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Global Economic Role of the Third Sector Revealed


7 November 2007 at 2:01 pm
Staff Reporter
The civil society sector contributes as much to the gross domestic product in a wide range of countries including Australia as do the construction and finance industries, and double the utilities industries according to a Johns Hopkins University report released at the first "Global Assembly on Measuring Civil Society and Volunteering" in Bonn, Germany.

Staff Reporter | 7 November 2007 at 2:01 pm


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Global Economic Role of the Third Sector Revealed
7 November 2007 at 2:01 pm

The civil society sector contributes as much to the gross domestic product in a wide range of countries including Australia as do the construction and finance industries, and double the utilities industries according to a Johns Hopkins University report released at the first "Global Assembly on Measuring Civil Society and Volunteering" in Bonn, Germany.

The findings emerge from data generated by official statistical agencies in eight countries that are the first to implement new guidelines contained in the United Nations Handbook on Nonprofit Institutions.

These guidelines call on statistical agencies, for the first time, to pull together data on Not for Profit institutions that up to now have been scattered in official statistics, and to estimate as well the value of volunteer work.

Report author and director of the Johns Hopkins Center for Civil Society Studies, Lester Salamon says there is now an officially sanctioned method for capturing the economic scale and importance of civil society and volunteering around the world, revealing that this set of organisations is far more important than ever realized.

According to this report, the civil society sector, comprising private, Not for Profit hospitals, schools, social service agencies, symphonies, environmental groups, and many others, accounts on average for 5 percent of the GDP in the countries covered, and reaches over 7 percent in some countries, such as Canada and the United States.

By comparison, the utilities industry in these same countries accounts on average for only 2.3 percent of GDP, the construction industry for 5.1 percent, and the financial intermediation industry embracing banks, insurance companies, and financial services firms, for 5.6 percent.

Other findings in this report, which covers Australia, Belgium, Canada, the Czech Republic, France, Japan, New Zealand and the United States, include:

– For the five countries on which historical data are available (Belgium, Canada, the Czech Republic, Japan and the United States), NFPs have recently been growing at an average rate that is twice the growth rate of GDP (8.1 percent per year vs. 4.1 percent);

– NFPs account for the lion’s share of value added in many critical human service fields. In Belgium, for example, they provide more than 40 percent of the value added in health and more than two-thirds of the value added in social services;

– Health and education account, on average, for 60 percent of the economic contribution of NFPs, though this varies widely by country;

– Philanthropy, including volunteering, generates at most only about one-third of NFP revenue. The balance comes from government and fees;

– Within philanthropy, gifts of time (i.e. volunteering) outdistance gifts of cash by almost two to one;

– Volunteer work accounts, on average, for about one-quarter of the economic contribution of NFPs, though this reaches 50 percent in New Zealand.

The activities on most of the NFP organisations concentrated in the fields of health, education and social services, each showing a great deal of variation in the contribution to ‘value added’.

In Australia the report quotes figures showing Culture and Recreation at 23.1%, Education and Research at 24.7%, Health at 12%, Social Services at 24.5% and "other" at 18.5%.

By comparison in Japan 45% of the NFP contribution to GDP is in health care.

The report was released at the "Global Assembly on Measuring Civil Society and Volunteering" its author saying the result will boost significantly the visibility and credibility of NFP institutions and permit more coherent public and private policies towards them.

The full text of the report "Measuring Civil Society and Volunteering: Initial Findings from Implementation of the U.N. Handbook on Nonprofit Institutions" is available at http://www.jhu.edu/ccss .



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