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Nonprofit Contribution To GDP Enormous, New Study Reports

Official data from eight countries reveals sizable economic role of nonprofits, volunteers

Johns Hopkins University

September 25, 2007

 
 

The civil society sector contributes about as much to gross domestic product in a wide range of countries as do the construction and finance industries and twice as much as the utilities industry, according to a Johns Hopkins University report released today at the first "Global Assembly on Measuring Civil Society and Volunteering" in Bonn, Germany.

These findings emerge from data generated by official statistical agencies in eight countries that are the first to implement new guidelines contained in the United Nations Handbook on Nonprofit Institutions, which was issued by the United Nations Statistical Division in 2003. These guidelines call on statistical agencies, for the first time, to pull together data on nonprofit institutions that up to now have been scattered in official statistics, and to estimate as well the value of volunteer work.

"We now have an officially sanctioned method for capturing the economic scale and importance of civil society and volunteering around the world, and what it is revealing is that this set of organizations is far more important than we have realized," noted Lester Salamon, report author and director of the Johns Hopkins Center for Civil Society Studies, which helped the United Nations draft the handbook and has been involved in promoting its implementation.

According to the report, the civil society sector — comprising private, not-for-profit hospitals, schools, social service agencies, symphonies, environmental groups and many other organizations — accounts on average for 5 percent of the GDP in the countries covered, and exceeds 7 percent in some countries, such as Canada and the United States. By comparison, the utilities industry — including gas, water, and electricity — in these same countries accounts on average for only 2.3 percent of GDP, the construction industry for 5.1 percent, and the financial intermediation industry embracing banks, insurance companies, and financial services firms, for 5.6 percent.

Other findings in this report, which covers Australia, Belgium, Canada, the Czech Republic, France, Japan, New Zealand and the United States, include the following:

  • For the five countries on which historical data are available (Belgium, Canada, the Czech Republic, Japan and the United States), nonprofit institutions (NPIs) have recently been growing at an average rate that is twice the growth rate of GDP (8.1 percent per year vs. 4.1 percent);
  • Nonprofits account for the lion's share of value added in many critical human service fields. In Belgium, for example, they provide more than 40 percent of the value added in health and more than two-thirds of the value added in social services;
  • Health and education account, on average, for 60 percent of the economic contribution of NPIs, though this varies widely by country;  
  • Philanthropy, including volunteering, generates at most only about one-third of nonprofit revenue. The balance comes from government and fees;
  • Within philanthropy, gifts of time (i.e. volunteering) outdistance gifts of cash by almost two;
  • Volunteer work accounts, on average, for about one-quarter of the economic contribution of NPIs, though this reaches 50 percent in New Zealand.
  • The "Global Assembly on Measuring Civil Society and Volunteering" at which this report has been released is the first official gathering of statistical offices involved in implementing the new U.N. NPI handbook around the world. The assembly, being held at the U.N. offices in Bonn, Germany, was organized by the Center for Civil Society Studies at the Johns Hopkins Institute for Policy Studies in cooperation with United Nations Volunteers and the United Nations Statistics Division. In addition to the eight countries that have already issued the NPI Satellite Accounts called for in the U.N. NPI handbook, 20 additional countries, both developed and developing, have committed to doing so and a number of others are about to begin implementation. The result will boost significantly the visibility and credibility of this set of institutions and permit more coherent public and private policies towards them.

    The full text of the report "Measuring Civil Society and Volunteering: Initial Findings from Implementation of the U.N. Handbook on Nonprofit Institutions" is available at www.jhu.edu/ccss. Printed copies can be purchased for a small fee by e-mailing unhandbook@jhu.edu.

    Reprinted with permission of Johns Hopkins University

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