). Retrieved August 20, 2004.

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Hall, Peter Dobkin. Approaches to the History of Nonprofits. The Internet Nonprofit Center. Here, "Hall observed the many difficulties created by failures of intercultural communication. Hall began to believe that basic differences in the the way that members of different cultures perceived reality were responsible for miscommunications of the most fundamental kind." Retrieved August 16, 2004.

Brown, Nina. (2004) Edward T. Hall: Proxemic Theory, 1966. University of California, Santa Barbara. Retrieved August 20, 2004.

Hasan, Samiul (2001) A Review: Second ISTR Asia and Pacific Regional Conference 2001, International Society for Third Sector Research, Johns Hopkins University. Download as PDF file. Qiusha Ma paper entitled Governance of Chinese NGOs: Patterns and Practice: abstract (Download as PDF file) available at Second ISTR Asia and Pacific Regional Conference listed on the Asia Pacific Philanthropy Information Network.

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Internal Revenue Service

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Inurement/Private Benefit - Charitable Organizations. Retrieved August 23, 2004.

Political and Lobbying Activities adapted from IRS Publication 1828, Tax Guide for Churches and Religious Organizations - February 2004. Retrieved August 21, 2004.

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Norbu observes, "Gompa is a typical institution of the pre-modern transcultural ideocracy or civilization realm that knew, until recently, no fixed boundaries but only porous frontiers that facilitated religious diffusion and cultural contacts....In the absence of centralized bureaucratic systems or the political and economic institutions of a nation-state, the institution of a gompa was the Sangha's creative response to the relative absences of a welfare state in the difficult Himalayan terrain, which still continues to pose problems.... Under such circumstances, the gompa, created by the Sangha, emerged vigorously to satsify the manifold human needs of its lay communities as well as to expand its spheres of influence and income." (1998:10)

National Congress for Community Economic Development (NCCED) (NCCED) is the trade association and advocate for the community-based development industry. Founded in 1970, NCCED represents over 3,600 community development corporations (CDCs) across America. CDCs produce affordable housing and create jobs through business and commercial development activities. Retrieved August 20, 2004

The term CDC refers to a type of non-profit entity known as a "community development corporation". Although there is no established legal definition for CDCs, they are characterized by their community based leadership and their work primarily in housing production and/or job creation. This is what differentiates them from other types of non-profit groups.

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McLuhan, Marshall (1962) The Gutenberg Galaxy: The Making of Typographic Man. Toronto: University of Toronto Press.

In this book, McLuhan writes about the changes made by printing (and literacy) to the emerging European nations and societies. But this is a prelude to his analysis of our "global village" made possible through development of electronic media: television, radio, video, and computer. However, McLuhan's global village never knew of the Internet. His communications media (particularly radio and television) are passive, while the Internet allows and encourages active (albeit visual and symbolic, not tactile) engagement by organizations and individuals in a global arena.

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"The growing intensity of transactions among major cities is creating a strategic cross-border geography that partially bypasses national states. The new network technologies further strengthen these transactions, whether they are electronic transfers of specialised services among firms or Internet-based communications among the members of globally dispersed diasporas and civil society organizations. These new technologies, especially the public access Internet, have actually strengthened this politics of places, and have expanded the geography for civil society actors beyond the strategic networks of global cities, to include peripheralized localities. This has enabled a politics of places on global networks." (2004: 1-2)

Sassen, Saskia. "Global Cities and Diasporic Networks: Microsites in Global Civil Society", Chapter 9, Global Civil Society 2002, The Centre for the Study of Global Governance, edited by M. Glasius, M. Kaldor, and H. Anheier. Oxford: Oxford University Press, 2002. Download as PDF file.

Sectors.

Here, the first and second sectors are government (public) and corporate business (private). Organizations (in this article) are known as the nonprofit, third, or independent sector. While independent (hence, private in character), they serve a public, or community purpose.

"Sector" is used in another way when referring to the two sectors, public and private, defined below:

The public sector is any part of a country's economy which is controlled or operated, by the state or local government. Public sector.

The private sector of a nation's economy consists of those entities which are not controlled by the state apparatus, i.e., any voluntary entities such as associations, non-governmental organizations, sports clubs, families, companies and churches. Private sector.

Senge, Peter C., Otto Scharmer, Joseph Jaworski, and Betty Sue Flowers (2004) Presence: Human Purpose and the Field of the Future. The Society for Organizational Learning.

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The Stewardship Project. Elements of the Stewardship notes, “The nongovernmental organizations, though lacking the tremendous power of the states, are a much greater source of idealism. This is the primary justification for their existence: to balance the pragmatic effectiveness of the states with a principled dedication to high ideals….. The smaller, more idealistic groups must constantly encourage the broader, more conservative elements of society towards the higher ground. And they must take up the tasks which the pragmatic states cannot or will not bother with.” Retrieved August 19, 2004.

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What is an NGO?
A non-governmental organization (NGO) is any non-profit, voluntary citizens' group which is organized on a local, national or international level. Task-oriented and driven by people with a common interest, NGOs perform a variety of services and humanitarian functions, bring citizens' concerns to Governments, monitor policies and encourage political participation at the community level. They provide analysis and expertise, serve as early warning mechanisms and help monitor and implement international agreements. Some are organized around specific issues, such as human rights, the environment or health. Their relationship with offices and agencies of the United Nations System differs depending on their goals, their venue and their mandate.

U.S. Agency for International Development, Office of Private Voluntary Cooperation. Retrieved August 19. 2004.

NGO [non-governmental organizations] : A local, nongovernmental organization based in a developing nation.
PVO [private voluntary organizations]: A U.S.-based, private, voluntary organization engaged in international humanitarian and development assistance.