Putting the non-profit sector and volunteering on the economic map.

LESTER M. SALAMON is a professor at The Johns Hopkins University and Director of the Johns Hopkins Center for Civil Society Studies. As a pioneer in the empirical study of the non-profit sector in the United States and more recently throughout the world, his 1982 book, The Federal Budget and the Nonprofit Sector, was the first to document the scale of the American non-profit sector and the extent of government support to it. Mr. Salamon has extended this analysis to the international sphere, producing the first comparative empirical assessment ever undertaken of the size, structure, financing and role of the non-profit sector at the global level. The initial results of this work were published in his 1994 book, The Emerging Sector, and in two subsequent volumes of Global Civil Society. Based on this work, Mr. Salamon led the team that helped the United Nations Statistics Division prepare the new UN Handbook on Nonprofit Institutions in the System of National Accounts (NPI Handbook).

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Mr. Salamon spoke with Robert Leigh of the United Nations Volunteers (UNV) Programme.

The Johns Hopkins Center and the UN Statistics Division have partnered to develop the first NPI Handbook. What prompted this partnership and what is the goal of the NPI Handbook?

The goal of the NPI Handbook is to bring non-profit organizations and volunteering out of the shadows to which they have been consigned in official economic statistics. Under the System of National Accounts, which guides the collection and reporting of economic data around the world, these organizations are allocated among different economic sectors based on their principal source of income. Since fees and government support are the major sources of non-profit revenue in most countries, the majority of the economic activity of non-profits gets lumped together in existing statistics with that of corporations or Governments. In addition, the official statistics do not capture volunteer labour at all. As a result, the non-profits and volunteering are largely invisible in existing economic statistics, making it virtually impossible to gain a true understanding of the scope and scale of this increasingly important set of organizations and the volunteer effort that helps to support their work.

The NPI Handbook was developed to overcome this problem and provide a more accurate view of the economic and social importance of the non-profit sector and volunteering. The UN Statistics Division agreed to partner with us in its development after we presented evidence from research work we had with local partners in more than 30 countries around the world--from Argentina to Australia, from France to the Philippines. This work demonstrated what many people already suspected: that non-profit organizations and volunteering constitute a massive economic force, making far more significant contributions to the solution of public problems than existing official statistics suggest. In response, the Statistics Division agreed to organize an experts committee to consider how to capture non-profit institutions and volunteering more effectively in national income data systems. It invited us to serve as the technical staff to this Committee.

Why is a better economic understanding of the non-profit sector necessary?

Increasingly, the global community has come to recognize that progress in achieving the Millennium Development Goals and solving the serious social and economic problems that plague our communities will require more than government action alone. Also critical will be the ingenuity and initiative of the world's growing non-profit sector and the millions of volunteers it can help mobilize. They have the ability to extend the Government's reach, engage grass-roots energies, build cross-sector partnerships and reinvigorate democratic governance. Without solid information, however, it is difficult to generate the interest and attention that the sector needs to make its contribution. To an increasing extent, what is not counted does not seem to count. Solid data on the scale, composition, financing and role of non-profit institutions and volunteering can thus help bring this important resource to the attention of policymakers, the media, the business community and the public at large. This can, in turn, help policymakers design more effective policy, stimulate greater public involvement and support, promote more favourable policies and thereby increase the contribution that the non-profits make in addressing social, economic and environmental problems and enhancing democratic practice.

What are the key changes to the System of National Accounts that the NPI Handbook proposes?

The NPI Handbook calls on countries to make two major changes to their current national income work. First, to identify the non-profit institutions now buried in other economic sectors and publish regular "satellite accounts", which pull together all the data on them in one place. Second, it requires them to estimate the value of volunteer work and report this in the satellite account picture of the non-profit sector as well. Since there is reason to believe that existing records fail to include many non-profit institutions and little data are collected on volunteering, these steps will require some significant updating of the existing listings and the introduction of survey modules to capture the extent of volunteering.

Utilizing the System of National Accounts (SNA) as the vehicle to generate these data has a number of advantages. For one thing, national accounts statistics are already supposed to cover non-profit institutions, even though they split them among several different sectors. The new NPI Handbook offers suggestions on how to carry out a responsibility that national accounts statisticians already have. In addition, the National Accounts data system has enormous credibility, and policymakers regularly rely on it for their picture of other facets of the economy. Finally, this system is already in place, firmly institutionalized and is staffed with thousands of competent professionals in countries around the world. Incorporating a procedure for regularly producing more explicit data on the non-profit sector and volunteering within the System thus increases the chances that such data will be produced regularly and that the resulting information will be credible and consistent with other aspects of economic life. At the same time, it is important to recognize that SNA is a consensus system. Countries are encouraged but are not required to abide by its guidelines. Thus, implementation of the NPI Handbook at the country level is by no means automatic; rather, it will require continuous encouragement and support.

What kind of information will satellite accounts yield that was not available before?

The NPI Handbook promises to revolutionize the availability of reliable data on non-profit institutions and volunteering around the world. In addition to the data on non-profit employment, overall expenditures and sources of revenue that have been generated through the Johns Hopkins Comparative Nonprofit Sector Project, the NPI Handbook will yield regular data on non-profit assets, the composition of expenditures and the value added by nonprofit institutions, both overall and by different fields, such as health, education, social services, arts and culture. It will also provide the first official statistics on the extent, value and distribution of volunteer labour, making it possible to chart the growth and the changing composition of civil society organizations and volunteering, and to compute the civil society's contribution to a country's gross domestic product (GDP) and the output in particular fields. This will help government officials target policies toward the civil society sector and highlight areas where partnerships may be possible. It will also provide a solid basis for attracting attention to the role that civil society and volunteering play, and a foundation for policies to enhance this role.

What kind of information is emerging so far that we were not privy to before, particularly on the extent and value of volunteering?

Fortunately, 26 countries have already committed to implementing the NPI Handbook. This includes Argentina, Australia, Belgium, Brazil, Cameroon, Canada, Czech Republic, France, Ghana, India, Israel, Italy, Japan, Kenya, Kyrgyzstan, Mali, Morocco, New Zealand, Peru, Philippines, Republic of Korea, Slovakia, South Africa, Uganda, United States and Zimbabwe. In addition, nine countries have already issued at least a first non-profit institution "satellite account", and six of these include data on volunteering. The findings revealed in these initial satellite accounts are quite striking. They show:

* The Belgian NPI sector is five and a half times larger than what was formerly visible in existing national data systems once the numerous non-profit health, social work and related organizations allocated to the corporations sector are included;

* Canada's NPIs account for nearly 8 per cent of the country's GDP, of which about a quarter represents the contribution of volunteers. In fact, the economic contribution of volunteers alone in Canada is as large as that of the entire agricultural sector. Even without volunteers, the GDP contribution of Canadian NPIs exceeds that of agriculture, mining, oil and gas extraction, retail trade, accommodations and food service, and motor vehicle manufacturing sectors;

* The contribution of the NPI sector in Australia to the country's economy exceeded that of the electricity, gas and water supply, hotel accommodations and restaurants, and the communications industries;

* In the fields in which they operate, the economic importance of non-profit institutions is even greater: in Belgium, NPIs account for 67 per cent of all value added in social services and 43 per cent in health;

* The non-profit institutions sector is quite dynamic, exceeding the overall growth of the economy in many countries. Thus, between 2000 and 2003, the sector's average annual rate of growth in Belgium outdistanced that of the overall economy by a factor of 2:1 (6.7 versus 3.2 per cent). In the United States, between 1996 and 2004, the non-profit sector grew at a rate that was 20 per cent faster than the overall GDP.

Countries are not required to follow the UN Statistics Division's guidelines. How are you addressing this challenge?

To encourage implementation of the NPI Handbook in an initial target of 30 countries, the Statistics Division authorized the Johns Hopkins Center to undertake a significant mobilization, dissemination and technical assistance campaign. Fortunately, the Center was able to forge a partnership with UNV in this effort in a number of countries and also enlist support from other institutions, including the UN Economic Commissions for Latin America, Asia and Africa, and the Statistics Division of the Organization for Economic Cooperation and Development. Working with these institutional partners, the Center has organized a series of regional briefings to introduce the NPI Handbook to statisticians, stakeholders and policymakers, conducted follow-up briefings and discussions to secure implementation commitments in a group of target countries, and followed up with training workshops with implementers once countries have agreed to participate.

To help defray the local costs of this work in some developing countries, UNV underwrites the costs of recruiting statistical volunteers--in Brazil, Kenya, Morocco, Mali, Mozambique, South Africa, the Philippines, India and Kyrgyzstan. In addition, the Kellogg and Sasakawa Peace Foundations have committed resources to cover some costs in Latin America and Asia, respectively. Other support for the overall implementation effort has been provided by the Ford and Skoll Foundations.

The implementation process includes the assignment of UNV volunteers to national statistical offices in nine countries. What have these assignments yielded so far?

UNV statistical volunteers are currently working in three countries, and three additional States are now in the recruitment process. These have proved immensely helpful to statistical authorities in carrying out the initial tasks involved in the implementation of the NPI Handbook. In Brazil, UNV has made significant headway in compiling the first-ever Brazilian satellite account on non-profit institutions, and preliminary findings are scheduled for release shortly. In the Philippines and Kenya, UNV volunteers have taken on the arduous job of cross-checking official and unofficial registries of non-profit institutions against national accounts data systems, in order to make sure that these systems embrace all the entities that satisfy the NPI Handbook definition of a non-profit institution. UNV volunteers and programme officers have also been helpful in mobilizing country support for the NPI Handbook and in keeping the UN system at the country level informed.

What do you hope to see happen in the next five years? What are the key benchmarks you hope to have reached by then?

If all goes as I hope, the next five years will witness the following major developments: (a) 30 countries will have produced at least a preliminary version of the NPI satellite account, and 12 of them will have produced at least one update; (b) based on the initial results of this work, an additional 10 countries will have begun the process of implementing the NPI Handbook; (c) a basic survey module for capturing volunteer work will have been endorsed by the International Labour Organization and integrated into labour force surveys in at least ten countries; (d) a Civil Society Information Network (CiviNet) will have been formed to link research units interested in the scope and structure of the non-profit sector internationally and provide access to the NPI satellite account results; (e) the initial results of the implementation of the NPI Handbook will have been published; (f) civil society leaders in the 30 target countries will have absorbed the data in the NPI satellite accounts on their countries and begun to use them in their capacity-building and advocacy efforts; (g) the media, the business community and Government will evidence a new appreciation of the importance of non-profit organizations in a significant share of the target countries and make use of the results in their own work; (h) and an NPI Handbook implementation fund will have been established to help finance the implementation work in local areas.

Robert Leigh is Senior Policy Specialist and head of Research and Development Unit at UNV. He has worked in several UNDP country offices in Latin America and is the author of several articles on aspects of volunteerism for development.

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