Measuring growth of the nonprofit sector: The choice of indicator matters

Abstract

Interestingly, although many authors consent that non-profit organizations and the non-profit sector have grown in many countries, there is little discussion of how to best measure this growth. Looking at the broad universe of non-profit organizations, there is no single measure that is relevant for the whole sector and captures changes adequately. This article gives an overview of commonly-used growth measures in the existing non-profit literature and discusses the informative value of the various measures. Using Austrian and Scottish time-series data we present an empirical example of how the growth story of the non-profit sector can change depending on the measures used. The correlations between measures such as the number of organizations, income/expenditures and assets are particularly small. We recommend that researchers measuring the growth of the non-profit sector should be clear about the properties of their selected measure, and where possible should present alternative measures in their analysis.