Larger percentage of GDP and more employees, but community organizations showing declines

New data about the charitable and nonprofit sector by Statistics Canada shows that charities and nonprofits accounted for 8.5% of Canada’s Gross Domestic Product (GDP) in 2017. This is equivalent to $169.2 billion of value added to the national economy and represents a substantial increase from the 7.4% of GDP they produced just a decade ago. The newly released figures also show that total employment by charities and nonprofits has climbed to 2.4 million, up from 2.1 million in 2007.

In 2017, real GDP in the nonprofit sector increased by 1.0%. This was driven by government nonprofits such as hospitals and universities (see “Terminology” below) which grew by 1.9%. In contrast, GDP for community and business nonprofits shrank by 1.3%.

In 2017, community nonprofits such as social services or sports and recreation organizations received the largest part of their income (37.2%) from Canadian households and non-governmental institutions – 17.8% in the form of donations from households, 14.1% as membership fees, and 5.3% as contributions from businesses or other institutions. The second largest part of their income (32.0%) was earned income – 27.8% from sales of good and services and 4.2% from investments. The remainder (30.8%) came from various levels of government – 20.5% provincial, 7.0% federal, and 3.3% local.

As might be expected, government nonprofits received the largest part of their income from government (72.9%), followed by 21.3% from the sale of goods and services, and 5.8% from other sources including donations or contributions from households and business. Business nonprofits received the largest part of their income from the sale of goods and services (61.6%) followed by 33.8% from membership fees, and 4.6% from other sources including investment income and government.

“Imagine Canada is pleased that Statistics Canada has provided this one-time update of data pertaining to the size and scope of the sector and hopes that the federal government commits to this becoming a regular occurrence” stated Bruce MacDonald, President & CEO of Imagine Canada “This information points to the continued importance of charities and nonprofits as key contributors to a vibrant and dynamic economy in addition to the incredible impact their work has on the lives of Canadians each and every day.”

Other key data points
Government nonprofits account for the largest portion of the nonprofit sector’s economic activity (73.2%) followed by community nonprofits (16.4%) and business nonprofits (10.4%).

Looked at another way, the lion’s share of economic activity in the total nonprofit sector (i.e., including all three categories of nonprofits) was in health (41.5%) and education (30.1%). The third largest category was social services at 9.9%.

Employment in the total nonprofit sector increased by 1.1% in 2017 on the strength of government and business nonprofits, which increased 1.9% and 1.7% respectively. Among community nonprofits, employment decreased by approximately 6,000 jobs (-0.9%).

In 2017, average compensation per job in the nonprofit sector was $57,000. Employees of community nonprofits received approximately $42,500 while employees in business and government nonprofits received $54,400 and $63,000 respectively. In contrast, average compensation per job over the entire economy was $59,900.

Terminology
The newly released data divide charitable and nonprofit organizations into three categories:

Community nonprofits include organizations engaged in activities such as social services, advocacy, and sports and recreation. These organizations are not substantially controlled by government and provide goods and services to households, either for free or at prices that are not economically significant. In standard macroeconomic measures, they are referred to as nonprofit institutions serving households.
Business nonprofits include organizations such as chambers of commerce, business associations and condominium associations. These organizations are not substantially controlled by government, provide goods and services at prices that are economically significant, and have limits on how they may redistribute any surplus they may produce. In standard macroeconomic measures, they are classified to the business sector.

Government nonprofit include organizations such as hospitals, universities and colleges. These organizations are independently constituted and exist separately from government but are substantially under governmental control. In standard macroeconomic measures, they are classified to the government sector.

Imagine Canada is the national charitable organization whose cause is Canada’s charities. Our three broad aims are to amplify the sector’s collective voice, create opportunities to connect and learn from each other, and build the sector’s capacity to succeed.

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