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The Satellite Account of Nonprofit Institutions

The Satellite Account of Nonprofit Institutions is an element of Canada’s System of Macroeconomic Accounts (CSMA). The CSMA is an integrated set of accounts designed to measure Canada’s economic activity. It is founded on an integrated set of internationally accepted concepts, definitions and classifications called the System of National Accounts (SNA). Properly implemented, the SNA supports the compilation of comprehensive accounts to describe an entire nation’s economic activity, allowing users to track changes over time and even make meaningful international comparisons with other economies.

While the nonprofit sector is well captured by the SNA, in the sense that most nonprofit organizations and their economic activities are in-scope and captured by existing SNA measures, it is not very visible in system outputs because the traditional SNA framework assigns most of the sector’s organizations and activities to government or business. For this reason, in 2004, Canada became the first country in the world to establish a Satellite Account of Nonprofit Institutions.[1] This account re-organizes existing SNA data, identifying nonprofit organizations that conventional measures classify to government and business and breaking them out separately. It is one of the most comprehensive and long-running measures of the nonprofit sector in the world.

Data Produced by the Satellite Account

The Satellite Account is produced by Statistics Canada and contains a wealth of information about the size, scope and composition of the Canadian nonprofit sector. Key data contained in the account include:

  • economic contribution (gross domestic product or GDP),
  • major sources of revenue and expenditures,
  • paid staff numbers,
  • and labour force characteristics, including key demographics and compensation levels.

 

Data are produced annually at both national and provincial / territorial levels. Presently, data cover the period from 2007 to 2021, providing insight into long-term trends.

A limited number of estimates are produced quarterly at the national level only.

Sub-Division of the Nonprofit Sector

The Satellite Account sub-divides nonprofits by type and activity area, providing more granular views that better reflect the diversity of organizations making up the nonprofit sector.

Nonprofit Type and Sub-Sector

The Satellite Account divides the nonprofit sector into three major parts, depending on the degree of organizational independence and revenue strategy.

Community nonprofits: These organizations are independent from government and produce goods and services for free or for prices that are not considered to be economically significant (i.e., the prices charged do not significantly influence the amounts of the good or service produced or the amounts purchased by consumers). The goods and services produced by community nonprofits may be consumed by households (including individuals) or collectively by society at large. Examples include human services organizations such as foodbanks, shelters, youth groups, places of worship, advocacy organizations and service clubs.

Business nonprofits: As with community nonprofits, these organizations are independent from government. They differ in that they produce goods and services for household or collective consumption at prices that are economically significant (i.e., they engage in market production) or produce goods and services for businesses or other nonprofit organizations. Examples include business associations, chambers of commerce and condominium associations.

Government nonprofits: These organizations are similar to community nonprofits in that they produce goods and services for prices that are not economically significant. The key difference is that they are heavily influenced by government, even though they are institutionally separate from it. Examples include hospitals, some residential care facilities, universities and colleges.

Community and business nonprofits are grouped together to form the core nonprofit sub-sector which is contrasted with the government nonprofit sub-sector made up of government nonprofits.

Activity Areas

In addition to dividing organizations by type and sub-sector, the Satellite Account assigns organizations to one of 12 activity areas, depending on their primary activity area. These are:

Arts, culture & recreation: includes museums, visual, material and performing arts groups and facilities, media, historic and humanistic societies and sports and recreation groups.

Education & research: organizations dedicated to the provision and support of educational services and research. Universities and colleges are assigned to the government sub-sector.

Health: organizations providing and supporting in-patient and out-patient healthcare services. Hospitals and nursing homes are assigned to the government sub-sector.

Social services: organizations providing a diverse range of non-health related human services. A minority of organizations in this activity area are assigned to the government sub-sector, depending on the degree of influence government exerts on them.

Environment: organizations engaged in environmental protection and conservation, including animal welfare.

Development & housing: organizations engaged in social, community and economic development and the provision of housing.

Law, advocacy & politics: organizations engaged in advocacy or providing legal and related services, including offender rehabilitation.

Philanthropic intermediaries & voluntarism: public and private foundations and organizations promoting voluntarism.

International: organizations engaged in international development and relief, including promotion of human rights and peace.

Religion: congregations and associations of congregations, including religious education and training.

Business and professional associations & unions: organizations working to regulate and advance the interests of particular industries or groups of workers.

Other: organizations not elsewhere assigned to an activity area.

How to Use Satellite Accounts Data

The main use of the data is contextual, to give stakeholders a 30,000 foot view of the nonprofit sector. Because data are subdivided by province / territory and organization type, sub-sector and activity area, these high-level views can be reasonably specific to particular organizational circumstances. Key strengths of the data are its time depth and comparability with other economic measures. Collectively, the data give a good starting point from which to begin engaging audiences, first highighting the overall importance of the nonprofit sector and then allowing users from particular organization types to drill down and better explain their particular situations. Example applications might include:

  • highlighting to provincial policymakers the role of nonprofits as employers,
  • highlighting to corporate funders the extent to which corporate donations have tended to lag other sources of revenue in particular jurisdictions, and
  • explaining the relative importance of earned income to potential supporters.

 

Significantly, although these data are quite sub-divided they are not fully disaggregated by key dimensions such as organization size. Although the data is somewhat useful for applications like benchmarking, users should be deliberately consider how the data would reasonably be expected to vary by these dimensions.

Footnotes

[1]: Satellite accounts are special-purpose vehicles designed to examine particular areas of economic activity in greater detail or in different ways than the conventional SNA framework supports.