NON-PROFIT MANAGEMENT CONTEXT: MIDDLE EAST AND NORTHERN AFRICA
April 30, 2018
The Middle East and North Africa (MENA) region continue to experience social and economic challenges related to poverty, illiteracy, and inaccessibility to basic social services. These problems have facilitated the growth of humanitarian efforts spearheaded by the government, private institutions, and individuals to provide aid and other support services to needy populations. The entry of international nonprofit organizations (NPOs) has been facilitated by the need to develop and sustain social capabilities through crafting collaborative efforts to alleviate the socioeconomic problems facing families and individuals in remote and neglected regions.
The development of philanthropic activities in the MENA region is tied to the provision of corporate social responsibility (CSR) activities. The creation of the Global Compact Unit by the United Nations and its subsequent operations in the Middle East lead to the signing of many public and private institutions to participate in the humanitarian and charity work for the community. The transformation from CSR to philanthropy has been facilitated by the increased efforts towards addressing social issues such as disability, food, clothing for the poor, and housing and education the underprivileged in the society. The recent statistics show that NPOs working in the MENA region are focused on the provision of relief food, housing, and clothing to the poor accounting for over 30% of all humanitarian activities in the region. Social services extended to orphans and other unfortunate members of the society represent over 15% with the provision of education and other learning opportunities attributed to over 10% of NPO activities.
The philanthropy and humanitarian activities in the MENA religion are motivated by the religion and a rich culture of generosity. Over 70% of individuals involved in charity and humanitarian activities are motivated by their religion. The concept of “Ummah” referring to the Muslim and Islam community has led to more donations towards charity activities. While the western professionalism has infiltrated the management of the Muslim NPOs, the conventional motivation for their activities is still retained. The philanthropic elements facilitated by the Islam faith include the Zakat, Sadaqah, and Waqf that compel individuals to contribute a certain amount of their wealth towards helping individuals in need. The MENA region receives an annual average of 500 billion US dollars inform of donations from individuals and corporates to advance the philanthropic activities.
The donations are mainly channeled in projects that seek to eradicate poverty, provide education facilities in the less developed areas, offer better health, create an inclusive society through an understanding of individual rights and building an environment for the disadvantaged social groups. The increase in particular social and health problems such as untreatable diseases, poverty, hunger, floods, political oppression, and poor economic levels in the MENA region has led to the growth of NPOs that initiate and implement programs to improve income, health, and education levels. The increase in international nonprofit institutions has also facilitated governments to create avenues for growth of internal and regional relief and humanitarian programs.
Humanitarian organizations in the MENA region rely on contributions from volunteers and donors to meet their objectives. The domestic and foreign NPOs working in the region have collaborated with the governments and religious institutions to tap more resources through regulations that require individuals and companies to contribute a percentage of wealth towards helping the disadvantaged in the society. Countries with stable political administrations and strict religious beliefs report more contributions to the humanitarian activities. In the MENA regions, Africa accounts for the highest number of NPOs with the majority of these institutions focusing on improving education services, alleviating poverty, and reforming the health services.
Historical Development of Nonprofits in the Middle East and Northern Africa
The philanthropy activities in the Arab countries have been facilitated by the persistence of many social and economic problems. Ibrahim and Sherrif explored the extent of these activities in countries in the MENA regions such as Egypt, Lebanon, Jordan, Saudi Arabia, Kuwait, Qatar, UAE, and Palestine. The oil deposits and other resources have created unprecedented wealth in these countries. While the resources have fueled a positive economic growth, the political environment in some of the states has led to increased levels of poverty, unemployment, poor health services, wars, environment pollution among other critical social economic challenges.
Families, individuals, and private companies have amassed wealth from the oil trade thus sought methods to utilize their resources to improve the livelihood of their fellow local citizens as well as the needy societies across the border. The increase in philanthropic activities in the MENA region has been necessitated by the availability of these resources in the hands of the private individuals and institutions and the willingness of such entities to participate in the public welfare. According to Ibrahim and Sherrif, the main humanitarian activities in the region have included voluntary contributions to the various causes and programs initiated to serve the public good. In the contemporary society, the religious frameworks continue to influence the trends in charitable activities with a notable shift towards strategic philanthropy where contributors are concentrating of establishing the cause of social challenges and finding methods to resolve them.
On the other hand, the philanthropic activities in the MENA regions have seen the transformation of many individual contributions into institutional programs. Humanitarian activities provided through institutions are considered more effective and impactful compared to individual efforts. Individuals seeking to leave a legacy have institutionalized their activities to attract more donors and contributors and also reach wider populations. However, the influence of religion in both individual and organizational philanthropy is huge with both Islam and Christian teachings requiring sharing to benefit those in need. The charitable and humanitarian activities in the regions are rooted in these religious traditions, the social solidarity or takaful for Islam and issuing tenth of individual income to the less fortunate for the Christians.
Shaw notes that the increased levels of poverty in marginalized areas and the lack of education, water, and healthcare facilities in such areas, created an imbalance in social and economic development. Therefore, nonprofits that focused initial efforts in Africa sought to fight poverty, illiteracy levels, and provide better healthcare services to the poor and marginalized. Such perennial social, political, and economic challenges have placed the Middle East and North Africa as the leading regions in the world with the highest presence of international nonprofit organizations. MENA region is served by institutions that operate collaboratively due to the similarity of social and economic challenges facing the population.
However, the spread of NPOs in the MENA region depends on the definite needs and objectives of the humanitarian institutions. The America-Mideast Educational and Training Services, Inc. (AMIDEAST) is one of the top NPO in the Middle East that creates and strengthens cordial relations between America and the Middle East & North Africa through educational training and skill exchange programs. Anna Lindh Foundation is another organization that promotes integration, relations, and coexistence between cultures through respectful dialogue and diversity.
The Middle East Youth Initiative offers economic empowerment and inclusion of young people in the region through building partnerships and strategic alliances among policymakers, investors, youth leaders, governments, civil society, academics, and the private sector while the Said Foundation targets the children towards assuring a better future for them by investing in their education, development, and understanding of important cultures. Save the Children offers programs to uplift and sustain better living conditions for children in difficult social and economic conditions. The program has been expanded in North Africa to promote the abilities of parents and guardians in achieving better lives for the children.
Northern Africa is served by similar organizations that have comparable objectives and goals. The Action for Africa is a nonprofit organization that supports productive and healthier young lives through supporting early child development, education especially for girls and orphans who have a higher risk of illnesses, social violence, and neglect. The Fistula Foundation focusses on restoring health for African women suffering from obstetric fistula. The nonprofit organization is a response to the increased number of women who deliver without medical help due to unavailability of facilities or resources.
World Conservation Network (WCN) has programs in Northern Africa that include the identification and preservation of endangered specifies of wild animals and their habitats such as lions, elephants, cheetahs, and rhinos. The NPO promotes coexistence between local population and wildlife through sensitization and awareness programs. The Search for Common Ground (SFCG) is another Northern Africa and Middle East nonprofit organization that seeks to improve women participation in the social, economic, and political processes. The institutions focus on rights of women through inclusive dialogues with leaders in various sectors. Therefore, the historical development of nonprofits in the Middle East and Northern Africa has been facilitated by the recurrent social and economic issues facilitated by poor governance and improper use of available resources.
The operations of global nonprofit organizations have been lauded for excellent management, control, and coordination. Denhardt, Denhard, and Aristiguetaassert that top-performing NPOs across the world are better organized with strict regulations, traditions, and principles that lead to effectiveness in operations and excellence in services. The traditional philanthropic activities in the MENA region have included the works of civil society organizations (CSOs) that respond to societal issues such as famine, floods, refugee crisis, and water shortages. The CSO activities have been more prominent in Palestine due to the lack of a functioning political administration. The organizations have provided basic social services such as food, shelter, education, and sanitation. In other Arab countries with sustainable economic development, the affluence in these societies has stimulated positive contribution from the public towards humanitarian activities.
Ibrahim and Shneif explore the transformations in the Arab world concerning the impact of politics, employment, wealth creation, education, relationships and other social impacts on the advancement of philanthropic activities. The countries have a culture of sharing that is founded on the legacies of families and social institutions. Parents have traditions of guiding their children through values of sharing financial resources and principles to enable improvement of social welfare and economic changes. Therefore, the philanthropic activities in the Middle East and North Africa have been positively impacted by the strong values that are attached to sharing and promoting public welfare.
According to Bonner, Ener, & Singer, the humanitarian activities in the MENA region have focused on the eradication of poverty through the provision of relief to the poor. The rise of Islam and the increase in the number of institutions and individuals involved in philanthropic activities has helped the region to collaborate in the fight against poverty while creating an environment for international charitable organizations. The private and public relief operations in the region are expected to eliminate the profound social and economic problem through sharing of material resources, ideas, and values.
The resemblance of the Middle East and Northern Africa in terms of political frameworks, economic patterns, social environment, and religious systems helps the NPOs to interrelate in the provision of the selected services. The common types of philanthropic and humanitarian traditions that have been used by NPOs operating in the Middle East and Africa include relief principle, improvement tradition, social reform, and response principles. These traditions help in the selection of needy population and regions, setting of targets and objectives, as well as sourcing for finances and other resources.
The collaboration among the humanitarian institutions and the government to improve the quality of healthcare, education, literacy, sanitation, and provision of water resources fits into the objectives and tradition of most NPOs. Empowering the population reduces the overreliance on external help in the future through the creation of a self-sustainable society. Other NPOs recognizes poverty, illiteracy, religious discrimination, and racial differences as the huge challenges facing developing and underdeveloped countries. Establishing accurate and proper social values and rules is significant in the functioning of social, political, and economic systems. The focus of social changes stems from the rapid global transforms that are expected to create a unified society bound by similar social aspects. The nonprofit institutions that propagate the social reform tradition tend to focus on human rights and elimination of discrimination in the society.
Key Features of the Regulatory and Tax
The success of nonprofit organizations is guaranteed by the availability of a friendly and legal regulatory system that enables such organizations to operate and adhere to the internal, national, and international regulations. The function of NPOs has led to the development of specific regulations to guide their activities in the targeted regions. While the Middle East and the Northern Africa regions have received many nonprofit institutions, the increased presence is not facilitated by the laxity of laws, regulations, or the protocols needed to allow and manage the operations of these relief entities.
The regulation of NPOs varies from region to region due to the diversity in political, policy, regulatory, and income laws. The universal goal of the majority of nonprofit organizations has led to the unification of taxation and regulation mechanisms that seek to create a global environment where the organizations can work without excessive control and monitoring. The high number of conflicts between the nonprofits and governments in the Middle East and Africa stem from the differences in regulation and taxation. Some governments have mandated all organizations in their territory to pay and file tax returns to support the government activities.
However, the vital element of these regulatory processes is the exemption from income and other forms of taxes by the government and other entities. The objective of these NPOs has informed the decision by international society to exempt them from levies on their incomes that come from projects, sponsors or donors. While some countries and regions have indirectly dictated the utilization of the funds collected by these organizations, nonprofits select the appropriate projects to invest in economic, social, education, infrastructure, religious, and research settings.
Nevertheless, the exemption from tax system is subject to application by the NPO and subsequent review and approval by the government. In the United States, the Internal Revenue Service (IRS) is responsible for receiving tax exemption application from NPOs then vetting such organizations to determine their operations, sources of revenue, expenditure, and other financial processes before issuing them with tax exemption certificates. The governments have a regulatory role of examining and reviewing the operations of these institutions to ensure that they abide by the mission, objectives, and strategies. There are various cases where business frauds have registered NPOs with a mission of executing illegal business in foreign countries as well as evasion of taxes.
Notably, nonprofit organizations working in the MENA region have faced the same procedures in complying with the regulations and tax systems. In this region, the tax authorities or services work with the NPO organizations to provide exemptions on the payment and filing tax returns. The lifting of tax levies for the international relief organizations in these regions has been attributed to a high number of humanitarian activities in the Middle East and Africa. More institutions are preferring countries that have fewer restrictions on financial control and other regulations that may limit the implementation of social and economic projects.
However, organizations that do not deliver their mandate in uplifting the lives of the population may be forced out of these regions through the imposition of taxes rendering the operation futile. The exemption from taxes is a method by governments to enable the nonprofit organizations to expand their activities in the humanitarian, development, and relief efforts. Additionally, the sources of finances for the institutions have also been considered in exempting them from income levies due to the understanding that majority of donors and volunteers are subjected to normal incomes taxes such as Pay as you Earn or income withholding taxes.
On the other hand, the regulation of nonprofit organizations in Northern Africa and the Middle East is carried out by specific government authorities that oversee the operation of these institutions. The authorities ensure that the NPOs meet their objectives in the charters agreed with the governments. Importantly, the organizations are not allowed to interfere with the national political, social, and economic landscape. The mandate of most NPOs includes providing relief, response to calamities, and supporting social processes such as education and healthcare. The governments have strict rules to bar the organizations from interfering with the major sectors in the politics and economy.
Nonprofit organizations that participate in the political processes such as campaigns and election have often found them deregistered and blocked from operating in these regions. This also applies to such institutions that go beyond the agreed charters and scope of work. The struggles between governments in developing countries and NPOs have resulted from the increased activities by these entities such that the population will view the NPOs as more important in uplifting their lives leading to conflicts and eventual registration of such institutions. Potluka, Spacek, and Schnurbein point out that the position of the nonprofit organizations should be assistive, not major roles in changing the population perception or impact the direction of development policies and strategies.
The institutions must understand and adhere to such policies to avoid creating tensions between countries. For instance, the civil wars prevalent in the Middle East determine which countries the NPOs should engage in seeking financial or material support. The self-regulation among these organizations is also recommended by experts and analysts due to the closed nature of their operations. While the governments have laws and rules that guide the operations of NPOs, such regulations only apply to general processes with control and management of internal activities left to the organizations to manage. The NPOs operating in the Middle East and Nothern Africa have shown high self-regulation levels leading to their success in meeting their goals and objectives.
The NPOs in the MENA regions fit in the third sector in a typical economy which includes institutions providing support in social, health medical, human rights, sports, and other activities. The self-governing nature of these institutions continues to raise regulation and administration debates. The separation of the NPOs from the government laws and regulations has created conflicts with some countries in the Middle East such as Saudi Arabia banning most of the internal and global private organizations. The western countries have viewed the countries in the MENA regions to have unstable political administration system thus unable to successfully regulate the works of NPOs in the regions.
However, the recent political and governance reforms in these countries have created an environment where philanthropic activities can thrive through extensive laws and regulations that guide the registration and implementation of relief activities. However, the execution of these laws, practices, and regulations differ among countries. For instance, Egypt has over 20,000 registered NPOs working on various social projects while UAE and Saudi Arabia have relatively few organizations due to the political administration and the economic stability.
Core Policy Postures
The social, economic, and political environments in the Middle East and Northern Africa have influenced the management and structuring of the nonprofit institutions that have a presence in the region. The strong religious backgrounds in some countries in MENA region such as Lebanon, Egypt, and Iraq have adversely affected the works and management of humanitarian organizations in the regions. Gulf Cooperation Council (GCC) countries have extensive oil resources that have led to an increase in donations through the responsible government ministries and religious institutions.
The economic and political policies have adversely affected the philanthropic activities in the MENA region. The existing economic strategies have been blamed for the widening gap between the rich and the poor in most countries in the region. The political administration policies that have limited foreign relations has also affected the entry of international NPOs. The involvement of humanitarian organizations in the GCC countries has been dictated by the political, social, and economic ties between the two countries. Northern African countries such as Egypt, Libya, Algeria, Tunisia, Sudan, and Morocco use the economic, political and social to register or deregister charitable institutions.
The regulation policy frameworks have increased micromanagement of many nonprofit organizations and NGOs in the MENA region. Countries with unstable political systems have influenced the operations of these institutions through direct interference with their strategies and operations. Fundraising policies relating to the procedures and rules on raising resources for the various humanitarian projects have also impacted the capabilities of the NPOs. Most organizations are used to an environment where they solicit funds from various sources such as religious institutions, communities, and schools without dictation from the governments. The NPOs consider the restriction on collection of funds as the major challenge facing their operations in the Middle East and North African countries. The poor relationships among countries in these regions also reduce the number of donor and volunteers.
On the other hand, fiscal policies in any country also impact the operations of nonprofit organizations because the revenues collected and expended by such institutions is not considered in annual government collection and expenditure. The regulation by many governments in the Middle East and African countries determine the cumulative revenues and expenses for the country, therefore, requiring the NPOs to provide their financial statements and reports which may pose adverse effects to their future capabilities.
Comparison with Standard Western Nonprofit Management Model
According to Irwin, the standard Western nonprofit management model includes a board that is charged with the strategic running of the institution in the various regions selected as candidates for the humanitarian aid. The boards are usually composed of founders and major financiers. The structure of the board determines the success of the operations through the development of various committees that are charged with separate responsibilities that develop the mission, vision, and core values of the NPO. The effectiveness of this management model is founded on the composition of the critical committees that handle finance, program, planning, fundraising, and personnel activities. The implementation of this standard management model in the MENA region is affected by the local regulations and rules that govern both home-based and foreign NPOs.
While the NPOs are not business entities, their management and operations should meet the requirements of profit organizations because they work with finances, personnel, infrastructure and other resources thus required to be responsible in terms of professionalism and financial control. The personnel and other human resources should include experts in employee relations, project management, accounting, management, coordination, risk management, and auditing to ensure that the operations of the institutions meet the required standards and can be comparable to business entities.
The administration of the NPOs in the MENA region is different from the standard western nonprofit management model. While the charity organizations in the western countries are largely institutionalized, the NPOs in the Middle East and North Africa are guided by the altruistic principles. The other difference between the Western and MENA nonprofit management model is the perception of CSR activities. Nonprofit organizations in the western nations view corporate social responsibility as a strategy to reinforce core social and economic issues such as environment, health, and education while the organizations in MENA consider CSR as a channel to provide support to charity towards managing social problems. However, the institutionalization of philanthropy is a new but acceptable concept in MENA humanitarian activities. The countries with expanded wealth through oil and other resources have allied with NPOs to help them provide contributions and monitor their utilization.
The management of nonprofit organizations in Northern Africa and the Middle East has been subject to various internal and external issues that have impacted the execution of various projects and programs. The nature of the political environment, religious systems, and the cultural background has affected the entry and presence of these NPOs. The political unrests in some countries in the Middle East and some parts of North Africa have also resulted in limited relief and humanitarian programs implemented in these regions. However, the study has identified the key philanthropic aspects that have guided the success in improving the people lives and guarantying their human rights.
Relief, improvement, social reform, and response principles are some of the humanitarian features that are considered in management and operations of the nonprofit organizations in the selected regions. Importantly, the regulatory framework by the home and host governments has also affected the organization and management of nonprofit institutions operating in North Africa and Middle East regions. These countries have facilitated a cordial environment for the institutions through a framework of policies and regulations that prevent maltreatment while affording them access to the government infrastructure and resources required in reaching most remote areas.
The exemption from any form of taxes and levies both at the institutional and employee level encourages initiation of more programs that result in economic and social benefits for the host population. The paper has also highlighted how the various economic and political policies impact the management and functioning of the NPOs. The financial, regulation, economic, and fundraising procedures determine the levels of investment. Governments that are extremely strict on the work of external stakeholders create challenges for these institutions to achieve their goals.
The diversity of policies in the Northern Africa and parts of Middle East regions are considered the major influencer of humanitarian and relief organizations. The level of poverty that does not correspond to the value of available resources is used to shield more NPOs from accessing such countries. The mismanagement and misappropriation of natural resources due to poor political administration and instability create an economy with few wealthy individuals and many middle and low-income earners. The analysis of the standard Western nonprofit management model compared the changes that the NPOs have made to ensure full assimilation in the targeted regions through understanding the local political, social, and economic systems.
However, the relevance of the board as the steering organization of all operations for nonprofit organizations is still critical to guide proper selection, financing and implementation of valuable and needed programs. Therefore, the success of managing nonprofit organizations in the Northern Africa and the Middle East region is pegged on the relation that the entities create with the governments as well as the adherence to the conventional management models and regulation that have helped the institutions succeed in other regions.
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 Budrys, Grace. How Nonprofits Work: Case Studies in Nonprofit Organizations. (Lanham: Rowman & Littlefield, 2013), 18.
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 Wolf, Thomas. Managing a Nonprofit Organization: Updated Twenty-First-Century Edition. (New York: Simon and Schuster, 2012), 57.
 Weikart, Lynne and Chen, Greg. Budgeting and Financial Management for Nonprofit Organizations. (Thousand Oaks: SAGE, 2012), 84.
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 Halpem, Mafred. Politics of Social Change: In the Middle East and North Africa. (New Jersey: Princeton University Press, 2015), 46.
 Svara, James. The Ethics Primer for Public Administrators in Government and Nonprofit Organizations. (Burlington: Jones & Bartlett Publishers, 2014), 37.
 Anheier, Helmut. Nonprofit Organizations: Theory, Management, Policy.(New York: Routledge, 2014), 132.
 Osula, Bwamwell, Ng, Eddie. “Toward a Collaborative, Transformative Model of Non-Profit Leadership: Some Conceptual Building Blocks.” Leadership in Non-Profit Organizations, 4, no. 2 (2014): 91
 Singh, Ardhendu. “Conducting Case Study Research in Non-Profit Organizations”, Qualitative Market Research: An International Journal, 17 no. 1, (2014): 79
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