Page 1 of 7
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
e-ISSN: 2395-0463
Volume 02 Issue 8
August 2016
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 422
Social Welfare Organization in Malaysia: Issue and
Proposed Actions
Ng Chun Won1; Mohmad Yazam Sharif2; Chong Yen Wan3
School of Business Management, Universiti Utara Malaysia,
wcng.2t@gmail.com ; yaazaam@yahoo.com ; chongyen@uum.edu.my
Abstract
This paper provides a rare opportunity in
discussing thoroughly the practical issues of
social welfare organization in Malaysia.
Besides, it also highlights the proposed
actions for managing the organization
effectively. Social welfare organization is an
organization that operates in the social
welfare purpose to serve the community and
thus is crucial in nation building. It has role in
environmental, welfare and economic
reformation of a country. It provides
grassroots actions and caters the needs of the
community. By doing this, it gives out positive
values to the community. However, in recent
years, the social welfare organizations in
Malaysia face a daunting task to operate
effectively. Issues like decreased funding,
mismanagement, lack of volunteers and
experienced staffs contribute significantly to
the ineffectiveness of the managing welfare
organization in Malaysia. These issues pose a
challenge on how to manage the social
welfare organization effectively.
Keywords: Social Welfare Organization,
Issues, Possible Action, Mismanagement,
1.0 INTRODUCTION
Worldwide, social welfare organizations are
anticipated to play a crucial role and make
high impact in environmental, welfare and
economical reformation (Nicholls, 2009;
Swanson & Zhang, 2010). However, social
welfare organization is facing difficulties in
operation in recent years (Gandy, 2012;
Othman, Ali and Omar, 2012). The Social
welfare organizations of Malaysia also face
issues like decreased funding, mismanagement
and lack of volunteers and experienced staffs
which affect the effectiveness of organizations
(Othman, Ali, & Omar, 2012). Ineffective
management of the social organization might
cause social problems in the future, especially
when such organizations and volunteers are
unable to provide education, food and a
healthy environment. When the situation of
ineffective management of social welfare
organization happens, those of the helpless
who need to be assisted (eg. Orphans, old folk,
disabled people and single mother) are facing
crisis. Worse still, the orphans will engage in
illegal activities (Ibrahim, 2014). These
phenomena may develop into more intense
problem among the social welfare
organizations, which in turn becomes a
funding constraint for public welfare in the
long run. This problem urges the Malaysia
government to look for better solutions to
solve the problem encountered by social
welfare organizations.
Page 2 of 7
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
e-ISSN: 2395-0463
Volume 02 Issue 8
August 2016
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 423
2.0 THE CONCEPT OF
SOCIAL WELFARE
ORGANIZATION
Research on the administration and
management of social welfare organization is
still relatively inadequate (Barendsen &
Gardner, 2004). Therefore, it is vital to define
social welfare, especially in the context of
Malaysia in order to differentiate it with those
business entities that mainly focus on profit.
There are different definitions of social
welfare organizations. Dolgoff and Feldstein
(1984) define social welfare as “organizations
that are functioning to meet the needs of
society by preventing instability and by
providing for social continuity” (p. 4). Social
welfare organization is defined an
organization that operates under social welfare
purposes which is primarily engaged in
promoting in some way the common good and
general welfare of the people of the
community (Internal Revenue Service, 2016).
On the other hand, Young (2001) defined
social welfare organizations as the entity with
a social mission. In Malaysia context, social
welfare organization refers to charitable
organization that depends on public donation
and government grant to operate (Hasnan,
Abidin, Mohamad, & Kamarudin, 2012).
In Malaysia, all social welfare organizations,
as one kind of non-profit organizations, must
register with the Registrar of Societies (ROS)
and enjoy tax-exempt status (Nasir, Othman,
Said, & Ghani, 2009). Social welfare
organizations differ from other type of non- profit organizations in that it focuses on
charitable goals to serve those who are in need
(Hasnan et al., 2012). According to the Social
Welfare Department of Malaysia, social
welfare organization are institutions that cater
for the social needs of children, senior citizens,
epidemic patients, and people of
developmental disability; protection and
rehabilitation institutions (Official Portal of
Social Welfare Department, 2015).
Social welfare organizations usually run
charitable activities to get funding and
organize fund raising projects such as jumble
sales to increase sources of income (Nasir et
al., 2009). Nevertheless, there is no specific
law in Malaysia on those charitable activities
at present (Hasnan et al., 2012).
3.0 Issues Of Social
Welfare Organization In
Malaysia
According to the Social welfare Department
(2014), a number of social welfare
organizations which receive grants in
Malaysia increase from 203 to 254 (2009-
2013 years). This can refer to Figure 1. The
statistics are suggestive of the phenomenon
where new social welfare organizations are
actually increasing to meet the needs which
prior organizations failed to fulfil the social
needs (Helm, 2007). The postulated above
makes sense as Ott (2001, p. 2) Put it, “it is a
means of reacting to marketplace failures by
filling economic voids with volunteer time
and charitable contributions and for filling
voids left by government agencies that cannot
or will not adequately serve citizens in need”.
Fewer fund is distributed to more social
Page 3 of 7
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
e-ISSN: 2395-0463
Volume 02 Issue 8
August 2016
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 424
welfare organizations will create a problem of
lacking of funds in the long run (Farruggia,
2007; Rojas, 2000; Tucker, 2010; Warm,
2004).
Figure 1 Number of Social Welfare Organizations of Malaysia which receive grants, from 2009-
2013.
These issues can deter the effectiveness of
social welfare organization. The three main
issues in Malaysian social welfare
organizations are lack of funding,
mismanagement and lack of volunteer staffs
(Othman, Ali, & Omar, 2012) and are
discussed in details in the next sections. For
that reason, social welfare organizations are
seeking for ideas and solutions to solve their
current issues (Young & Salamon, 2002).
3.1 Lack Of Funding
Lacking of funding is the first main issue of
the ineffectiveness of the Malaysian social
welfare organization. Orphanage homes in
Malaysia have the most serious problem in
operation because of lacking in funding.
According to Ishak (2012), most of the
orphanage homes in Malaysia face the
problem of income deficit in relation to their
expenditures. Isaac has also highlighted that
the orphanages will be burdened by huge costs,
which range from RM8, 536 to RM28, 986
each month. Worse still, due to the problem of
deficit, some orphanage home staffs have to
use their individual income to cover certain
fixed expenses, such as the food and
accommodation expenditures. Moreover,
some orphans are forced to work to generate
additional income for the problem of deficit
(Syed Ali, 2011). This phenomenon showed
that the orphans are not well-protected since
they are forced to work in ineligible condition
(Ishak, 2012).
0
50
100
150
200
250
300
2009 2010 2011 2012 2013
Number of Social Welfare
Organisastions which
receive grants, from 2009 -
2013
