CHAPTER 2 BUILDING AN IDP FOR THE NON-PROFIT INSTITUTIONS (NPI) SECTOR

2.1 AN IDP AS A COLLABORATIVE DATA MODEL

An IDP:

• defines the field of statistics
• presents the policy and research context
• assesses available data against policy, advocacy and research needs
• develops agreed priorities for future information development

Importantly, the ABS is not the only provider or potential provider of information related to a particular field of statistics. There are a number of fields where other agencies take the lead role. Statistical information is generated from government administrative systems and by research institutes and sector peak bodies.

An IDP addresses the national statistical information environment for a particular topic. Collaboration between a wide range of data suppliers and users of statistical information is needed to assemble known sources of information, to assess whether it meets private and public policy, research and advocacy needs, and to devise a plan to rectify gaps and deficiencies in the information.

There are a large number of known or potential providers of statistical information relevant to the NPI sector and volunteering. These include (but are not restricted to):

• the ABS (economic and social statistics)
• the Australian Institute of Health and Welfare
• the Australian Taxation Office
• Commonwealth, state and territory government agencies who have financial or regulatory relationships with the sector
• NPI sector peak bodies
• University and other economic and social research institutes

Useful statistical data are held separately by government and other agencies. As the national statistics agency, the ABS has an important role to work with other information providers to promote best statistical practice through an agreed set of statistical frameworks, principles and policies, consistent with the National Statistical Service (NSS).


2.2 SCOPE OF THE IDP FOR THE NPI SECTOR

The information referred to in this IDP is statistical information. IDPs have a primary focus on information that is, or is intended to be, placed in the public domain. Data from government administrative processes have a potential statistical use and the design of these systems should take this into account. An IDP also has a wider role in identifying ways to optimise the collection of information from the many contacts NPIs have with the various arms of governments.

NPIs are a broad subject field covering a wide range of activities in education, research, health, housing, community services, emergency services, religion, sports and recreation, arts and culture, environment, philanthropy, job finding, political and industrial organisations and international assistance and advocacy topics. As indicated in the Productivity Commission study, the sector makes a major contribution to both the economy and to social outcomes.

One of the difficulties in producing an IDP for the sector is how to contain and shape it. Government stakeholders have a primary focus on measuring activities and outcomes related to their social, cultural, recreation, environmental and economic policy initiatives. Much of the statistical effort of the ABS and other government agencies has been in providing information related to these broader policy fields, and less on who is delivering the services. NPIs, utilising resources from government, private funding and volunteers, are one of the institutional types delivering services and contributing to social outcomes, along with governments themselves, private businesses and volunteers.

An IDP for NPIs takes a sectoral view, not a whole of industry or government policy program view. The term 'institutional sector' in statistical standards is used to describe a grouping of legal or social entities with common characteristics. This IDP focuses on NPIs, and services provided by volunteers through NPIs. Section 2.4 elaborates on the definition of an NPI for the purposes of the IDP.

Table 1 below presents a sectoral view of the social policy and other fields to which NPIs are significant contributors. It is the shaded area that is the subject of this IDP.

TABLE 1. SECTORAL VIEW OF SERVICE PROVISION

ACTIVITY	SERVICES AND ASSISTANCE PROVIDED BY -
	Non-Profit Institutions (a)	Governments (a)	Businesses	Other volunteers and Carers	Total
Health
Education and research
Social services and emergency relief
Housing
Environment
Law, advocacy and politics
Business and professional assoc. and unions
Culture and Recreation
Philanthropic organisations
Employment services
Religion
International activities
Total

(a) Includes volunteers.

The ABS and AIHW have already produced a number of IDPs for subject fields where NPIs are major contributors:

• Arts and Cultural Heritage (available on ABS website)
• Children and Youth (available on ABS website)
• Measuring Learning (available on ABS website)
• Housing (in progress)
• Community Services (available on AIHW website)
• Public Health (available on AIHW website)

These were developed after substantial consultation with stakeholders, many of whom are also stakeholders in this IDP.
2.3 THE UN HANDBOOK ‘NON-PROFIT INSTITUTIONS IN THE SYSTEM OF NATIONAL ACCOUNTS’

The United Nations Handbook on Non-Profit Institutions in the System of National Accounts (footnote 2) is a key international standard for statistical collections related to the sector and is the underlying framework for the ABS Non-Profit Institutions Satellite Account. It makes recommendations about the scope of the sector, provides a standard classification of activities and the data items necessary to measure the economic contribution of the sector and to enable international comparisons. It establishes the International Classification of Non-Profit Organisations (ICNPO) as a statistical standard.

The UN Handbook was prepared by the Johns Hopkins University Centre for Civil Society Studies in close collaboration with the United Nations Statistical Office and a wide range of international stakeholders.

Although the Handbook is aimed at a high degree of aggregation relevant to the national accounts, the concepts and classifications recommended are applicable more generally for data and statistics related to the sector. Standard concepts and classifications are critical to unlocking the full power of data for analysis.


2.4 DEFINING THE SCOPE OF NPIs

Widely used terms such as ‘third sector’, ‘civil society’, ‘social economy’, ‘not-for-profit’, ‘non-profit’, ‘charity’, ‘non-government organisation’ and ‘community organisation’ lack the precise definition required for statistical classification and data collections. There is a need for standardised terminology and definitions for statistical reporting, as these terms are used interchangeably in common usage or mean different things to different people.

The UN Handbook considers the issues around definition and scope of the sector. While it recognises that the population can be drawn in a variety of ways depending on the policy or analytical interest, it settles on a working definition for the purpose of the satellite account. Once the scope is defined, organisations or groups of organisations can be further classified in a number of ways, particularly in terms of the type of activity using the International Classification of Non-Profit Organisations (ICNPO), community serving or member serving, or whether they are primarily engaged in market or non-market activities.

The UN Handbook uses a ‘structural-operational’ definition to define the scope of non-profit institutions for use in the satellite account and for international comparison purposes. It includes only entities that are:

• organisations
• not for profit and non-profit distributing
• institutionally separate from government
• self governing
• non-compulsory

Australian National Accounts: Non–Profit Institutions Satellite Account (cat. no. 5256.0) provides further information on the definition.

Based on the ABS’ interpretation of the UN Handbook, the following types of organisations were excluded from scope of the Australian NPI satellite account –

• mutual organisations in the financial sector such as credit unions, building societies, and insurance companies
• body corporate entities
• agricultural marketing boards classified to the non-financial corporations sector
• universities, hospitals and other organisations classified to the government sector

There may be times when a wider third sector or social economy may be preferred. There is emerging interest in new forms of social enterprise and business-community partnerships which involve profit distributing businesses. The non-profit distributing criterion for NPIs may be considered too restrictive for some areas of research.

Some flexibility in the scope is required where policy and research needs require more than one definition. However, statistical collection requires precisely defined organisation types or characteristics that can be identified in organisation registers used for statistical collections or that can be recognised by collection respondents themselves.

The boundary between what is an ‘organisation’ and what is a ‘loose’ association of households or individuals is blurred. To be an organisation under the definition of an NPI, they need to have some degree of internal organisational structure (but not necessarily an explicit legal standing) and have some degree of continuity. The large group of organisations that are referred to as unincorporated associations in Australia are included in the definition (although there might be operational difficulties around their identification in practice). Temporary or ad hoc associations of people are regarded as ‘individuals’ or ‘households’ rather than as NPIs. This concept of an organisation is consistent with government policy interest around the NPI sector.

Much of the activity of NPIs depends on the input of volunteers who provide services to members and the community. Government policy towards NPIs recognises and promotes the contribution of volunteers. The information needs of the volunteer sector are integral to an IDP for NPIs.
Footnote
2 United Nations Handbook on Non-Profit Institutions in the National Accounts, Studies in Methods, Series F, No 91, New York 2003.<back