Are We on the Right Track? Inserting Democracy System unto Governance Mechanism for Not-For-Profit Organization

Abstract

Research on good governance mechanism has been done tremendously for more than five decades but not for the not-for-profit sector. The concept is still inclusive and under theorized. Most study focus on adopting concept from commercial sector which is sometimes misleads. This paper tries to find clear evidence by inserting new variables namely democracy. The study begins by looking at the importance of stakeholder and brings in the idea of positioning the society in the organization. Using multiple case analyses in Indonesia, this paper found that types of democracy has a great influenced on how organization sets their governance mechanism. For those who are experiencing an indirect democracy system, democratic governance is the ideal form. Meanwhile for the direct system, compliance model would be the most ideal term. And finally for an active participatory system, the study suggests to use participatory governance model. Among those three, the last model shall be justified as the most ideal form of governance for the sector, thus leaving something for future agenda.