Non-Profit Sector in Canada
The non-profit sector in Canada is one of the largest in the world, second only to Netherlands. Canada’s non-profit sector employs about 12.8% of its active economic population. Although the non-profit sector is not considered a specific industry, its Gross Domestic Product (GDP) can be compared to several key industries in Canada. Statistics Canada divides the Canadian non-profit sector into two: the core non-profit sector and the overall non-profit sector. The core non-profit sector excludes hospitals, universities, and colleges. Including hospitals, universities, and colleges, Canada’s non-profit sector contributes in excess of $100 billion or approximately ...view middle of the document...
The board must be sufficiently skilled in management to assess the work of the CEO and assist in strategic decision-making. Non-profits have increasingly begun to rely on efficient managements to succeed in their missions, goals, and objectives. Across the non-profit sector, the most successful organization appears to be the ones with strong CEOs and an equally strong board. Ironically, in the past, management was considered a “bad word” in the non-profit world as a practice at odds with what some regard as the essence of the sector: voluntarism, philanthropy, compassion, and a concern for the public good. In the last two-three decades however, non-profits have grown into their roles and stature as major economic forces and important political actors. In essence, non-profits have come to embrace the culture of the business world, and the skills largely associated with senior managers in the for-profit sector.
The increasing employment of ‘business’ like management strategies by non-profit organizations has also led to increased scrutiny of managements in this sector. On top of that, an increasingly aware public has begun to hold the management accountable for the operations and the practices of the organization. From raising funds to perceived or real excessive administrative expenses to how each and every dollar raised is spent is subject to questioning by the public and even the government. The topic of management and board issues is vast in nature and as such, cannot be entirely addressed by this report. For the scope of this report, only few selected issues will be addressed and analyzed. This selection will enable an in-depth look at the topics, and narrow the focus of this report. These issues were selected based on the discussions in class, their relevancy to the main topic, and how important they are in today’s non-profit environment. The following issues will be covered in this report:
1. Executive Compensation
2. Role of the Board
3. Undefined Bottom-Line
Executive compensation is a major issue in the non-profit sector. Salaries for top executives in the non-profit sector have climbed 25% to 50% since 2000. It is estimated that for non-profits with operating budgets in excess of $20 million, 15% of their CEOs earned $250,000 to $350,000. Executive compensation has risen...