OVERVIEW OF NON-PROFIT ORGANIZATION MODELS IN VIETNAM

Non-Profit Organization (NPO) is a general term referring to organizations established to address social issues and promote community development, rather than primarily aiming to maximize profit.  The diversity of non-profit organization types in Vietnam reflects the richness and maturity of civil society activities.  Each type has its own advantages and disadvantages, suitable for different goals, capacities, and stages of development.  A thorough understanding of the nature of each model not only helps social activists choose a suitable path but also provides businesses, funders, and the community with deeper insights when collaborating and providing support.  In this article, ASIF Foundation will analyze 5 common types of non-profit organizations in Vietnam.

1.       Associations

Nature: Associations are established on a voluntary basis by Vietnamese citizens and organizations sharing the same profession, interests, or field of concern.  The main objective is to unite, cooperate, protect the legitimate rights and interests of their members, and contribute to the socio-economic development of the country.

Legal and Operational Characteristics

• Operate under the provisions of Decree 45/2010/NĐ-CP.

• Possess legal entity status, their own seal, and bank account.

• Operate on principles of voluntariness, self-governance, democracy, and transparency.

• Can receive funding and implement social programs and projects.

Advantages and Disadvantages: 

• Advantages: Clear legal framework, easy to work with state agencies.  Associations create a forum for members to cooperate, learn, and have a strong representative voice.

• Disadvantages: Relatively complex establishment procedures, subject to state agency management.  Financial resources may be limited if primarily reliant on membership fees.

Typical Examples: Vietnam Red Cross Society, Vietnam Youth Federation, Vietnam Association for the Protection of People with Disabilities and Orphans.

2.      Foundations

Nature: Foundations are formed from assets initially contributed voluntarily by individuals or organizations to achieve goals such as supporting and promoting cultural, educational, health, scientific, charitable, humanitarian, and other social objectives.

Legal and Operational Characteristics:

• Operate under Decree 93/2019/NĐ-CP.

• Do not have members; operate through a Management Board.

• Require minimum charter capital depending on the scope of activities.

• Focus on mobilizing, managing, and allocating financial resources.

Advantages and Disadvantages:

• Advantages: Better ability to mobilize funding from large sources (businesses, international organizations).  Can respond quickly to urgent needs.

• Disadvantages: Strict establishment conditions (especially regarding capital).  Complex financial management processes, requiring high transparency.  Activities may be limited to the registered funding scope.

Typical Examples: Vietnam Peace and Development Foundation, VinaCapital Foundation.

3.      Social Enterprises

Nature: This is a business model established with the primary goal of solving social and environmental problems.  Profit is not the ultimate goal but a tool to sustain and expand social impact.

Legal and Operational Characteristics:

• Established and operate under the Enterprise Law.

• Must commit to reinvesting at least 51% of annual profits to achieve their registered social objectives.

• Financial self-sufficiency through providing products and services to the market

Advantages and Disadvantages:

• Advantages: High financial sustainability, not entirely dependent on funding. Flexible business model, capable of attracting impact investors.

• Disadvantages: Legal framework is still being finalized.  Significant challenge in balancing business goals and social mission.  Difficult to access traditional aid funding intended for NPOs.

  
  

Typical Examples: KOTO (Know One, Teach One), Tòhe, Imagtor, Maison Chance, Vụn Art

4. Science & Technology Organizations

Nature: These are non-profit research institutes and centers for applying and transferring technology, carrying out scientific research and technology development tasks to serve the public interest.

Legal and Operational Characteristics:

• Established under the Law on Science and Technology.

• Specialize in a specific scientific field.

• Revenue comes from research contracts, science and technology services, and funded projects.

  
  

Advantages and Disadvantages:

• Advantages: Directly contribute to the nation's scientific and technological development, capable of creating breakthrough solutions for social problems.

• Disadvantages: Highly specialized, sometimes difficult to access by the general public.  Funding often depends on short-term projects, lacking stability.

ypical Examples: Research and Development Center for Rural Community (RDSC), Institute for Social Development Studies (ISDS).

5.      Social Assistance Centers

Nature: These organizations provide direct care, nurturing, education, and support services to vulnerable and disadvantaged groups such as orphaned children, people with disabilities, lonely elderly people, victims of violence, etc.

Legal and Operational Characteristics:

• Can be public (managed by the state) or non-public (privately established).

• Focus on providing direct services and meeting urgent daily needs.

• Serve specific vulnerable populations rather than representing member interests.

Advantages and Disadvantages:

• Advantages: Address urgent social problems, bringing direct and tangible impact to beneficiaries.

• Disadvantages: Financial resources can be unstable, especially for non-public facilities.  Often lack specialized staff for fundraising and organizational development.

Typical Examples: Hanoi Social Work Service Center, Thao Dan Children's Protection Center, SOS Children's Villages.

The diversity of non-profit organization models in Vietnam indicates a dynamic and developing social ecosystem.  Each type, with its unique characteristics, plays an important role in building a just and sustainable society.  Choosing and operating the right model will be key to maximizing positive impact on the community.