When is a nonprofit not a charity?

In this summary of her presentation to the seminar launching the report, Oonagh Breen looks at the proportion of registered charities relative to the full population of nonprofits, and discusses how Ireland compares with some other jurisdictions around the world, in terms of the full extent of the third sector.

Now that we are beginning our second year with this data from Benefacts, I wanted to look at how we are mapping the non-profit sector and to ask that question that we always do, because we live on a small island. How do we compare with the rest of the world? I want to raise this and some other key questions here this morning. – even if I can’t answer them all – because I think these are the types of things that we should be thinking about. What size is the sector in Ireland and how do we compare to other countries? Who is doing the counting? How does the size of our non-profit sector compare to our registered charity sector? How rich is civic engagement per capita – meaning, how “thick” is society here, how connected are we to one another? We certainly have this idea of ourselves in Ireland as a very generous nation. When we dig down into the data, how many of these questions can we answer?

So the first thing I want to highlight is the new data, specifically non-profits registered with their local authorities through public participation networks (PPNs), most of which don’t appear on any other register. The PPNs are really interesting, because they take us to the grass roots of society. They are the sort of organisations that you are involved in at a local level, that you go out to when you come home from work, that you mightn’t even think of as a charity or as a nonprofit, even though you are a signed up member and you pay a subscription every year. These clubs, associations and societies are an essential feature of the landscape of Irish civil society and in recent years they have started to be registered under the 2014 Local Government Act which means that of the 31 local authorities, 29 so far have started to make their lists available. This body of data is going to grow — both the numbers of associations listed, and the group of local authorities providing data — so this time next year I’ll be saying, there are 31 local authorities and we have 31 published lists.

The registers collected by PPNs celebrate local civic engagement, which they record under 3 headings; social inclusion, community and environment. So if you go into any of these lists, you’ll find your residents’ association, you’ll find the local playgroup, you’ll find the active retirement association, you’ll find the scouts, the girls guides, the men’s sheds. All of those things add up to define our nonprofit culture and nobody has mapped this before. So what we have here is a massive piece of new data. Massive in the sense that at the moment, as at the end of Quarter 1 this year, 9,000 local bodies have been brought into the Benefacts database, of which the majority – 83% – are new to Benefacts, in the sense that Benefacts hasn’t found them on any other registers (such as the list of companies, or associations that benefit from charity tax relief, or registered charities).

So where do we sit compared to everyone else? Let’s start with New Zealand, because at 4.7 million people they have a population very similar population to ours and, according to Statistics New Zealand, in 2013 there were 114,000 non-profits. That’s 114,000 compared to 29,000 reported by Benefacts at the moment in two countries with a similar population. Another important comparative statistic is the number of registered charities as a proportion of all non-profits. New Zealand has more than 27,000 charities or 25% of the non-profit sector there, if you do your math, compared to 29,000 non-profits and just under 9,000 registered charities here.

Now they have been counting non-profits and charities since 2005, so New Zealand has a 10 year head start on us. But even back in 2005, they had 97,000 non-profits on the list, so we have a bit of a way to go, if we think we are as connected as they are. But maybe there are thousands more non-profits out there and we just haven’t mapped them yet. Now keep those figures in mind and let’s see how they compare with the other jurisdictions I’m going to look at briefly.

Next door neighbour Australia, with a much bigger population at 24 million people, had 600,000 nonprofits according to Australian Productivity Commission in 2010. Quite a big number, but then it’s a big country. When I talk about who’s doing the counting, I asked the question, how do they know they have 600,000?

When I checked with my international contacts in Australia, they said, it’s a bit of an estimate, we are not really sure, we don’t have a Benefacts model where we can tie down who each of these bodies are, using a unique identifier. Our researcher did some work in the 1990s, and that’s the estimate we decided to run with: 600,000 non-profits of which 55,000 are registered charities. In Australia they started counting charities in 2013, so again, a little bit before us, but not much. So to do the math again, only 9% of Australian non-profits are registered as charities, which means they make up about one-tenth of the non-profit sector. But the big caveat is we are not sure about the reliability of that estimate of 600,000 is: it might be a lot more, it might be a lot less.

Canada is another big common law jurisdiction with 36 million people, so 9 times bigger than Ireland. In 2005, the Bureau of Statistics in Canada estimated that there were 170,000 non-profits in Canada. Now that figure is interesting, because when I went to talk to my Canadian friends last week, I discovered that that figure includes only incorporated non-profits: unlike Ireland (thanks to Benefacts), they have no data on unincorporated non-profits. When they carried out some research in this field, they went for the available registers, the easy ones to count. Corporations are always much easier to count than unincorporated organisations. So that figure of 170,000 is probably very under-stated. As regards registered charities in Canada, the number is 86,000, which means 50% of the non-profit sector is composed of charities.

Closer to home, the population of the UK is 65m if you include Northern Ireland, Scotland, England and Wales. If we combine all of their different charity registers, the aggregate number of registered charities in the UK is 315,000. Last time they issued a figure for their non-profit sector (from the Civil Society Almanac which is quite a reputable source, updated annually), the figure was 900,000 and that was in 2014, so the percentage of charities relative to the total population of non-profits was 35%. Unfortunately, every year since then, they only count the registered charities, which is a much smaller number, so we have lost out. And again you wonder about the thinking behind not collecting all of the data – is it a funding question? In any case, in the UK, charities number 35% of the wider non-profit sector.

Which brings us to Ireland. Our population is very similar to New Zealand at 4.8m people. We know from the Benefacts database that we have 29,000 thousand non-profits and counting, and we know from the Charities Regulator that the most recent publicly available figure for the number of registered charities – from November 2017 – is 8,862 registered charities. This puts us in around the same proportion as the UK in terms of the ratio of charities to non-profits.

So what does all of that mean? I’m not a statistician, but I’m interested in the profile of non-profits and charities in countries similar to ours around the world and I’ve made a study of regulatory regimes for charity internationally. One of the things I’m curious about is density of non-profits in different jurisdictions. So to compare the small number of examples I’ve just given, New Zealand comes best out of this analysis. For every 100 people in New Zealand there are almost 2.5 nonprofits. Australia is about the same, but their data is less reliable because it’s based on estimates. In Canada, based on the available data (which as we know excludes all of the unincorporated non-profits), it’s only half a non-profit for every individual – so the number might grow to 1 per 100 people if we added those in. The UK proportion of non-profits is almost 1.5 for every 100 people, and then we come to Ireland, using the new figures supplied by Benefacts today, we are just over half a nonprofit for every 100 people in the country. And if that is not your lived experience, if you think you come into contact with more non-profits, we need to make sure that the data gets into the Benefacts database.

So here’s my parting thought. When we think of non-profits in the broader sense, most are a product of the engagement of individual citizens and their voluntary contributions of time and money. In many ways – that outcome, that product – is what makes us who we are; the culture and the vibrancy of our non-profit community is what makes us Irish. It is the civic glue that sticks us together as a country. So if we can fill the gaps in our understanding of the entire non-profit sector and not just registered charities, if we can better understand our society in terms of the jigsaw pieces that make up the third sector in Ireland, we are going to be able to make better policy choices for the future.

If you read Benefacts 2018 sector analysis report you’ll see that Patricia Quinn estimates that the 29,000 non-profits she and her team have identified will grow potentially to 40,000, when all of the locally-based organisations have been registered on their local public participation networks and included on the Benefacts database. And if Patricia has read the crystal ball correctly, our numbers change dramatically, because Ireland’s cohort of non-profits will be shown to be closer to 1 non-profit for every 100 people in the country. That looks far healthier relative to our international peers, and it demonstrates why Benefacts’ analysis is such an important project in terms of our understanding of the third sector in Ireland.