Understanding Non Profits

Understanding Non Profits

If I could write a TMC (less than 800 words) and provide all the answers you need in understanding non-profits, I would be retired!! Nonprofits are complicated. This TMC is dedicated to share some information with you from the 2024 release on Statistics Canada Annual Survey on Business Conditions and then an editorial on those insights.

Non-profits contribute to areas such as social welfare, community development and advocacy. This sector bridges service gaps by facilitating access to housing, health care and education along with a variety of other goods and services. Overall, non-profit institutions in 2022 contributed $216.5 billion in economic activity, equivalent to 8.2% of the Gross Domestic Product for Canada.

In 2023, less than half of board of director positions in non-profit organizations were filled by women (47.9%). Around only one-tenth (9.4%) of all board of director positions are filled by members of racialized groups. People with a disability account for only 3.2% while First Nations, Metis and Inuit represent 2.8% and non-binary people at 0.8%.

As noted in the opening, non-profit organizations seek to meet the needs of and provide services to a wide range of diverse groups. In 2023, the general public (42.1%) made up the largest percentage of the groups that non-profits primarily serve, followed by children and youth (14.2%), religious or spiritual groups (9.1%), people in particular occupations and union groups (4.7%).

Non-profit organizations rely on diverse funding sources to operate. In 2023, the most prominent sources of revenue were individual donations (21.7%), membership fees or dues (17.7%), and transfers by provincial or territorial governments (10.5%).

Individual donations were a more important source of funding among smaller organizations. This was true for organizations without employees (21.4%), with 1 to 4 employees (31.6%), and with 5 to 19 employees (17.3%). Conversely, organizations with 100 employees or more (6.4%) and 20 to 99 employees (8.5%) depended less on individual donations and more on provincial and territorial transfers and fees for goods or services.

Organizations focused on business and professional associations and unions (49.7%) and sports and recreation (29.2%) were more likely to rely on funding in the form of membership fees or dues. Likewise, organizations without employees (22.3%) depended more on membership fees or dues than those that had some employees.

Distribution of Non-Profits based on Activity

  1. Sports and recreation 33.3%
  2. Religion 19.8%
  3. Grant-making, fundraising and voluntarism promotion 8.8%
  4. Social services 8.5%
  5. Development and housing 6.9%
  6. Business and professional associations and unions 6.1%
  7. Arts and culture 4.2%
  8. Education and research 3.9%
  9. Law, advocacy and politics 3.6%
  10. Not elsewhere classified 3.5%
  11. Health 1.0%
  12. Environment 0.4%

Distribution of Non-Profits based Organization Size

  1. 0 Employees 7%
  2. 1-4 Employees 6%
  3. 5-19 Employees 0%
  4. 20-99 Employees 4%
  5. 100 or more Employees 3%

As noted, non-profits are complicated. And though “sponsorship” or partnership” do not fall into the “funding” definitions (they are buried in fundraising and charitable giving) These organizations touch our entire population. Some are small organizations with no employees (55% of them) while others are huge at 100+ staff (1.3%). Some can reach large audiences while others small audiences. But overall, they have audiences… people they serve, people who donate, people who are members or subscribers or attend their events. This means they all have audiences. And that is what sponsors want to reach… your audiences. So, understand clearly… if you have an audience, sponsorship should be part of your revenue generation mix. It may be a large part of your revenue program or a small… but it is and should be part of the overall mix.

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