Author: Peter Cantelon, Executive Director
How important are non-profits to the economy?
This is a question many have asked over the years in many ways. Frankly, this is a question that fits into the category of “gut feel” for a lot of people. People either “know” non-profits contribute or they “know” that they don’t.
For some non-profits are a necessary extension of good social governance and they fill a LOT of niches. Public schools, municipalities, museums, and hospitals are all non-profit institutions. Can you imagine being without any one of these.
Sure, people agree, these are very important “costs” to society and the benefits are intangible and unmeasurable. But are they unmeasurable? This kind of assumption puts non-profits in risk every time there is an economic downturn or a financial decision needs to be made.
“We’ll protect those things that provide measurable income first and worry about the warm and fuzzy non-profits as we can” is a sentiment that may pervade with some decision makers.
This is a question that the Jubilee Fund thinks about regularly. We serve the non-profit community and we too, are a non-profit. We know the economic advantages non-profits bring and it’s not simply based on out “gut”.
In 2019 StatsCanada released a report about the economic contributions of non-profits in the 10 years between 2007-2017.
The report is a wonderful source of real world, measurable data that shows just how valuable non-profits are to the Canadian economy. You can find the report here – The Daily — Non-profit institutions and volunteering: Economic contribution, 2007 to 2017 (statcan.gc.ca).
In 2017 the non-profit sector accounted for $169.2 billion of economic activity in Canada or 8.5 percent of our total Gross Domestic Product (GDP). GDP is a measure of all fiscal (as much as can be measured) activity in an economy.
In 2013 the economic value of volunteer contributions (the most recent year for this measure) equated to $41.8 billion. All of this while at the same time salaries in the non-profit sector in 2017 were almost five percent lower on average compared to the overall average salary.
How important is the non-profit sector to the economy? At 8.5 percent of GDP in 2017 it is the third largest contributor behind only real estate and manufacturing. This put it ahead of things like mining, construction, transportation and agriculture.
Of course, it is not an apples-to-apples comparison because all of the primary sectors that are measured in GDP have non-profit components. But this simply means that their contribution to GDP reduces if non-profit contributions are removed and considered in comparison on their own.
Non-profits are incredibly important to the economy of Canada and globally. As the third largest portion of the economy non-profits are strong contributors to employment and represent significant flow of money into our society. The loss or contraction of the non-profit sector would be devastating to the economy.
This is why the Jubilee Fund continues in its mission to help non-profits succeed at their missions and projects to impact poverty and why we regularly invite you to partner with us on that journey through investment and donations. By working with us you are a big part of helping support others and our economy.