pruh_TITL logo_econ_W text The NON-PROFIT SECTOR ESF MU: BPV_APEC Public Economics Jakub Pejcal Brno, 1st December 2015. 1 pruh_normal pruh_normal www.econ.muni.cz text nStudents know what is the Non-Profit Sector nStudents know some basic theory about the sector nStudents know that the sector is not similar in international way n n nWelfare Triangle nSome Basic Theory nGovernment Failure nContract Failure Theory nWelfare State Theory nInterdependence Theory n---------------------------------------------------- nSocial Origins Theory nThe Johns Hopkins Comparative Nonprofit Sector Project (international survey) n(The Non-Profit Sector in your homeland) Object of this lesson Structure of this lesson 2 pruh_normal pruh_normal www.econ.muni.cz text nWhat do you think the Non-Profit Sector is? n n n n n n n The Ford Foundation Boy Scout of America Sport associations n n n n n n n Unions Salvation Army Greenpeace n http://t3.gstatic.com/images?q=tbn:ANd9GcTYbTuLl-is89UVDPxghcrQTMdWEOBmHRW4JY1A0aLRFTvaVrvM http://www.irish-architecture.com/architects_ireland/kevin_roche/images/ford.jpg Discussion 3 http://oceans.greenpeace.org/raw/image_full/de/foto-audio/foto/greenpeace-versucht-den-walfan https://encrypted-tbn1.gstatic.com/images?q=tbn:ANd9GcSOxj_LBxSZb0dmE_1u1VPeT1z5_lzy1r02CqfTdB6vzMd Dg21R https://encrypted-tbn3.gstatic.com/images?q=tbn:ANd9GcQ4riJFVSSXUROoWjdtiyDMNQjN1k4Cil82Ut4JhgTG5JW fHF4n http://www.prnewschannel.com/wp-content/uploads/2013/06/unions.jpg pruh_normal pruh_normal www.econ.muni.cz text nTheoretical instrument designed by Victor Pestoff (1995) nTriangle divide the national economy into 4 sectors: nState nMarket nCommunity (households) nThird sector n nCriteria: nFormal x Informal nNon-Profit x For-Profit nPublic x Private n nProblem of: nmixed organizations n Welfare Triangle 4 pruh_normal pruh_normal www.econ.muni.cz text nGovernment Failure Theory (or also Market Failure Theory) n nexists type of good that is not possible to provide by market nPUBLIC GOOD n nthis type of good is provided by public sector n npublic sector can not to satisfy whole demand norientation to a MEDIAN VOTER n nthe rest of not satisfied demand is served by NON-PROFIT SECTOR n nwhat can be a reason of MARKET FAILURE ? ncan you tell me some example of PUBLIC GOOD ? Some Basic Theory I. – why? 5 pruh_normal pruh_normal www.econ.muni.cz text nContract Failure Theory (or also Informational Asymmetry Theory) n nconsumers do not have a valid and suitable information for decision making process n nconsumers do not believe for profit subjects nconsumers believe subjects making things not for profit n ndemand is served by NON-PROFIT SECTOR n nwhat can be a reason of INFORMATIONAL ASSYMMETRY ? ncan you tell me some examples ? nhow can for profit subject improve its credibility ? Some Basic Theory II. – why? 6 pruh_normal pruh_normal www.econ.muni.cz text nWelfare State Theory n nNON-PROFIT SECTOR was a historical „problem solver“ n nmarket has become a better in problem solving over time npublic sector has made the same n nthe role of NON-PROFIT SECTOR is minority now n Some Basic Theory III. – why? 7 pruh_normal pruh_normal www.econ.muni.cz text nInterdependence Theory n nthere is an important connection between sectors nPUBLIC AND NON-PROFIT SECTOR n nNON-PROFIT SECTOR is better in identifying the problem npublic sector is better in solving and especially in paying n nreasons of NON-PROFIT SECTORs failure nphilanthropic insufficiency (not enough sources, free riders problem) nphilanthropic paternalism (client is not in the decision making role) nphilanthropic amateurism (workforce is not enough professional) nphilanthropic particularism (not enough for satisfy whole demand) n Some Basic Theory IV. – why? 8 pruh_normal pruh_normal www.econ.muni.cz text nSocial Origins Theory n nlooking on sector in a different (international) way ntake into account historical approach and macro-level theory n nthrough these aspects: npromotion of public sector neconomic size of NON-PROFIT SECTOR n nemphasize these models of NON-PROFIT SECTOR n1: Liberal model (low promotion, high size) n2: Social democratic model (high promotion, low size) n3: Corporatist model (high promotion, high size) n4: Statist model (low promotion, low size) n n(1: US, UK; 2: Italy, Sweden, Finland; 3: Germany, France; 4: Japan) Some Basic Theory V. – how looks like? 9 pruh_normal pruh_normal www.econ.muni.cz text nThe Johns Hopkins Comparative Nonprofit Sector Project nsystematic effort to analyze the scope, structure, financing, and role of the private nonprofit sector nrealized in cross-section of countries around the world (35 countries) § §Argentina §Australia §Austria §Belgium §Brazil §Columbia §The Czech Republic §Egypt §Finland §France §Germany §Hungary International Survey I. 10 § § §Ireland §Israel §Italy §Japan §Kenya §Republic of Korea §Mexico §Morocco §The Netherlands §Norway §Pakistan §Peru § § §The Philippines §Poland §Romania §Slovakia §South Africa §Spain §Sweden §Tanzania §Uganda §United Kingdom §United States pruh_normal pruh_normal www.econ.muni.cz text nfor purpose of the project are important (structural/operational): nOrganizations, i.e., they have an institutional presence and structure; nPrivate, i.e., they are institutionally separate from the state; nNot profit distributing, i.e., they do not return profits to their managers or to a set of „owners“, nSelf-governing, i.e. they are fundamentally in control of their own affairs; nVoluntary, i.e., membership in them is not legally required and they attract some level of voluntary contribution of time or money. n nthat are active in the field of: nculture neducation and research nhealth nsocial services nenvironment ndevelopment n n n International Survey II. 11 ncivic and advocacy nphilanthropy ninternational nreligious congregations nbusiness and professionals, unions nother pruh_normal pruh_normal www.econ.muni.cz text nthe civil society sector (the Non-profit sector) turns out to be a considerable economic force, accounting for a significant share of national expenditures and employment. More specifically, in just the 35 countries for which they have collected information: n nA $1.3 trillion industry. The civil society sector had aggregate expenditures of US $1.3 trillion as of the late 1990s. This represents 5.1 percent of the combined gross domestic product (GDP) of these countries. n nThe world’s seventh largest economy. To put these figures into context, if the civil society sector in these countries were a separate national economy, its expenditures would make it the seventh largest economy in the world, ahead of Italy, Brazil, Russia, Spain, and Canada and just behind France and the U.K. n nA major employer. The civil society sector in these 35 countries is also a major employer, with a total workforce of 39.5 million full-time equivalent workers including religious congregations. Findings I. NON-PROFIT SECTOR: A CONSIDERABLE ECONOMIC FORCE 12 pruh_normal pruh_normal www.econ.muni.cz text n n n n n n n n n n n n n n n n Source: Johns Hopkins n Comparative Nonprofit Sector Project Findings I. NON-PROFIT SECTOR: A CONSIDERABLE ECONOMIC FORCE 13 pruh_normal pruh_normal www.econ.muni.cz text n n n n n n n n n n Source: Johns Hopkins Comparative Nonprofit Sector Project (26 countries, 35 countries) Findings I. NON-PROFIT SECTOR: A CONSIDERABLE ECONOMIC FORCE 14 pruh_normal pruh_normal www.econ.muni.cz text ncountries vary greatly in the overall scale of their civil society workforce: n nthe sector workforce (volunteer and paid) varies from a high of 14 percent of the economically active population in the Netherlands to a low of 0.4 percent in Mexico n ncivil society sector is relatively larger in the more developed countries. In fact, the civil society organization workforce is there proportionally more than three times larger than that in the developing countries (7.4 percent vs. 1.9 percent) n n! it does not mean the absence of helping relationships in these countries ! n nto the contrary, many of these countries (developing) have strong traditions of familial, clan, or village networks that perform many of the same functions as civil society institutions n n n Findings II. NON-PROFIT SECTOR: DIFERENCE IN THE SCALE 15 pruh_normal pruh_normal www.econ.muni.cz text n n n n n n n n PAID STAFF X VOLUNTEERS n n n n n Source: Johns Hopkins Comparative Nonprofit Sector Project n (35 countries) n n n n Findings II. NON-PROFIT SECTOR: DIFERENCE IN THE SCALE 16 pruh_normal pruh_normal www.econ.muni.cz text nfunctions of non-profit organizations: nService: education, health, housing, economic, development promotion… nExpressive: expression of cultural, religious, policy values, interests, beliefs… n nservice functions dominate in scale. An average of over 60 percent of the total paid and volunteer full-time equivalent workforce of the civil society sector work for organizations primarily engaged in service functions namong the service activities of the civil society sector, education and social services clearly absorb the largest share n ndifferent situation relates to the Nordic countries (Finland, Norway, Sweden) and to the countries of Central and Eastern Europe (the Czech Republic, Hungary, Slovakia, Poland) nin both groups of countries the state assumed a dominant position in both the financing and delivery of social welfare services, leaving less room for private, civil society organizations Findings III. NON-PROFIT SECTOR: NOT ONLY A SERVICE PROVIDER 17 pruh_normal pruh_normal www.econ.muni.cz text n n n n n n n n SERVICE X EXPRESSIVE n n n n n Source: Johns Hopkins Comparative Nonprofit Sector Project n (35 countries) n Findings III. NON-PROFIT SECTOR: NOT ONLY A SERVICE PROVIDER 18 pruh_normal pruh_normal www.econ.muni.cz text nover half of civil society organization income comes, on average, from fees and charges for the services that these organizations provide and the related commercial income they receive from investments and other commercial sources n nan average of 35 percent of all civil society organization revenue comes from public sector sources, either through grants and contracts or reimbursement payments made by governmental agencies or quasi-nongovernmental organizations such as publicly financed social security and health agencies n nprivate giving from all sources (individuals, foundations, and corporations) accounts for a much smaller 12 percent of total civil society organization revenue Findings IV. NON-PROFIT SECTOR: FEES AS A SOURCE OF REVENUE 19 pruh_normal pruh_normal www.econ.muni.cz text n n n n n n n n n n n n n Source: Johns Hopkins Comparative Nonprofit Sector Project (35 countries) Findings IV. NON-PROFIT SECTOR: FEES AS A SOURCE OF REVENUE 20 pruh_normal pruh_normal www.econ.muni.cz text nit is possible to find a common regional features (scope, structure, financing, role of the non-profit sector) between similar countries n nbetween developed countries we can find this regions: n nAnglo-Saxon (Australia, United Kingdom, United States) n nNordic Welfare States (Finland, Norway, Sweden) n nEuropean-Style Welfare Partnerships (Austria, Belgium, France, Germany, Ireland, Israel, Italy, Netherlands, Spain) n nAsian Industrialized (Japan, South Korea) n nbetween developing and transitional countries we can find this regions: n nLatin America (Argentina, Brazil, Colombia, Mexico, Peru) n nAfrica (Kenya, South Africa, Tanzania, Uganda) n nCentral and Eastern Europe (Czech Republic, Hungary, Poland, Romania, Slovakia) n nOther Developing (Egypt, Morocco, Pakistan, Philippines) n n n n Findings V. NON-PROFIT SECTOR: ”COMMON“ REGIONAL FEATURES 21 pruh_normal pruh_normal www.econ.muni.cz text nDo you know some global non-profit organizations? n nWhat do you know about the non-profit sector in your homeland? n nWhat scope do you expect the non-profit sector of your homeland have? n nHow many people does work in the non-profit sector of your homeland? n nAre you active in the non-profit sector? n nHave you ever give on the non-profit sector? n nIn the Czech Republic: n 118,375 subjects, n 1.96% GDP, n 2.04% workforce (102,224 full-time equivalent), n 25,965 volunteers (full-time equivalent) Non-profit sector in your homeland? 22 pruh_normal pruh_normal www.econ.muni.cz text n nEnglish: nThe Johns Hopkins Comparative Nonprofit Sector Project. Available: n nCzech: nHYÁNEK, Vladimír. Neziskové organizace: teorie a mýty. Vyd. 1. Brno: Masarykova univerzita. 2011. 132 s. ISBN 978-80-2105651-0 n nREKTOŘÍK, Jaroslav. Organizace neziskového sektoru : základy ekonomiky, teorie a řízení. Vyd. 3. Praha Ekoress, 2010, 188 s. ISBN 9788086929545. n Literature (not important to study :-) 23 pruh_normal pruh_normal www.econ.muni.cz text THANK YOU FOR YOUR ATTENTION. The Centre for Nonprofit Sector Research cvns.econ.muni.cz www.facebook.com/CVNS 24