Introduction to the nonprofit sector

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Introduction to the nonprofit sector

  1. 1. March 16th, 2013Steven Ayer, MBAPresident of Common Good Strategies
  2. 2.  What is the nonprofit sector? What does the nonprofit sector look like in Toronto? What trends are shaping the nonprofit sector? What do you need to know about nonprofits to act as consultants? Please ask questions throughout!
  3. 3.  Founder and President of Common Good Strategies Help nonprofits and government do research on the nonprofit sector Do marketing research and business planning Design technology development projects Have managed or worked on some of the largest research projects on the Canadian nonprofit sector
  4. 4.  Charities are endowed with a license by CRA if they do one of four things under a definition that goes back to early 1600s  Relieve poverty, promote education, promote religion or “other purposes beneficial to the community”  Nonprofits are organizations incorporated as such and do not distribute profits to shareholdersThis side was borrowed from Alex Gill of the Mendicant Group’s presentation onthis topic from March 24, 2012
  5. 5.  Currently work for a nonprofit organization… Currently serve on the board for a nonprofit organization… Are a returning Endeavour volunteer…
  6. 6. SERVICE EXPRESSIVE Health care  Arts and Culture Education  Sports and Recreation Social services  Advocacy Housing  Interest Representation International Development (e.g. unions)
  7. 7.  A study released last week from John Hopkins University comparing 16 countries with good data on their nonprofit sector found that:  Canada had the highest percentage of GDP coming from our nonprofit sector:  8.1%! (7.1% from paid staff, 1% from volunteers)  85% of our nonprofit sector was service-based (average was 73%)  10% expressive  5% Other Source: JHU Comparative Nonprofit Sector Project
  8. 8.  Money is essential to complete the work of most nonprofits Most money is spent on compensation ▪ Volunteers are essential but often insufficient Many executive directors were originally accomplished fundraisers Buyer and user are not the same! When demand goes up, revenue often does not
  9. 9.  Understanding Board Dynamics are Essential Always remain objective when interviewing clients Be very careful to ascertain how many resources are genuinely available Be wary of promises of future staff time Make sure your solution is implementable! Do not over-complicate things Engage many stakeholders in the organization!
  10. 10.  10,978 Charities  8829 Operating Charities  2122 Foundations $37.6 Billion in Total Revenue 270,473 Full-Time Employees 233,814 Part-Time Employees As for nonprofits, no one knows…
  11. 11. City # of Charities TORONTO 3462 NORTH YORK 1857 MISSISSAUGA 898 SCARBOROUGH 834 ETOBICOKE 669 BRAMPTON 452Other 64 communities 2806 Total 10,978
  12. 12. Category # of Orgs % of OrgsReligion 4,351 40%Welfare 2,639 24%Education 2,209 20%Benefit to the 938 9%CommunityHealth 691 6%Other 150 1% Total 10,978 100%
  13. 13. Rank Name of Organization Total Revenue 1 TORONTO DISTRICT SCHOOL BOARD $2,869,172,355 2 THE GOVERNING COUNCIL OF THE UNIVERSITY OF TORONTO $2,410,292,000 3 UNIVERSITY HEALTH NETWORK $1,589,061,000 4 YORK REGION DISTRICT SCHOOL BOARD $1,211,831,926 5 TORONTO CATHOLIC DISTRICT SCHOOL BOARD $1,043,472,000 6 YORK UNIVERSITY $923,373,854 DUFFERIN PEEL CATHOLIC DISTRICT SCHOOL 7 BOARD $904,816,000 8 SUNNYBROOK HEALTH SCIENCES CENTRE $847,310,000 9 CANCER CARE ONTARIO $836,437,306 10 THE HOSPITAL FOR SICK CHILDREN $704,417,000
  14. 14. Top 1% 77% of revenue (it is about the money) This data encompasses all Charities in Canada, not just Toronto
  15. 15. TOTAL REVENUE OF ORGS BY# OF ORGS BY SIZE OF ORGS SIZE OF ORG $10 mill + $10 mill + 344 $31,955$1 million - $10 $1 million - 662 $4,096 mill $10 mill$250k - $1 mill 681 $250k - $1 mill $1,112 $100k - $250k 1701 $100k - $250k $277 < $100,000 4637 < $100,000 $151 0 2000 4000 6000 $- $40,000 Millions
  16. 16. Average total compensation, full-time employees, by number of full-time employees, all charities, 2010 $78,766$80,000 $70,757 $68,466 $60,515$60,000 $52,142 $46,687 $41,882 $39,706 $41,323$40,000$20,000 $- 1 2 to 4 5 to 10 11 to 24 25 to 99 100 to 250 to 500 to 1000+ 249 499 999 Number of employees Source: A report I wrote on compensation for the HR Council yet to be released
  17. 17.  Most nonprofits do not have staff Most nonprofits have very little resources Most nonprofit resources are spent on staff Most nonprofits cannot afford a consultant Most nonprofits RELY on volunteers Most small nonprofits are started to solve a particular on the ground problem that is not being addressed by anyone else
  18. 18. 70%60% Fundraising Government 63% 59%50%40% 33%30%20% 31%10% 11% 10% 0% < $1 million $1 millon - $10 $10 million + million Charities Revenue Category Note: Numbers do not add-up to 100% since other categories are missing
  19. 19. 50.0% 40.0% 30.0% 29.4% 23.4% 20.0% 10.0% 0.0% 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009Source: http://www.imaginecanada.ca/files/www/en/researchbulletins/rb1501en.pdf
  20. 20. $9,000,000 $8,253,210 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $1,826,887 + 352% $-Source: http://www.imaginecanada.ca/files/www/en/researchbulletins/rb1501en.pdf
  21. 21. 1,000 $890 900 Average donations by highest income Fifth 800 quintile 700 Fourth 600 +153% Third 500 Second 400 $351 Top 300 200 100 0 2002 2007 1998 2004 2005 1999 2000 2001 2008 2003 2006 2009
  22. 22.  The highest income quintile:• +$32,000 / year in after-tax income  The second highest quartile:• +$14,000 / year in after-tax income  The lowest income quartile:• +$4000 / year in after-tax income
  23. 23. % of total charitable giving by tax filers coming from those with more than $80,000 in income, 1997 to 201160%50% 55%40%30% 28%20%10%0% Source: Cansim Table 111-0003
  24. 24.  What trends might affect the organization you’re working with? What might you do about it? Discuss with the group! Be prepared to share!
  25. 25. Feel free to contact me later: Common Good Strategies steve@goodstrategy.ca

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