Cornerstones of Community: The first national portrait of Canada's nonprofit sector
September
27, 2004
By Nicole Zummach
If you've ever tried to get a big group of people assembled in the
same room to have their photo taken, you know how hard it can be. It's
not surprising, then, that it took two and a half years of research
to get a snapshot of Canada's nonprofit and voluntary organizations.
Finally, the nonprofit sector can take a good look at itself, thanks
to last week's release of the much-anticipated National Survey of
Nonprofit and Voluntary Organizations (NSNVO). This landmark study,
conducted by Statistics Canada in conjunction with the Canadian
Centre for Philanthropy (CCP), is the most comprehensive profile
of the sector ever undertaken in Canada. It highlights not only the
make-up of Canada's nonprofit sector, but also its contributions to
the economy, its impact on communities, and its capacity and long-term
sustainability.
Size and scope of the voluntary sector
For years we've know the approximate number of registered charities
operating in Canada because of data compiled by the Canada Revenue Agency
(CRA). However, the number of nonprofits remained more or less a mystery,
until now. In 2003, about 161,000 nonprofit and voluntary organizations
were operating across the country, 56% of which were registered charities.
Almost 60% of Canada's nonprofit organizations are located in either Quebec
(29%) or Ontario (28%), while the other 40% are spread out across the
rest of the provinces and territories. Ontario nonprofits account for
43% of all revenues, 40% of all volunteers, and 47% of all employees.
It is New Brunswick, however, that has the highest proportion of registered
charities (68%), followed by Nova Scotia (65%), and Manitoba (62%).
About one-fifth of Canadian nonprofits (21%) are sports and recreation
organizations, while another 19% are religion-related. Social services
comes in third, accounting for approximately 12% of all nonprofits. Almost
all religious groups (94%) are charities, as are 87% of hospitals, 79%
of other health-related and grantmaking organizations, and 72% of social
service groups. By comparison, only about 27% of sports and recreation
groups, 23% of groups working in development and housing, and 7% of business
and professional associations and unions are charities. In every province
and territory there are more organizations working in the areas of religion,
sports and recreation, and social services than in any other area of activity.
An economic powerhouse
In 2003, Canadians donated more than $8 billion to nonprofit organizations, and
19 million volunteers contributed more than 2 billion hours of volunteer
time, or the equivalent of more than 1 million full-time jobs. All of
this helped nonprofit and voluntary organizations post $112 billion in
revenues in 2003. About 1% of nonprofits have annual revenues of $10 million
or more and account for 59% of all revenues. In contrast, 42% of organizations
have annual revenues of less than $30,000 and account for just 1% of all
revenues. Less than 3% of organizations report having no revenue at all.
Despite the high concentration of revenue among a very small group of nonprofits, the sector as a whole is a force to be reckoned with in Canada's economy. In 1999, the sector's economic contribution amounted to 6.8% ($61.8 billion) of gross domestic product (GDP). When volunteer work is taken into account, that number jumps to 8.6%. Even if volunteer work isn't included in the value, the nonprofit sector's extended GDP is more than eleven times that of the motor
vehicle manufacturing industry, over four times larger than agriculture, and twice the value of the mining, oil and gas extraction industry.
Hospitals (including residential care facilities), universities, and colleges
accounted for most nonprofit economic activity in 1999. Their
combined GDP reached $39 billion, or 63% of the total. The other $22.8 billion was generated by a host of smaller organizations, including: social services (20%); culture and recreation (16%); development and housing (15%);
religion (11%); business and professional associations and unions (10%); and health (9%).
In 1999, spending by nonprofit organizations totalled $95.1 billion, 98%
of which represented operating expenses related to the production of goods
and services. Compensation was the largest expenditure in the sector,
accounting for 57% of total spending, while 37% went to goods and services
used in production. In 1997, the sector paid $48.9 billion in labour compensation
and benefited from volunteer effort worth about $14 billion. Currently,
there are just over 2 million paid employees in the sector, one-third of whom are
employed by hospitals, universities, and colleges. Despite this substantial labour force, more than half of nonprofits rely solely on volunteers to fulfill their mission, with no paid staff at all.
Nonprofits benefit all Canadians
Canadians are well served by nonprofit and voluntary organizations, perhaps more
than they realize. Most organizations (63%) focus their services on the
local neighbourhood, city, or rural municipality where they are located.
Another 19% serve a specific region of their province or territory, or
the province as a whole (8%). Although the big national organizations
are the ones the public is often most familiar with, they only comprise
3% of Canadian nonprofits, while another 3% operate internationally.
Organizations in Alberta are most likely to have a local focus (74%), followed by those in Saskatchewan (68%). In contrast, Prince Edward Island has the most organizations that
report serving the entire province (27%). Organizations in Quebec are most likely to report serving a region of their
province (26%).
Almost three-quarters (73%) of nonprofit and voluntary organizations provide services or products directly to people (as opposed to other organizations). Of these, 46% serve the general public, 23% serve children and youth, 11% support the elderly, and 8% serve people with disabilities or special needs. Others serve specific populations, including Aboriginal peoples, immigrant populations, and religious communities, to name a few.
The western provinces have the largest percentage of organizations serving children and young people (18% to 25%).
Saskatchewan and Manitoba have the largest percentage of organizations dedicated to serving the
elderly (16%), and British Columbia has the largest proportion of organizations serving persons with disabilities (11%).
The capacity to serve
While nonprofits are clearly an integral part of the Canadian fabric, they also
struggle with significant challenges, the most pressing being funding
and sustainability. In recent years, many in the sector have decried the
cutbacks in government funding. Nevertheless, governments still provide
49% of the funds that organizations receive, of which four-fifths comes
from provincial governments. Earned income from non-governmental sources,
generated by memberships and sales of goods and services, as well as investment
income and charitable gaming, accounts for a further 35% of revenues.
Perhaps surprisingly, gifts and donations represent just 13% of overall
revenue.
Larger organizations, with annual revenues of $10 million or more, depend
on government sources for more than half (58%) of total revenues. Hospitals
get 82% of total revenues from governments, followed by health-related
organizations (70%), social services (66%) and universities and colleges
(56%). Among smaller organizations, those with annual revenues of less
than $30,000, government sources account for only 12% of total revenues.
Close to half (49%) of all organizations report difficulty obtaining funding,
earning revenues (42%), or competing with other organizations for funding
or revenues (43%). But funding is not the only challenge. The majority
of organizations (57%) also report difficulty recruiting the types of
volunteers the organization needs, difficulty obtaining board members,
and difficulty planning for the future. Other problems include: increasing
demands for services or products (43%); difficulty adapting to change
(41%); lack of internal capacity (39%); difficulty participating in development
of public policy (39%); and difficulty providing training for volunteers
(38%). Issues related to paid staff (recruitment, training, and retention)
were reported as problems by less than 30% of organizations.
As Dr. Michael Hall, vice president of research for the CCP, concludes,
"Until this study, the role that nonprofit and voluntary organizations
play in Canadian life was largely unknown. Now there is strong evidence
of the ability of these organizations to mobilize Canadians, of their
economic importance, and of the difficulties they face. We now need to
develop strategies that will enable them to achieve their full capacity
to serve their communities."
To download the full NSNVO report in PDF format, visit: www.nonprofitscan.ca/pdf/NSNVO_Report_English.pdf.
To view the results of the Satellite Account of Nonprofit Institutions
and Volunteering, a set of statistics describing the economic contribution
of the nonprofit sector in Canada, visit: www.statcan.ca:80/english/freepub/13-015-XIE/13-015-XIE2004000.htm.
