Nonprofit organizations traditionally function as interdependent entities. The diverse types of nonprofits are also a major component of society as well as the economy at large.
Canadian NGOs have contributed to addressing the societal, cultural and economic issues of the nation. Hence, these nonprofit entities pride themselves in their deep philanthropic roots.
Generally, Canada’s nonprofit sector growth can be attributed to various factors. This includes the country’s overall economic development, increasing population, the evolution of societal, economic and health services, and its citizen’s engagement in civil society.
In this article, we will expound on the various types of nonprofits in Canada and the sector’s growth.
- Canada’s NGO sector has over 170,000 nonprofits and charities
- Women comprise a large number of the nonprofit’s workforce in the country
- Also, nonprofit entities contribute $192 billion to the nation’s economy
What are the types of nonprofits in Canada?
Nonprofits in Canada generally describe organizations that fall into one of these three groups:
1. Registered Charity:
These types of nonprofits are different from not-for-profit corporations. They include charitable organizations, public foundations, and private foundations. These nonprofit entities must be registered with the Canada Revenue Agency. A registered charity is given tax exemptions. Also, they can issue tax receipts for acquired donations.
There are rules governing these types of nonprofits. A registered charity must be established and resident in Canada, must function as a charitable organization, and apply its resources to charitable activities.
These types of nonprofits are known to distribute funds to authorized donees. Canadian foundations may also offer grants to other charities or function as a funding organization for another charity. Also, they may choose to perform their own charitable works.
3. Nonprofit corporation:
These types of nonprofits are incorporated as legal entities distinct from their directors and members. However, not all nonprofit corporations register as a charity with the Canada Revenue Agency. Although these nonprofit entities are allowed to earn profits, all earnings must be employed in promoting the goals of the organizations. Also, none of these earnings can be distributed to members, shareholders or directors.
Nonprofit corporations are preferable for organizations that intend to be partially charitable.
How many nonprofit organizations are in Canada?
Imagine Canada reported that the NGO sector has over 170,000 nonprofits and charities. The several types of nonprofits in the country have contributed to addressing social and environmental issues.
The sector has also created employment for millions of citizens thereby contributing to the nation’s economy. Nonprofits account for over 8.3% of the country’s GDP and employ 2.4 million people. The employment rate is said to surpass that of the mining, agriculture, oil and gas, retail and transportation sectors.
Nonprofit entities also contribute $192 billion to the nation’s economy. Women comprise a large number of the sector’s workforce in the country.
Canada’s nonprofit primarily comprises college and university graduates. They represent nearly 65% of total employees in the sector.
Canadian NGOs are a significant part of the nation’s economy. Their impact has contributed to improving the well-being of its citizens. The unquestionable act of charity by Canadians cannot be denied. However, more can be done to improve the way of giving to embrace millennials and Gen Z. These age groups respond to charitable acts in a much different way.
The various types of nonprofits in the country must create effective systems for online giving. The medium by which this is also communicated is key in ensuring the success of the sector. Organizations must explore ways to meet the changing attitudes and preferences of the evolving community to thrive in the 21st century.
The nonprofit sector now more than ever will require useful and adequate data alongside effective digital strategies to encourage future giving.
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