chapter

8

Nonprofit Sector

Importance of the Nonprofit Sector to Leisure

• In neighborhoods and communities across North America, millions of people are served by and give service to entities that are for public and quasi-public purposes.

• Nonprofit organizations affect human lives. • Nonprofit organizations operate outside of

government and business apparatuses to improve the quality of life in communities.

Nonprofit Sector in the United States and Canada

• Variations in structure include registration and operations within cultural, political, civic, and economic contexts.

• Variety of descriptions include the following:– Voluntary sector – Charitable sector – Quasi-public sector – Independent sector – Third sector– Civil society sector – Social sector– Nongovernmental sector – Tax-exempt sector– Not-for-profit sector

6 Characteristics of the Nonprofit Sector

1. Organized. Institutional presence and structure; identifiable entity.

2. Private. Institutionally separate from the state; determine their own policies, programs, and services.

3. Not profit distributing. Do not return profits to their managers or to a set of “owners”; consider a range of stakeholders when making decisions and providing services.

4. Self-governing. In control of their own affairs.5. Voluntary. Membership is not legally required, and they attract

some level of voluntary contribution of time and money.6. Beneficial to the public. Contribute to the public purpose and

public good. (Salamon,1999; O’Neill, 2002)

Impact on Leisure Programs

• Nonprofit organizations can include sports clubs, professional associations, and direct service providers.

• They have an impact across the life span from “cradle to grave.”

• Introduction to nonprofit organizations typically occurs through recreation programs as children and youth become involved in the following:– Scouting programs– YMCAs– Boys and Girls Clubs – Little League – Other recreation-based and nature-based programs

Goals and Functions

Two primary goals frame the orientation of most nonprofits (Salamon,1999):

1. Public benefit. Some nonprofits are organized specifically for social outcomes that appeal across a spectrum of population groups.

2. Mutual benefit. These nonprofits exist primarily to provide services exclusively to a limited number of members with common interests.

Organizing Framework

International Classification of Nonprofit Organizations (ICNPO): 12 major activity groups1. Culture and recreation2. Education and research3. Health4. Social services5. Environment6. Development and housing7. Law, advocacy, and politics

(continued)

Organizing Framework (continued)

8. Philanthropic intermediaries and voluntarism

9. International

10. Religion

11. Business and professional associations and unions

12. Groups not classified elsewhere

(Salamon & Anheier, 1996)

Nonprofit Sector in Canada

• “Little [is known] about the nonprofit sector and the role it plays in Canada” (Hall & Banting, 1999).

• No central registry in Canada; what is known comes from charities. Register with Revenue Canada (the government agency similar to the Internal Revenue Service in the United States).

• As of 2000, approximately 200,000 nonprofits were operating in Canada with 80,000 of them registered as official charities (Wagner, Orvananos de Rovzar, & Imdieke, 2003).

4 Categories of Nonprofits in Canada

1. Social welfare assists disadvantaged groups for the common good and for the general welfare of the community.

2. Civic improvement is organized to enhance the value or quality of community or civic life.

3. Pleasure or recreation is organized to provide a state of gratification or a means of refreshment or diversion.

4. The category, any other purpose except profit, is a generic grouping of associations that are organized for other noncommercial reasons (Revenue Canada, 2004).

Nonprofit Sector in the United States

• U.S. nonprofits are pervasive and robust.

• Approximately 1.6 million exist:– 400,000 serve members. – More than 1.2 million serve the public. – The U.S. Internal Revenue Service provides 27

types of tax-exempt organizations under Section 501(c) of the federal tax code.

Major Subcategories of U.S. Nonprofits

• CharitiesProvide free services to vulnerable populations in places such as homeless shelters and soup kitchens

• FoundationsSupport causes that benefit society through grants

• Social welfare organizations Advocate for specific issues by lobbying legislators to advance social causes and campaigning for political candidates

• Professional and trade associations Are a collection of nonprofits that promote business or professional interests

Resource Base

1. Membership fees

2. Program fees

3. Private philanthropy

4. Government grants

5. Interest income

6. Earned income

7. Sales income

8. Social enterprise

Professional Organizations

• Association for Volunteer Administration (AVA) provides training and resources to support volunteer managers.

• Association of Fundraising Professionals (AFP) provides training, research, and support to those involved in fundraising.

Significance of Local Nonprofit Organizations

• They play a critical role in the recreational and cultural life of the United States.

• Many central recreational institutions of local communities—swimming clubs, tennis clubs, Little Leagues, country clubs—are nonprofit in form.

• They form the backbone of the nation’s cultural life, producing most live theater, symphonic music, and opera and providing venues for art and cultural artifacts.

National and Community-Based Nonprofit Recreation Organizations

1. Voluntary youth serving

2. Religious and faith based

3. Social service and relief

4. Special populations serving

5. Environmental and conservation

6. Associations

7. Membership or service clubs and fraternal organizations

Voluntary Youth-Serving Organizations

More than 49 nonprofit youth and human service organizations serve young people across the United States and Canada. These include the following:• Big Brothers Big Sisters• Boy Scouts of America• Scouts Canada• Boys and Girls Clubs• Camp Fire USA• Girl Scouts of the USA• Girls Incorporated• Little League Baseball

Religious and Faith-Based (Church and Synagogue)

Organizations

• Nonsectarian organizations with historical roots in faith-based communities include the following: – YMCA of the USA and YMCA Canada,1851 – YWCA of the USA, 1858, and YWCA Canada, 1870

• Other nonprofits were created and are administered by faith-based and church communities, including the following:– Catholic Youth Organization (CYO)– Young Men’s Hebrew Association (YMHA)– Young Women’s Hebrew Association (YWHA)

Social Service and Relief Organizations

• Provide social and relief services. Difficult to categorize; some are nonsectarian and others are a part of faith communities.

• Improve the quality of life. Bolster goals of recreation service providers or provide direct recreation services themselves.

• Examples include the American Red Cross, founded in 1881, and the Canadian Red Cross, founded in 1909.

Special Populations–Serving Organizations

• United Service Organization (USO), 1941Supports the needs of enlisted military personnel through leisure and recreation

• The Arc of the United States, 1959 Serves children and adults with cognitive, intellectual, and developmental disabilities; 1,000 chapters nationwide

• Special Olympics, 1967Provides year-round sports training and athletic competition in 26 Olympic-type sports

Environmental and Conservation Organizations

• Sierra Club, 1892Purpose is to explore, enjoy, and protect wild places of the earth; to practice and promote responsible use of earth’s ecosystem and resources; to educate and enlist humanity to protect and restore quality of natural and human environment; and to use all lawful means to carry out these objectives; Sierra Club of Canada, founded in 1963.

• The Trust for Public Land (TPL), 1972 Purpose is to conserve land for people to enjoy as parks, gardens, and other natural places, ensuring livable communities for generations to come.

Association

American Camp Association is a diverse community dedicated to enriching the lives of children and adults through the camp experience. • For nearly 100 years, utilized camping as lessons in

community, character building, and skill development.

• Works to preserve, promote, and improve the camp experience.

Membership or Services Clubs and Fraternal Organizations

• Service clubs and fraternal organizations are part of the recreation and leisure services for two reasons: – Many support parks and recreation programs

through donations of time and money. – Provide a personal and professional development

networking opportunity for the recreation professional who becomes a member.

• Two of the better known service clubs are Kiwanis International and Rotary International.

Professional in Nonprofit Organizations

• About 6% of all organizational entities in the United States are nonprofits, and 1 in 15 people works for one (Salamon, 1999).

• The national organization Action Without Borders (www.idealist.org) provides career guidance and posts job openings.

• Trade publications such as Nonprofit Times and the Chronicle of Philanthropy are helpful tools in pursing careers in the nonprofit sector.

Challenges and Opportunities for the Future

• Challenges and opportunities:– Effect of commercialization– Changing shape of government and nonprofit relations, public

trust issues– Changing demographics

• Direct implications for nonprofit recreation and leisure service providers: – Trust and accountability – Opportunity for collaboration in response to marketplace

challenges – Demographic challenges and opportunities

Successful Nonprofit Managers

• Those who will be or are skillful across a range of competencies

• People with the ability to raise philanthropic resources

• People with the ability to work with and through volunteers to achieve organizational goals

Discussion: Subject: Trends

• Which of the following trends will most affect the future of nonprofits? – Commercialization – The changing shape of government and nonprofit

relations – Public trust issues – Changing demographics

Individual Assignment: Design Your Own Nonprofit and submit it on-line

A nonprofit organization (NPO) is defined as “an association [that] must be both organized and operated exclusively for social welfare, civic improvement, pleasure or recreation or for any other purpose except profit” (Revenue Canada, 2004).

• Create a nonprofit organization using the following questions as guidelines: – What is the vision or mission statement of your organization? – What are your funding sources or resource base? – What are your staffing needs? – What facilities or sites will you need and in what jurisdiction? – What are the demographics (population, cultural ,and sociological) of your catchment’s area? – Which of the four categories of nonprofits does your organization fall under? See chapter 8 in the text for

a description of this area.

• Reference Material - Descriptions of the four categories of nonprofits:– Social welfare nonprofits assist disadvantaged groups for the common good and for the general welfare

of the community. – Civic improvement nonprofits enhance the value or quality of community or civic life. – Pleasure or recreation nonprofits provide a state of gratification or a means of refreshment or diversion. – Any other purpose except profit is a generic grouping of associations that are organized for other

noncommercial reasons.