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The Charitable Dilemma – Part 3

[In this, the third of a series of commentaries, Brad Odsen, Executive Director of the John Howard Society of Alberta continues his examination of issues impacting charitable organizations across Canada, with particular relevance to those in the human services business, including the John Howard Societies in Alberta.]

Imagine Canada, in partnership with Johns Hopkins University and the Government of Canada’s Voluntary Sector Initiative, has recently published a detailed analysis of the voluntary sector in Canada entitled The Canadian Nonprofit and Voluntary Sector in Comparative Perspective2.

Here are some of the things that this most recent research has revealed:

The nonprofit and voluntary sector is an economic force in Canada. It accounts for 6.8 percent of the nation’s gross domestic product (GDP) and, when the value of volunteer work is incorporated, contributes 8.5 percent of the GDP sector. If one sets aside the one percent of organizations that are hospitals, universities, and colleges, the remaining organizations contribute 4.0 percent of the nation's GDP.

Nonprofit and voluntary organizations employ 12 percent of Canada’s economically active population and provide 13 percent of its non-agricultural employment. Excluding the one-third of paid employees working for hospitals, colleges, and universities, the sector still employs nine percent of the economically active population and provides 10 percent of the non-agricultural employment. The entire nonprofit and voluntary sector engages nearly as many full-time equivalent workers as all branches of manufacturing in the country.

Despite its significant role in Canadian life, the nonprofit and voluntary sector faces a number of issues that may affect its future vitality. Many organizations report difficulties fulfilling their missions because of problems planning for the future, recruiting volunteers and board members, and obtaining funding from governments and private philanthropy. Most of those that rely on external funding from governments, corporations, and foundations report serious problems. Much of this can be attributed to the challenges they have had adjusting to changes arising from the substantial retrenchment of the Canadian state that occurred in the 1990's.

Organizations report that government funding has become more short-term, more competitive, and less predictable with support being targeted to programs and projects and little funding available to support overall organizational capacity. At the same time, the administrative burden associated with acquiring funding, reporting on funding, and mandated collaborations is increasing. As a result, organizations and the people who work and volunteer with them are under considerable strain. Moreover, the ability of organizations to identify and respond to needs earlier, more quickly, and often more innovatively than government appears to be eroding.

At the same time, Canadians may have reached the limits of their willingness to support nonprofit and voluntary organizations with the donations of their time and money. Although charities enjoy a high level of public trust and credibility, the number of volunteers appears to be declining and the number of donors is not growing.

Taking the broad view, the lack of a coherent policy framework in Canada for its nonprofit and voluntary sector may be one of the biggest constraints to its future development. Compared to the many initiatives that have been developed to support Canadian business, little has been done to improve the capacity of the nonprofit and voluntary sector to deliver social and economic benefits.

I am, and have been a volunteer for almost four decades. The common understanding in this sector in the 70s and 80s was what was called the “80/20 Rule” – 80% of the volunteer work was done by 20% of the population, and 80% of the funding came from 20% of the potential funders. But I had come to the conclusion over the last decade that this Rule no longer applies; it is now the “90/10 Rule”. Regrettably, what I have observed in the sector has been substantiated by the research cited herein.

There are two critical questions that have to be answered:

  1. Do we want our community-based voluntary organizations to die an agonizingly slow death,we want them to thrive? And
  2. If we want them to thrive and grow, what needs to be done to reverse the course we are presently on?

I hope to provide some suggestions that address these questions in the next issue of The Reporter, due out in the Fall of 2005.

2 Hall, Michael H. et. Al., Toronto, 2005,, ISBN:1-55401-103-5, pp.iv & v. Emphasis added.