New light on charity sector's significance and scale

(05 Jun 2016)

The recent launch of the Benefacts database (www.benefacts.ie), following the establishment of the Charities Regulatory Authority (CRA), has thrust a fresh light on the not-for-profit sector in Ireland. The public and private sectors of the economy are well researched and commented on but the not-for-profit sector is not well understood.

The scope of the sector ranges from schools to sports clubs, hospitals to universities, international development organisations to church bodies, and political parties to chambers of commerce. In essence the not-for-profit sector consists of any organisation separate from Government, which is not privately owned, is self-governing and where participation is voluntary. This definition, widely used internationally, is beyond what is generally understood to be charitable and encompasses entities that fall outside the remit of the new Charities Regulator. 

Using this wider definition, the sector is significant in scale. Benefacts has already listed 18,591 organisations in the sector and as more are identified by the Regulator this number will rise significantly. For instance, Benefacts lists 3,084 sports organisations from those registered with Revenue. A full listing of all sporting clubs is estimated to exceed 12,000. In time these gaps will be closed and when the dust settles, the total number of not-for-profit organisations will exceed 25,000. 

In research conducted in 1999 by John Hopkins University, the sector’s value was estimated at 9.3 per cent of GNP. In 2013, in research conducted by 2into3, a similar figure of 9.1 per cent of GNP emerged or €12.4 billion in total income. At first glance this seems at variance with the €7.1 billion figure listed by Benefacts but makes sense when it becomes clear that this database of 18,591 incorporates financial data for only 42 per cent of these organisations. In time more comprehensive financial data will become available and a more accurate figure will emerge, which is likely to exceed €12.4 billion.

Assessing how many are employed by not-for-profit organisations is even more challenging. The aforementioned John Hopkins study estimated that 8.28 per cent of the economically active population worked in the sector in 1999. A similar percentage today would be circa 179,000. This is greater than the 108,128 currently cited by Benefacts, again due to it holding figures for only 42 per cent of organisations. Actual employment could exceed 180,000.

The establishment of the Regulator and the launch of Benefacts are essential steps towards a full understanding of a sector that plays such an important part in our economy and society. The data Benefacts will provide in the future will inform better decision making by government, by organisations, by those the sector serves and by the public.  
     
Dennis O’Connor is director of 2into3 which provides consulting, recruitment and research services to Ireland’s not-for-profit sector.

 

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