Industry Overview: Nonprofits
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 page 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.
The state of data available on the nonprofit industry in Canada is old. To collect current data Imagine Canada’s policy team has created a working group to study the state of data about the charitable and nonprofit sector. For more information about this working group, refer to this page published by Imagine Canada. The next two paragraphs below discuss the older statistics for the charitable and nonprofit sector for BC and Canada.
According to research compiled from 2012 by StepUp BC, in British Columbia there are 26,000 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. According to the Charitable Donors, 2015 article in The Daily published by Statistics Canada, total donations reported by Canadian taxfilers rose to $9.1 billion in 2015, up 3.8% over 2014.
Industry Trends and Challenges
According to an article published in The Philanthropist on emerging trends for Canada’s nonprofits in 2016 there are five emerging trends: (1) the emergence of new leadership development and capacity-building opportunities for Canada’s sector leaders; (2) increased emphasis on ”decent work” and best practices in human resources; (3) the social finance and social innovation tipping point; (4) increased reliance on shared platforms and administrative outsourcing to weather a challenging economy; and (5) new frontiers for technology and data management that can help organizations maximize their impact and increase efficiency. Since trends do not emerge in isolation, it is important to reflect on the development of trends along a continum through time.
According to a survey conducted by Imagine Canada and published in 2014, there were a few challenges that were facing the non-profit industry. Stress continued 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 had stayed the same, the cause of the stress was shifting, marking a growing correlation between high stress and projections of growing demand. The number of charities facing difficulties had gone down slightly and optimism towards future goals was up.
The survey continued to discuss some of the challenges that these trends suggested. The growing demand for services and goods was going to be difficult to meet in the future, and as the demand increased so did the stress level, making it difficult to manage the stress levels of the organization. A report by StepUp BC also mentioned that these factors would result in labour and skill shortages in the non-profit industry, and with limited financial means it could be difficult to retain skilled employees. Solutions to this projected challenge included partnerships with similar organizations, development of training programs, and preparation of a comprehensive human resources strategy.
Another trend in the sector was 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 reported 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” had yet to be defined and understood in a uniform manner. An article in Non-profit Quarterly encompassed 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 Nonprofit Guide is designed to help prospective and existing non-profits gather information for 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 market research, check out our Intro to Business Research Guide, it will help you focus on what types of information you will need to gather and why it is important.