Satellite Account Provides Statistics on Economic Impact of Voluntary Sector

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Org: Statistics Canada
Date: 2007

The nonprofit sector has been at the centre of increased interest in recent years, both in Canada and internationally. Often referred to interchangeably as "civil society", the "voluntary", "third" or "independent" sector, this group of organizations plays a critical role in society, which is perceived to be unique, in many respects, from that of governments or corporations, and central to community engagement and to the building of social capital. Despite its acknowledged importance, the nonprofit sector was, until recently, invisible in most countries' official economic statistics.

Statistics Canada is among the first statistical agencies in the world to have carved out a new sector for nonprofit organizations through the development of the Satellite Account of Nonprofit Institutions and Volunteering. In doing so, the satellite account recognizes the nonprofit sector as an important pillar of Canadian society along with the private and public sectors.

The [concepts and methods used in the satellite account draw heavily on international standards described in the Handbook on Non-Profit Institutions in the System of National Accounts. Published by the United Nations in 2003, the Handbook is now available as a guide for statistical agencies around the world and Canada is one of the first countries to proceed with its implementation.

The Handbook recommends compiling economic statistics for a broad nonprofit sector, the boundaries of which are defined by structural and operational criteria. This is achieved by identifying nonprofit activity throughout the economic sectors in which nonprofit institutions currently reside. Gaining a clear, quantifiable overview of entities in this broadly-defined nonprofit sector is portrayed as crucial for a variety of reasons: they have been found to be a significant and growing economic force in countries throughout the world; they have a range of distinct features that justify their separate treatment for analytical purposes; and they are increasingly a focus of public policy concern. Since comprehensive statistics have not been compiled separately for nonprofit institutions, there is also a need for improved coverage and more precise specification of these units in national statistical systems.

First publication of the satellite account in 2004 was a milestone in knowledge development on Canada"s nonprofit sector. Providing estimates of the economic contribution of the nonprofit sector in Canada, it revealed the size, scope and nature of a key sector that performs a myriad of activities in local communities and engages millions of Canadians who join it as members and donate their time and money in support of its activities. This ground-breaking achievement was the culmination of an extensive research and data integration project to build comprehensive statistics on the sector within the Canadian System of National Accounts (SNA).

The development of the Satellite Account was funded through the Voluntary Sector Initiative to ensure that information on the size, scope and nature of the sector is now a permanent feature of Canada's official economic statistics. It includes a set of standard economic accounts covering the production, incomes and outlays of the nonprofit sector, mirroring information already available for other sectors in the Canadian economy. Because nonprofit organizations rely heavily on volunteers to undertake their activities, standard measures of economic activity are extended to include a replacement cost value of volunteer work. The satellite account received ongoing funding as an annual program at Statistics Canada.

It is important to note that the nonprofit sector"s economic contribution is but one dimension of its much larger impact in society, and complementary statistical initiatives were funded to address other aspects of the question. The first was a triennial repeat of the Canada Survey of Giving, Volunteering and Participating (CSGVP), a household survey of charitable giving, volunteering and participatory behaviour and, subsequently, the National Survey of Nonprofit and Voluntary Organizations (NSNVO), a first-ever survey of organizations, collecting information on the areas in which they work, the populations they serve, the extent to which they provide public benefits, and the financial and human resources they engage.

With this second edition of the Satellite Account of Nonprofit Institutions and Volunteering, two additional reference years for the standard accounts are added, 2000 and 2001, while existing estimates are revised back to 1997. The nonmarket extension, which puts an economic value on volunteer work, is presented for the years 1997 and 2000.

This report presents analysis for the period 1997-2001, with a focus on 2001. The standard economic accounts and the value of volunteer work are combined to create "extended" measures. These are shown for the two common years, 1997 and 2000. Separate estimates (for both the standard economic accounts and the nonmarket extension) are available for (i) the overall nonprofit sector including hospitals, universities and colleges, and (ii) the core nonprofit sector excluding these groups. Wherever possible, analysis is presented for the nonprofit sector as a whole, and for the core sector. Gross domestic product (GDP), total income and the nonmarket extension are shown by primary area of activity according to the International Classification of Nonprofit Organizations (ICNPO). All estimates are presented in nominal terms.