What is the Charitable and Nonprofit Sector?
Most Canadians have likely engaged with a charity or nonprofit at some point in their lives and many engage with them daily. The charitable and nonprofit sector includes small community service organizations as well as large hospitals and universities. 1
Quick Facts about the Sector:
- There are over 170,000 charitable and nonprofit organizations in Canada. 1
- 85,000 of these are registered charities (recognized by the Canada Revenue Agency).
- The charitable and nonprofit sector contributes an average of 8.1% of total Canadian GDP, more than the retail trade industry and close to the value of the mining, oil and gas extraction industry 2
- Two million Canadians are employed in the charitable and nonprofit sector 1
- Over 13 million people volunteer for charities and nonprofits.
All charities are nonprofits, but not all nonprofits are charities (to learn more about the difference see our page “Starting an Organization”). Organizations wishing to be recognized as registered charities must apply to CRA, which will look at their purposes and determine if they meet the requirements.
What makes a Charity a Charity?
The charitable sector is regulated by the Canada Revenue Agency (CRA), that grants charitable registrations to organizations that operate exclusively for charitable purposes. Learn more about what is and isn't considered a charitable purpose in our Charity Tax Tools section.
Contribution to Canada's Economy
The charitable and nonprofit sector contributes an average of 8.1% of total Canadian GDP as a whole (this is greater than the retail trade industry and close to the value of the mining, oil and gas extraction industry). 2 The "core nonprofit sector" is a common way to refer to charitable and nonprofit organizations that are not hospitals and universities. These organizations' revenues account for about 2.4% of Canada’s GDP, more than three times that of the motor vehicle industry. Charities and nonprofits are funded by various sources including: earned income from the sale of products and services, individual or corporate donations, and government funding and foundation grants.
Many assume that charities and nonprofits are funded mostly by government sources. This is not universally the case. Some organizations receive no funding from any government source. Sales of goods and services account for 45.1% of total income for the core nonprofit sector.
Hospitals, universities and colleges, are the exception to this rule. Almost 75% of their funding comes from governmental sources and 72% of that is from provincial governments. In number these institutions only represent 1% of organizations, but they represent about 66% of the total revenues of the entire sector.
Funding sources for Charities and Nonprofits
The Satellite Account of Nonprofit Institutions and Volunteering published by Statistics Canada in 2009 shows the sources of revenue for the core nonprofit sector:
- sales of goods and services account for 45.6% of total income
- government funding at 20.9%
- membership fees 17.1%
- donations from households 11.2%
- investment income 3.6%.
Charities play an essential role in communities across Canada, providing expertise and support to every aspect of our lives, such as healthcare, education, alleviation of poverty and the environment, among many others. Just as importantly, charities contribute to Canada’s public policy process. Great outcomes have been achieved when charities and governments work together - examples include drunk driving legislation and smoke-free workplaces.
Imagine Canada’s Research Note (Lasby, 2012) shows that Canadians regularly engage with charities:
- Canadians annually donate $10.6 billion dollars to charities and nonprofits (2010 survey figure).
- 12.5 million Canadians volunteer in 2010, almost half the population aged 15 years and over.
- These volunteers contributed 2.1 billion volunteer hours, translating to 1.1 million full-time jobs
Search for individual charities by
Imagine Canada’s Charity Focus provides an easy search interface to find any registered charity either by name, community or area of interest.
Further Reading and Major Studies
Imagine Canada's recent Research Bulletin Trends in Individual Donations: 1984-2010 shows the trends in donations by Canadians over the past 26 years.
The Sector Monitor report series by Imagine Canada highlights the state of Canadian charities and social trends that impact their operations.
These two major studies are still the most comprehensive studies to provide detailed statistics on the charitable and nonprofit sector:
- National Survey of Nonprofit and Voluntary Organizations (Hall et al., 2004).
- Satellite Account of Nonprofit Institutions and Volunteering (Statistics Canada, 2009)