Non profits are a major sector in Canadian economy
Annual revenues exceed $176billion. At 8.1% of our GDP, the non profit sector is larger than the automotive and agricultural sectors.
There are 2 million employees, which represent 11% of the Canadian workforce.
Over 13 million Canadians volunteer; in fact half of nonprofits are run entirely by volunteers.
The nonprofit industry is diffuse.
Size of your cause
Keep in mind how the cause for your client fits within the Canadian non-profit sector. Sport and recreation non profits compromise the largest number of nonprofits but generate very little donation dollars (mostly volunteer hours). Conversely, there are fewer health organizations but they are very successful in attracting donors and generating donations.
If your client is in the social service sector, social service nonprofits have many Canadian donors, yet receive smaller donation amounts. This points to an opportunity for obtaining more donations from the existing donors that Social Service non-profits already have. Consider spending more time and effort retaining donors, before acquiring new donors. See Acquisition vs Retention.
Charities are a subset of nonprofits.
- operates exclusively for purposes other than profit
- allows no part of its income to be available for the personal benefit of any shareholder.
- is exempt from income tax
About 50% of non-profits stay as nonprofits because they are funded by members e.g., club, society or association. The other 50% of non-profits, that need funds from donors, apply for a charitable designation from the Canada Revenue Agency so they can give tax receipts.
Donations generate a small part of revenue in the nonprofit sector.
Non profits have a life cycle
When a nonprofit is in the middle of a life stage, their needs are usually stable. However, when they transition to the next life stage, their needs explode in all practice areas.
Starting up – high energy, everyone involved, no formal structure
Developing – elected Board, formalize mission, small staff, founders starting to burn out.
Growing – recruited Board and committees focus on policy, ED and staff focus on managing, emphasis on fundraising, renewed commitment
Transforming – corporate-like Board, professional management, strategic alliances
Stagnating – Board/staff disconnect, declining interest, funding challenges.
By: Graham Boyce and Lelia MacDonald