About the Non-Profit Sector

What is the non-profit sector?

Non-profit and voluntary organizations are organizations “whose work depends on: serving a public benefit; volunteers for at least its governance; some financial support from individuals; and limited direct influence by governments, even though they may receive support from government sources.”

Why does it exist?

Social structure is sometimes described as a three-legged stool held up by government, the private sector, and the non-profit sector. The non-profit sector plays a large role in maintaining, building, and protecting community by providing valuable services and programs. Historically, non-profit organizations have been catalysts for change, introducing multiple perspectives in society, and working for the empowerment of society’s most marginalized people. They play a significant role in democracy, providing a means of expression, and activism for many people who are, for one reason or another, excluded from conventional means of political expression.

Depending on the economic and political system, the state (embodied by the government) provides some social programs and basic services. However, the growing local and global trends towards a market-driven economy and a reduced government role in direct welfare provision are placing higher demands on the non-profit sector to improve social welfare and other quality of services.

Challenges and Issues

Funding:

• Dependency on external agencies for operational and project funding. Funding from the government (which a counts for approximately one-third of funding in the non-profit sector) is often short-term and project-specific, and does not contribute to the administrative costs of running the organization. Dependency on external short-term funding prevents non-profits from being able to implement any long-term organizational plans, and contributes to many of the staff changes and shortages that you’ll notice when working with non-profits.

Human Resources

• Increasing competition for workers in the province. The non-profit sector must compete with the public sector and industry for entry-level and front-line positions as well as qualified applicants. The non-profit sector struggles to offer competitive pay (due to lack of organizational funding), and personal development opportunities.

• Stressful working conditions. Due to shortages in staff numbers, staff end up working an increasing amount of overtime. Overtime is particularly high for supervisors and senior staff and compensation does not fully reflect this. Staff often take on multiple roles within the organization causing burnout, decreased morale, higher turnover and lower quality of service for clients.

• Difficulty recruiting volunteers. The pool of volunteers in Alberta can shrink as people choose to enter or re-enter the labour force to take advantage of high wages.