Caught in the Middle: What Small, Non-profit Organizations Need to Survive and Flourish
2. What We Know and Don't Know about the Voluntary Sector
Given that 22 million Canadians donate money to voluntary sector organizations, and that 6.5 million of us volunteer our time to a group or organization (Statistics Canada, August 17, 2001), it is amazing that we know so little about the sector that provides a range of programs and services which touch all our lives. Because there is no agreed?upon international classification system defining the sector, we don't know what groups fall into this sector and what groups do not.3 Even the name of the sector is up for debate; it is variously known as the voluntary sector, non-profit sector, independent sector, charitable sector, third sector, civil society, and non-governmental organizations (NGOs) depending on the continent. In North America, we use Voluntary Sector and Non-profit Sector somewhat interchangeably. Although it too is contested, probably the most widely used general description of what constitutes non-profit includes these criteria: organizational (some formal structure), not part of government, any profits are reinvested in the organization, self-governing usually through a board of directors, and pursues some public good (Salamon & Anheier, 1996).
Even if there were an agreement on what types of organizations are in the non-profit sector, there is no single agreed-upon way to count them. National statistics are kept by the Charities Division of the Canada Customs and Revenue Agency for groups with charitable status only, and by Industry Canada for organizations that are federally incorporated. Provincial governments have counts of non-profit groups that obtain legal status through incorporation at the provincial and territorial level. Because many voluntary organizations have neither charitable tax status and do not file returns, nor have legal status as corporations, there is no reliable way to find out about them: what they do, how much money they have, and who runs the organization and programs (volunteers, paid staff or both).
Statistics on fund-raising4 confirm that size translates into money: a relatively few large organizations5 take in most of the charitable revenue. It is troubling, therefore, that there is little differentiation of organizations by size. Small organizations with modest budgets are lumped together with large universities, children's hospitals, symphonies, foundations, national charities, and churches.
With 47.8% of organizations reporting an annual income of $50,000 or less to the Canada Customs and Revenue Agency (Day & Devlin, 1997), the issue of size is critical. Small organizations are the largest part of the voluntary sector given that most organizations are not included in the federal data. Small organizations can encompass everything from self-help groups (e.g., Alcoholics Anonymous and parent-teacher associations) to choirs to conservation groups. As well, the small organization category can include anti-poverty advocacy groups, ethnic associations, heritage societies, minor baseball leagues, women's groups, local food banks, residents' associations, seniors' organizations, and arts groups. Small agencies generally have some paid staff to provide regular programs and services at their own location. To provide consistent service delivery, agencies incur ongoing infrastructure costs such as wages, benefits, rent, phone, power, and supplies.
Canada has three kinds of non-profit structural formality: unincorporated, incorporated, and charitable status. Small organizations could fall into any category. Because many organizations are not eligible for or don't want charitable status for purposes of issuing tax receipts,6 and would not be incorporated federally, they are not included in data collected by the federal government. Even if groups are incorporated provincially, they cannot necessarily be grouped nationally because each province and territory has its own guidelines and procedures for becoming incorporated. And many groups choose not to incorporate. The numbers, therefore, of non-registered, non-profit organizations in Canada are a guess at best. Estimates of the total number of registered and incorporated voluntary organizations are about 100,000 (Day & Devlin, 1997), while the estimates of unregistered, unincorporated organizations are in the 870,000 range (Voluntary Action…, 1999).
No matter which number is used, the sheer size of non-registered, non-profit organizations is staggering. Because we have no agreed-upon definition and no way to collect statistics, we officially have no idea of the impact of small organizations on our communities.
Mutual aid has been part of our society from the beginning. Without other formal supports to address poverty, sickness, natural disasters, education, health and culture, public-spirited people worked individually and in groups to help their neighbours. In fact, voluntary initiatives usually predated and paved the way for the more formal social safety net. Prior to 1900, organized public social welfare was varied among the different parts of Canada but generally limited to some help for the poor and indigent, free elementary and some secondary education, and institutions for the mentally ill and criminals. In some areas, institutions such as hospitals, orphanages and homes for the aged were run by charities with modest help from government in the form of grants. In the last decade of the 19th century, there were the beginnings of non-profit welfare organizations such as Children's Aid Societies, the Red Cross and the Victorian Order of Nurses. In Quebec, these roles were played by the Catholic Church. Throughout this period, private philanthropy provided supplemental relief to the poor through a wide variety of charity organizations. Private philanthropy, however, served to impede "a comprehensive and non-partisan approach to poor relief but also helped conceal the magnitude of the problems faced" (Guest, 1982, p. 14). This charity model, based on moral virtues, was inconsistent and often judgemental.
The twentieth century marked the development of our income security and social welfare system, probably hastened by the growing urbanization that introduced new social problems. The First World War brought a change in attitude among Canadians who recognized that we needed a social minimum in public welfare services. The Returned Soldiers Insurance Act in 1920, mothers' pension schemes in five provinces by 1920, and the Old Age Assistance Act of 1927 through to the unemployment insurance legislation in 1940, the National Housing Act in 1944, Family Allowances in 1945, the Old Age Security Act in 1951, and some provincial health insurance programs in the 1940s provided the basis of our social welfare. From the 1950s for a 25-year period, the idea of "collective responsibility and shared risk" (Armstrong, 1997) was a strong public value. Over the past 20 years, however, the social welfare system has started to unravel as governments cut programs and services with the expectation that volunteers and volunteer groups, including social action and self-help groups, can take on more and more responsibility for the social welfare7 of Canadians.
Expectations of the voluntary sector are high, but the reality is mixed. According to the latest Statistics Canada National Survey (National Survey of Giving…, August 17, 2001), volunteerism and the total number of individual donations are down. In comparison to 1997, a million fewer people now are donating their time to worthy causes. Those who do volunteer gave an average of 13 more hours per year, but this is still a loss of 56 million volunteer hours. And a few people do most of the work: "in 2000, the top one?quarter of volunteers contributed an average of 471 hours of their time throughout the year, and accounted for 73% of total overall hours" (National Survey of Giving …, August 17, 2001).
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