Benefacts fifth Nonprofit Sector Analysis Report
Patricia Quinn, CEO
In preparing for the launch of our fifth annual report on the nonprofit sector in Ireland, we asked around for ideas about what might catch people’s interest. “Try to find a handful of salient facts that wouldn’t be available if Benefacts didn’t exist” was one helpful suggestion. The problem is selecting the handful, because in fact without Benefacts, none of the data or analysis in this or our other reports would be available at all.
Since 2015 Benefacts has been cataloguing and classifying Ireland’s 34,000 nonprofits, and – with financial support from our philanthropic donors – providing a free public report with an annual snapshot from our database of macro trends in the sector.
Thanks to these reports, a sector that previously was hidden in plain view has been made legible to the general public. Using full population data – not samples or surveys – and without requiring any input from the nonprofits concerned, we have documented the numbers of people involved as paid employees (165,000 at the latest count), or as directors or charity trustees (nearly 100,000). We have analysed income from the State, from philanthropies and from charitable giving by individuals.
A social economy
Ireland’s nonprofit sector can be seen in a wider European context. The European Commission defines the social economy as that group of 2 million organisations – 10% of all businesses in the EU – whose profits are defined in terms of public rather than private goods.
More than 11 million people – about 6% of workers in the EU – are employed by social economy enterprises. We don’t yet have a reliable analysis of all social enterprises in Ireland (not all are incorporated as nonprofits) but our numbers show that Irish people working for nonprofits represent at least 7% of the workforce – incidentally, among the lowest paid employees in the economy.
Within the economy at large 14.6% of people are highly paid.
Within the nonprofit sector 1% of people are highly paid.
Without Benefacts, there would be no reliable way of setting Ireland in this wider context, whether by means of our own analysis, the quarterly digital updates of otherwise inaccessible data that we provide to the CSO to assist them in the preparation of the National Accounts, or via the datasets that we update daily on the Irish Government’s Open Data Portal https://data.gov.ie/
Thanks to EU-led reforms in public disclosure, public data harvested from sources forms the raw materials from which we build our database and produce our reports. In fact these regulations are soon to be dramatically ramped up with the integration into Irish law of the EU Open Data Directive. As a result of these reforms, there is now a well-established public interest principle that unless there is a compelling reason to withhold it, public information should be readily – i.e. digitally – accessible and reusable.
As a result of these policy and regulatory advances, we have been able to make significant strides in achieving our goal of making the work of Irish nonprofits more legible and transparent.
Evidence-based decisions
A second goal in producing these reports was to demonstrate the availability of data to help the nonprofit sector and its stakeholders to enhance their business processes – decision-making, fund-raising, advocacy, collaboration with others.
It seems to be working. In the 15 months since we produced last year’s nonprofit sector report, we have provided bespoke analysis reports or data services for 17 charities, 11 sector lead bodies, 8 government departments or agencies, 3 philanthropies or payroll giving schemes, and 5 private firms or academic researchers.
Andrew Hetherington
Chief Executive, Business to Arts
At Business to Arts we work with donors in a variety of ways: through donor advised funds, on corporate social responsibility campaigns for different companies, and with the artists and arts organisations that are at the heart of each of our programmes.
The value of Benefacts to us is that its data and analysis informs our strategy and our capacity-building activities, as well as helping to verify and enhance our own research work.
Our research tells us that there are certain things that are fundamental to fundraising success in the arts, and some of these are things that Benefacts reports help us to identify. First, full time employee numbers. Our analysis is that even in a very small arts or culture nonprofit, the organization structure must have at least three people if there is to be a sustainable fundraising position. Also it’s clear that registered charity status including tax status for donations will help significantly as nonprofits move towards a more professionalized structure – both in the nonprofit sector as a whole, and in the arts.
The other value of Benefacts reports for us is in staff induction. In the next month, Business to Arts will be seeking another two national profile organisations to take part in our fundraising fellowship program. When they come on board, the first thing they read is the latest Benefacts annual sector analysis report.
In this context, it would be timely to acknowledge successive Ministers for Public Expenditure & Reform – Brendan Howlin TD, Paschal Donohoe TD, Michael McGrath TD – each of whom saw merit in investing in this prototype of transparency and data resources in support of the nonprofit sector.
For them, our goals and values were closely aligned in public policy terms with the administrative reform agenda of successive governments: supporting a robust evidence base for public policy; making €6.2bn of public expenditure more publicly transparent; facilitating data-sharing among notoriously siloed public grant-makers; building the foundations of a more efficient ‘tell-us-once’ bureaucracy for the tens of thousands of transactions annually between the State and citizen-led nonprofits.
While it’s gratifying to see a steady growth in users of our data, including 15,000 people monthly who visit benefacts.ie for information on individual nonprofits, perhaps the biggest contribution of the data to a better-informed public is still in the future. Benefacts 2021 analysis report documents the state of the entire nonprofit sector up to the point immediately before the Covid pandemic struck – with its associated havoc for so many parts of the economy. In 2022 and beyond, our data will provide a critical barometer of what happens next – the impacts on nonprofit organisations, their employees, their revenues, the people and causes they serve.
Joan Curry
Finance Specialist
Although I’m not directly familiar with the nonprofit sector, I have a great interest in financial disclosures especially as they relate to Government including State funding. I’d like to reflect on the wider conversation underway on financial transparency, which Benefacts is part of. This conversation has gained particular traction from a public sector perspective in the last 18 months, especially given the need for an agile public sector response to the Covid emergency. There’s no doubt that the demand for quick access to reliable data has pointed up the need for a consistency in reporting standards and also a growing recognition of the importance of this kind of insight in the public interest.
Looking at Benefacts approach, I am struck by their digital agility, including a high level of joined up thinking in terms of the available data and what’s being presented in the report. On a practical level, I want to commend the transparency of the service in operational terms, which comes through very clearly from the report and the website.
Working in an agile way in the digital space is very definitely the future. The question is how can we expand on and enhance this approach. I think the users of the data, and the value adders who bring other data and insights to bear have a part to play in the future ambition of Benefacts – including especially State funders and other donors. If I reflect on what I believe donors want to see in reports like this one, then I think it must have something to do with creating the link between different kinds of users who have a common interest in promoting an environment, or a culture of trust, transparency, and openness with huge benefits for all.
What’s next for Irish nonprofits?
It is striking that this report, like previous ones, reports modest but steady growth in the last year in the number of organisations forming the social economy: 465 new nonprofit company set-ups, 214 wind-ups in 2020. Employment numbers are up by 3%, comparing like with like. The number of people serving on nonprofit boards has grown by 8%. State support increased (in 2019) albeit principally in additional funding to health and higher education.
Is all this about to change? Will the most fragile nonprofits survive the depredations of the Covid recession or will the recovery lift their little boats along with the bigger ones? Will new social enterprises bring innovative new solutions to the changed ways people want to live and work? Will we see consolidation within the sector, as major service providers rationalise their programmes? Is the noticeable hike in philanthropic giving something that can be converted into a longer-term trend? Will State funding continue to grow, albeit largely to the big charities providing services on behalf of the State? If it contracts, where will the pinch points be?
The data collected, digitised and shared by Benefacts will be the only consistent, reliable source of answers to these questions.
Let’s hope we’re around to deliver it.
Click here to view the launch of this report