(Prof. M S Balakrishnachar, Asst. Professor, Koshys Institute of Management Studies.)

Have you ever heard of golden handshakes? But, I have heard from many sources especially from NPOs that they’re laying off the employees by paying a lump sum amount. When I started finding the reason behind it, I got shocked and surprised.

NPOs are basically service-oriented organizations and they act as mediator between giver and taker of services,  for instance, Charitable trust, Clubs, Educational Institutions and many more. Few were started long ago with service motive, but now they are becoming profit oriented organizations. These firms used to generate money from donors, and for which, there is no taxation policy. Hence, they started to run their organizations by making profit. From April, 2020 due to pandemic people restricted themselves from giving donations, subscriptions, fees and others, which led to low income. By minting this situation they started doing golden handshakes with their employees by terminating.

The employees working in NPOs, who have service motive with minimal benefits will be expecting very less salary from the organisation. One of the common answers received by the employees is “we are under loss, we are not able to generate income from any sources, so kindly leave the job.”

The efforts and contributions of the employees are overseen who have worked extremely hard for the organization. We all believe that NPOs are having more ethics but the current situation makes me think about; 

Is paying salary  a burden for them?

What happened with regular donors and lifetime subscribers’ money?

Will people work for NPOs after COVID-19? And many more questions, which will be answered through my next blog…

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