PEOPLE IN THE NEWS -adapted from American Red Cross News online

Katrina Volunteer Vacation

Last semester, they studied textbook disasters. Over their winter break, they helped feed and comfort Hurricane Katrina victims.

Each day, Nellie Afshar, Jemma Binder, Dawn Birk, Zachary Joyce, and graduate student Jessica Walsh from the State University of New York at New Paltz rose before dawn, helped load supplies, spent all day dispensing hot meals in flood-ravaged areas, and then pitched in to clean their vehicles afterward.

Their service fulfilled a field work requirement for a disaster studies practicum, part of SUNY's new disaster studies minor, but the experience was more than that for these students. "You couldn't get me up at 6 a.m. for any other reason," said Joyce, 21. "I wouldn't get up at 6 a.m. to make money. This is the best work I've ever done." ■

Mo ost businesses use scarce resources to produce goods and services in hopes of earning a profit for their owners. Other organizations operate on a "not-for-profit" basis. A nonprofit organization works in a businesslike way to promote the collective interests of its members rather than to seek financial gain for its owners.

The American Red Cross is one example of a nonprofit. Like other nonprofits, it relies on volunteers such as the SUNY students for much of its work. In this way, nonprofits and other community and civic organizations can perform useful services with minimal expense and without regard to earning a profit.

nonprofit organization economic organization that operates like a business but does not seek financial gain

Nam Y Huh/AP/Wide World Photos cooperative or co-op nonprofit association performing some kind of economic activity for the benefit of its members credit union nonprofit service cooperative that accepts deposits, makes loans, and provides other financial services

Community Organizations and Cooperatives

IMAQDSS^ A variety of nonprofit organizations provide a wide range of goods and services to communities and members.

Economics & You Have you volunteered for a community organization? Read on to find out how such organizations help their communities.

If their activities produce revenues in excess of expenses, they use the surplus to further their work.

Like for-profit businesses, nonprofit organizations use scarce factors of production. Their work is difficult to analyze economically because the value of their efforts is not easy to measure. Still, the large number of these organizations shows that they are important to our economic system.

Community Organizations

Community organizations include schools, churches, hospitals, welfare groups, and adoption agencies. Many of these organizations are legally incorporated to take advantage of unlimited life and limited liability. They are similar to profit-seeking businesses but do not issue stock, pay dividends, or pay income taxes.


Consumer Cooperatives

Housing cooperatives Discount price clubs Bulk foods store

Service Cooperatives

Credit unions Insurance companies Babysitting services

Producer Cooperatives

Farmers marketing cooperatives

► Cooperatives are voluntary associations of people formed to carry on some kind of economic activity that will benefit their members.

Economic Analysis differ?

How do the three kinds of cooperatives


A common type of nonprofit organization is the cooperative, or co-op. A cooperative is a voluntary association formed to carry on some kind of economic activity that will benefit its members. As Figure 3.7 shows, cooperatives can have a variety of goals. Cooperatives fall into three major categories: consumer, service, and producer.

The consumer cooperative is a voluntary association that buys bulk amounts of goods such as food or clothing on behalf of its members. Members usually help keep the cost of the operation down by devoting several hours a week or month to the operation. If successful, the co-op is able to offer its members products at prices lower than those charged by regular businesses.

A service cooperative provides services such as insurance, credit, or child care to its members, rather than goods. One example is a credit union, a financial organization that accepts deposits from, and makes loans to, employees of a particular company or government agency.

Like consumers, producers also can have co-ops. A producer cooperative helps members promote or sell their products. In the United States, most cooperatives of this kind are made up of farmers. The co-op helps the farmers sell their crops directly to central markets or to companies that use the members' products. Some co-ops, such as the Ocean Spray cranberry co-op, market their products directly to consumers.

fri^mnmrcra» Explaining How does a cooperative work?

Labor Unions

Workers may join a labor union that represents their interests. How do labor unions help their members?

Labor, Professional, and Business Organizations iMAQDSe^ Some nonprofit organizations are formed to promote the interests of workers and consumers.

Economics & You You just learned about nonprofit organizations that help consumers and communities. Read on to find out about groups that support workers and businesses.

Nonprofit organizations are not just limited to co-ops and civic groups. Many other groups also organize this way to promote the interests of their members.

Labor Unions

One important economic institution is the labor union, an organization of workers formed to represent its members' interests in various employment matters. The union participates in collective bargaining when it negotiates with management over issues such as pay, working hours, health care coverage, vacations, and other job-related matters. Unions also lobby for laws that will benefit and protect their workers.

The largest labor organization in the United States is the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), an association of unions whose members include workers in many different jobs. Other unions, such as the National

Education Association for teachers, are independent and represent workers in specific industries.

Professional Associations

Some workers belong to professional societies, trade associations, or academies. Such a professional association consists of people in a specialized occupation interested in improving the working conditions, skill levels, and public perceptions of the profession.

The American Medical Association (AMA) and the American Bar Association (ABA) are examples of organizations that include members of specific professions. These groups influence the licensing and training of their members, set standards for conduct, and are actively involved in political issues. Other professional associations represent bankers, teachers, college professors, police officers, and hundreds of other professions.

Business Associations

Businesses also organize to promote their collective interests. Most communities have a local chamber of commerce, an organization that promotes the welfare of its member businesses. The typical chamber sponsors activities ranging from educational programs to lobbying for favorable business legislation.

Industry or trade associations represent specific kinds of businesses. Trade associations are interested in shaping the labor union organization that works for its members' interests concerning pay, working conditions, and benefits collective bargaining negotiation between union and company representatives over pay, benefits, and other job-related matters professional association nonprofit organization of professional or specialized workers seeking to improve working conditions, skill levels, and public perception of its profession chamber of commerce nonprofit organization of local businesses formed to promote their interests

Andrew Lichtenstein/Corbis

Better Business Bureau business-sponsored nonprofit organization providing information on local companies to consumers government's policy on such economic issues as free enterprise, imports and tariffs, the minimum wage, and new construction.

Some business associations help protect the consumer. The Better Business Bureau is a nonprofit organization sponsored by local businesses. It provides general information on companies, maintains records of consumer inquiries and complaints, and offers consumer education programs.

^^HDSESS® Summarizing How do professional associations help their members?


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