The non-profit industry is a diverse industry composed of entities focusing on technology, education, health, the arts and many other areas. There are several terms used to refer to non-profits, such as charities, not-for-profit and social enterprise, making it somewhat confusing to figure out how your non-profit idea should be categorized. To gain insight into what distinguishes a non-profit from a charity, refer to this guide published by the Canadian Revenue Agency, and go to this survey to see if charitable status is right for your organization. This industry overview offers resources for all social enterprises, charities and non-profits working for a greater social good.
According to research compiled from 2012 by StepUp BC, in British Columbia there are 29,000 non-profit organizations, employing 66,000 full-time and 48,000 part-time employees. The volunteer sector is vital for driving the industry with 1.5 million volunteers fueling operations. The non-profit sector is significant to the BC economy, larger than both the fisheries and mining industries combined. This industry is one of British Columbia’s largest employers and works with the government to deliver $6.1 billion in programs and services. Although there is expected growth for the future, changing demographics and wage competition with the private sector make it challenging to keep talented individuals in the industry. A comprehensive report conducted by StepUp BC on the status of the non-profit sector found that government funding has tended to fund more short-term, project-based endeavors and less interested in general operating costs. This survey pulled from many provincial and federal agencies, including Statistics Canada, BC Registry and BC Stats.
According to Imagine Canada, there are over 170,000 non-profit organizations in Canada, including 85,000 of which are registered charities. The non-profit sector contributes 8.1% to the total Canadian GDP, employs two million Canadians and depends on 13 million volunteers. Taking into account the “core non-profits” (removing hospitals and universities), the industry comprises 2.4% of Canada’s GDP, still a significant contribution to the economy. The source of 45.1% of income for the core non-profit sector comes from the sale of goods and services. Donations also contribute significantly to the income of non-profit and charitable entities, and according to a national survey published in 2010 by Statistics Canada there was more than $10 billion donated by 84% of Canadians age 15 and over.
Industry Trends and Challenges
According to a recent survey conducted by Imagine Canada and published in 2014, there were a few challenges that are facing the non-profit industry today. Stress continues to be a challenge for employee retention, with one in seven charities under “high stress” and one in three under “some stress.” Although stress levels have stayed the same, the cause of the stress is shifting, marking a growing correlation between high stress and projections of growing demand. The number of charities facing difficulties has gone down slightly and optimism towards future goals is up.
The survey continues to discuss some of the challenges that these trends suggest. The growing demand for services and goods are going to be difficult to meet in the future, and as the demand increases so does the stress level, making it difficult to manage the stress levels of the organization. A report by StepUp BC also mentions that these factors will result in labour and skill shortages in the non-profit industry, and with limited financial means it can be difficult to retain skilled employees. Solutions to this projected challenge include partnerships with similar organizations, development of training programs, and preparation of a comprehensive human resources strategy.
Another trend in the sector is the growth of a hybrid organization that includes social and business components, often referred to as a social enterprise. According to an earned income report of non-profits, more than 75% of non-profits report selling goods or services for organizational income. When asked if they considered their efforts to be social enterprise, more than half disagreed, implying that the term “social enterprise” has yet to be defined and understood in a uniform manner. A recent article in Non-profit Quarterly encompasses this sentiment, describing the conflict among use and context of the term, demonstrating a need to further define its meaning. They have a number of articles (another example here) dedicated to the perceived ambiguity in the term. Social enterprise is still young and evolving as a sub-industry, so staying on top of emerging trends with resources such as the Social Enterprise Council of Canada is especially beneficial.
Top resources to help you get started on your business research
Magazines & Trade Journals
Suggested Search Terms
nonprofit + Canada + start
management + nonprofit
"social enterprise" + projections
charity + "British Columbia" + register
If you would like to access more resources, the Non-profit Business Accelerator Guide is designed to help prospective and existing non-profits gather information for their secondary market research. The guide is broken down into four main sections that cover how to start your research, industry information, competitive information and customer information. Depending on your needs you can spend as much or as little time as necessary in each section.
If you find that you need more guidance before starting your secondary research, check out our Business Research Basics Guide, it will help you focus on what types of information you will need to gather and why it is important.
PHOTO CREDIT: Together Everyone Achieves More, created by PowerMax Energy on May 13, 2011. Image made available under Attribution No Derivatives 2.0 Generic license. Last viewed on May 26, 2014.
PHOTO CREDIT: Working Together Teamwork Puzzle, created by lumaxart on December 16, 2007. Image made available under Attribution-ShareAlike 2.0 Generic license. Last viewed on May 26, 2014.