University of Strathclyde, Glasgow 10 GREAT MYTHS OF GLOBAL CIVIL SOCIETY Lester M. Salamon Johns Hopkins University and Russia’s Higher School of Economics University of Strathclyde, Glasgow October 13, 2014 © Lester M. Salmon, 2014

10 Great Myths of Global Civil Society There is no such thing as a civil society or nonprofit “sector.”

The Global Associational Revolution FOR-PROFIT SECTOR GOVERNMENT SECTOR CIVIL SOCIETY SECTOR

A. IS THERE SUCH A THING AS A NONPROFIT SECTOR? Is there such a thing as the Nonprofit Sector TOPIC II: WHAT IS THE NONPROFIT SECTOR AND WHY DO WE HAVE IT? A. IS THERE SUCH A THING AS A NONPROFIT SECTOR? 1) Terminological Confusion Independent sector Voluntary sector Civil society sector Charitable sector Noncommercial sector Public-benefit sector Nongovernmental sector Social economy sector Johns Hopkins Center for Civil Society Studies

Is there such a thing as a “nonprofit sector” TOPIC II: WHAT IS THE NONPROFIT SECTOR AND WHY DO WE HAVE IT? 1)Terminological Confusion 2) Organizational Diversity Political parties Schools Museums Trade unions Universities Nursing homes Foundations Homeowner organizations NGOs Religious congregations Professional associations Environmental Cooperatives groups Business associations Hospitals Social srvc orgs Johns Hopkins Center for Civil Society Studies

SECTORS OF THE SNA SYSTEM TYPE OF INSTITUTIONAL UNIT Treatment Of Nonprofit Institutions In The SNA SECTORS OF THE SNA SYSTEM NPISH sector S.15 Households S.14 General government S.13 Nonfinancial corporations S.11 TYPE OF INSTITUTIONAL UNIT Financial S.12 C1 Corporations C2 G Government units H Households Nonprofit institutions (NPI) N1 N2 N3 N4 N5

Who we are Our metaphor

CNP PROJECT COUNTRIES Kenya Israel Pakistan Australia Belgium Italy Slovakia Germany United Kingdom Denmark France Sweden Norway The Netherlands Finland Austria Switzerland Czech Republic Poland Romania Russia Hungary United States Mexico Colombia Brazil Chile Canada Uganda Argentina South Africa Peru Tanzania Ghana Lebanon India Thailand New Zealand Morocco Portugal Spain Ireland Egypt Japan Korea The Philippines Turkey

Common features of Nonprofits Organizations Private—institutionally separate from government Non-profit-distributing Self-governing Noncompulsory

Personal social services Museums Hospitals Trade associations Universities Environmental groups Clinics Human rights organizations Professional Sports clubs Day care centers Foundations Personal social services

10 Great Myths of Global Civil Society There is no such thing as a civil society or nonprofit “sector.” The civil society sector is mostly engaged in provision of services.

Why do we have a nonprofit sector? IS A NONPROFIT SECTOR NEEDED? WHY? Market Failure/Government Failure Contract Failure: The Trust Theory Supply-side theories Johns Hopkins Center for Civil Society Studies

Why do we have a nonprofit sector Service provision Advocacy Expression Community-building / social capital Value guardian / mobilization Source: Lester M. Salamon, The State of Nonprofit America (Washington, D.C.: The Brookings Institution Press, 2002)

10 Great Myths of Global Civil Society There is no such thing as a civil society or nonprofit “sector.” The civil society sector is mostly engaged in provision of services. The civil society sector is a marginal actor economically.

CNP PROJECT COUNTRIES Kenya Israel Pakistan Australia Belgium Italy Slovakia Germany United Kingdom Denmark France Sweden Norway The Netherlands Finland Austria Switzerland Czech Republic Poland Romania Russia Hungary United States Mexico Colombia Brazil Chile Canada Uganda Argentina South Africa Peru Tanzania Ghana Lebanon India Thailand New Zealand Morocco Portugal Spain Ireland Egypt Japan Korea The Philippines Turkey

Global Civil Society, Volume 2

The Scale of Nonprofit Activity, 40 Countries 48.4 million full time equivalent jobs 4.6% of economically active population

Non-profit sector revenue (41 countries) vs. 12 largest economies, 2012 *Estimated Data sources: GDP - World Bank; Nonprofit revenue - JHU/CCSS

Employment in npis vs. Largest Firms, 37 Countries CIVIL SOCIETY ORGANIZATIONS* 48 MILLION LARGEST PRIVATE COMPANIES 4 MILLION * Including volunteers and religious worship organization workforce, where available.

10 Great Myths of Global Civil Society There is no such thing as a civil society or nonprofit “sector.” The civil society sector is mostly engaged in provision of services. The civil society sector is a marginal actor economically. Civil society organizations are chiefly an American phenomenon and are far less in evidence in other countries. There is no civil society sector for all intents and purposes in the Scandinavian countries, where the welfare state is most fully developed.

U.S. NONPROFITS: A MAJOR ECONOMIC FORCE Source: Johns Hopkins Nonprofit Employment Data Project, 2003

Nonprofit workforce as a share of Economically active population, by country

Nonprofit workforce as a share of Economically active population, by country

UN Handbook on NonProfit Institutions

GLOBAL CIVIL SOCIETY & VOLUNTEERING: LATEST UN NONPROFIT HANDBOOK FINDINGS ON 16 COUNTRIES

Who we are NPI contribution to gdp, Employment in npis vs. Largest Firms, 37 Countries NPI contribution to gdp, Including Volunteers, by country, 2003 Who we are 0.8% 1.7% 2.0% 2.2% 2.8% 1.9% 3.3% 3.6% 4.2% 5.1% 5.5% 6.6% 6.7% 0.6% 2.7% 1.4% 1.3% 1.1% 2.5% 0.7% 1.0% 0.4% 0.9% 1.6% 2.3% 3.4% 4.6% 4.7% 4.9% 5.2% 5.3% 5.8% 7.1% 4.5% Thailand Czech Republic Portugal Mexico Kyrgyzstan Brazil Norway France Australia Japan New Zealand Belgium United States Mozambique Israel 16-country average PERCENT OF GDP PAID WORKERS VOLUNTEERS 7.1% 1.0% 8.1% Canada Source: The State of Global Civil Society and Volunteering: Latest findings from the implementation of the UN Nonprofit Handbook. (Johns Hopkins Center for Civil Society Studies, 2013).

Contribution to GDP, NPI vs. Other Industries, 8-Country Average ELECTRICITY, GAS, & WATER SUPPLY CONSTRUCTION FINANCIAL INTERMEDIATION TRANSPORT, STORAGE AND COMMUNICATION 2.4% 5.1% 5.6% 7.0% 5.0% NPI SECTOR 8-COUNTRY AVERAGE

Npi Share of Belgian Value Added, Selected Fields, 2001 52.9% 42% 66.2% HEALTH SOCIAL SERVICES SPORTS & RECREATION

10 Great Myths of Global Civil Society Civil society organizations are chiefly an American phenomenon and are far less in evidence in other countries. There is no civil society sector for all intents and purposes in the Scandinavian countries, where the welfare state is most fully developed. Paid staff drive out volunteers.

Civil Society Organization Paid Vs. Volunteer Labor, 37 Countries VOLUNTEERS 44% PAID WORKERS 56% 47.6 million (including religion)

Volunteers as % of npi Workforce, by Country Cluster, 37 Countries 38% ALL COUNTRIES 38% DEVELOPING 38% DEVELOPED 24% 30% 31% 32% 37% 55% 64% ASIAN INDUSTRIALIZED LATIN AMERICA WELFARE PARTNERSHIP CENTRAL EUROPE ANGLO - SAXON AFRICA NORDIC

“VOLUNTEERLAND”—THE WORLD’S SECOND MOST POPULOUS NATION If volunteers were a nation… IF VOLUNTEERS WERE A NATION… MILLIONS OF PEOPLE 15 YEARS OR OLDER “VOLUNTEERLAND”—THE WORLD’S SECOND MOST POPULOUS NATION 92.8 101.3 109.4 121.6 127.7 162.4 239.7 756.5 1,023.5 Pakistan Bangladesh Japan Russia Brazil Indonesia United States India China 971.0 VOLUNTEERLAND

FTE Volunteers vs. Employment in Selected Industries, 37 Countries 38.4 34.4 20.8 MILLIONS OF FTE JOBS 5.2 VOLUNTEERS UTILITIES (water, gas, electr.) TRANSPORTATION CONSTRUCTION

CONTRIBUTION TO GDP, VOLUNTEERS vs. SELECTED INDUSTRIES, CANADA Why measure volunteering? CONTRIBUTION TO GDP, VOLUNTEERS vs. SELECTED INDUSTRIES, CANADA $14.1 billion $12.8 billion GDP CONTRIBUTION BILLIONS OF CANADIAN $ $6.1 billion VOLUNTEERS Motor vehicle manufacturing Agriculture

Volunteering Input as a Share of Total Private Philanthropy, 36 Countries GIVING OF CASH 32% GIVING OF TIME 68% Total value of private philanthropy, including religion = $564 bn.

Civil Society Paid vs. Volunteer Staff AS % OF Total Workforce, 37 Countries 35% 65% 100% PAID STAFF VOLUNTEERS Above average Below average Total 27% 57% 8%

ilo MANUAL ON THE MEASUREMENT OF VOLUNTEER WORK

10 Great Myths of Global Civil Society Paid staff drive out reliance on volunteers. Philanthropy is the chief source of civil society organization revenue.

Sources Of Civil Society Revenue, 34-Country average PHILANTHROPY 12% GOVERNMENT 35% FEES 53%

10 Great Myths of Global Civil Society Philanthropy is the chief source of civil society organization revenue. Philanthropy is at least the chief source of civil society revenue in the United States.

Sources of Civil Society Revenue, by Country FEE DOMINANT FEES, CHARGES PHILANTHROPY GOVERNMENT ALL COUNTRIES 53 % 35 % 12% Czech Republic Spain India Pakistan Japan Tanzania Hungary Uganda Slovakia United States Finland Norway Poland Italy Sweden Australia Peru Colombia South Korea Argentina Brazil Kenya Mexico Philippines 47% 49% 51% 52% 53% 55% 57% 58% 60% 61% 62% 63% 70% 71% 73% 74% 81% 85% 92% 39% 32% 36% 6% 45% 27% 7% 22% 31% 35% 24% 37% 29% 18% 15% 19% 5% 9% 14% 19% 13% 43% 3% 20% 18% 38% 23% 6% 7% 15% 9% 12% 4% 11% 35 Countries, without volunteers % may not add to 100 due to rounding

Sources of Civil Society Revenue, by Country GOVERNMENT DOMINANT FEES, CHARGES PHILANTHROPY GOVERNMENT ALL COUNTRIES 53 % 35 % 12% South Africa Romania United Kingdom Canada Austria France Netherlands Israel Germany Belgium Ireland 32% 29% 45% 39% 43% 35% 26% 19% 16% 44% 45% 47% 51% 50% 58% 59% 64% 77% 24% 26% 9% 6% 8% 2% 10% 3% 5% 7% 35 Countries, without volunteers % may not add to 100 due to rounding

Why do we have a nonprofit sector? Market Failure/Government Failure Contract Failure: The Trust Theory Supply-side theories Voluntary Failure Johns Hopkins Center for Civil Society Studies

10 Great Myths of Global Civil Society The nonprofit sector is labor intensive rather than capital intensive.

Nonprofit Fiscal Gap Operating revenue Investment capital Hard Soft

Nonprofit Capital Needs vs. Success Securing Capital, by Purpose Orgs. needing capital Orgs. securing needed capital Technology Program development Buildings/ land Staff development Strategic planning Vehicles/ equipment PERCENT OF ORGANIZATIONS 91% 80% 77% 67% 53% 52% 37% 25% 39% 26% 31% 42%

PHILANTHROPY’S BIG BANG SOURCE: Lester M Salamon, Ed., The New Frontiers of Philanthropy, (New York: Oxford University Press, 2014).

NEW FRONTIERS OF Philanthropy: Actors/tools Types of Actors Capital Aggregators Secondary Markets Social Stock Exchanges Foundations as Philanthropic Banks Quasi-Public Investment Funds Enterprise Brokers Capacity Builders Online Portals Corp-Originated Charitable Funds Conversion Foundations Funding Collaboratives Types of Tools Loans / Credit Enhancements Bonds Securitization Equity Investments Social Impact Bonds Insurance Social Investing & Purchasing Prizes, Crowd-sourcing SOURCE: Lester M Salamon, Ed., The New Frontiers of Philanthropy, (New York: Oxford University Press, forthcoming, 2014).

IS YOUR organiztion READY for THE NEW FRONTIERS OF PHILANTHROPY? Now available at: amazon.com oup.com

10 Great Myths of Global Civil Society The nonprofit sector is labor intensive rather than capital intensive. The civil society sector is growing at a slower rate than the private business sector.

Average Annual Growth of NPIs vs. Total Economy, 5 Countries 16.6% 7.0% 6.4% 6.2% 4.4% TOTAL ECONOMY NPI SECTOR 8.1% 6.7% 3.6% 5.4% 5.3% 4.1% -0.3% 5-COUNTRY AVERAGE CZECH REPUBLIC 2002-2005 BELGIUM 2000-2004 CANADA 1997-2003 UNITED STATES 1997-2006 JAPAN Does not include volunteer labor

LESTER M. SALAMON lsalamon@jhu.edu For More information LESTER M. SALAMON lsalamon@jhu.edu Website: ccss.jhu.edu Twitter: @JHUCCSS

Sources Of Civil Society Revenue, RUSSIA GOVERNMENT 15% PHILANTHROPY 33% FEES 51%