Canada followed a pure capitalist system, how would the non?profit sector be
Capitalism is a system in which most of the business
or the companies that produce goods are privately owned in order to generate
profit. The Nonprofit sector in Canada constitutes about 2.5 percent of GDP,
which is bigger than auto and agricultural sectors (Statistics Canada 2007: 10,
If Canada to follow the pure capital system, it will
affect nonprofit sector deeply. The main effect will be the financial return. The
main motive of capitalism is to generate profits and distribute these profits
among company’s owners and shareholders. On the other hand, nonprofit
organization aims to provide society needs rather than concentrating on
generating profits. After coming under capitalism, these nonprofit sectors will
have to generate a profit which defeats the purpose of being a nonprofit
organization altogether. For example, In case of healthcare, research indicates
that just to make the profit, the quality of non-profit hospitals have declined
Secondly, Capitalism will have a deep effect on
Volunteering. In 2013, about 12.7 million i.e. 44% of the Canadian population
was indulged in some sort of volunteer work(Turcotte, 2015). Volunteering does not require any special
education background. With the introduction of capitalism, organizations will
look for employees with proper profile suited to their work. The risk of losing
jobs will be very high. Volunteers are like unpaid workers and cost of
replacing them with actual employees will be huge. Also, capitalism is based on
gaining profit, whosever will not bring the profit to the organization, he may
lose the job.
you agree with the standard measure of GDP for non-profit organizations (i.e.,
to include a replacement cost value of volunteer work)? Explain.
Gross Domestic Product mainly focus on the measure
of total market value goods and services produced within a particular country
over a certain period. While measuring GDP, We mainly focus on standard
accounting that includes the paid employees and it does not count the services
that are unpaid. The whole mechanics of non-profit organizations is based on
Volunteer work. The Standard measure does not include the services of volunteer
work, even such work contribute to social well-being as much as economic
production does. Free services such as hospitals funded by donations etc that
are provided by non-profit organizations do not come under GDP even if their
employees get monthly wages.
So, to measure GDP for the non-profit organization,
economists consider a replacement cost value of volunteer work. This means use
the same cost it would take to do the work by the paid employee as done by
volunteer worker. But there are some
shortcomings in this method.
the organization willing to pay for volunteering? Suppose 50 full-time
employees are working volunteering in a hospital. So, In order to calculate
GDP, we will replace all 50 volunteer employees with full time paid workers and
calculate GDP. But Is the organization willing to replace all 50 volunteers
with actual paid employees and pay their minimum wages, Maybe maybe not? So, We
cannot predict the actual GDP.
actual value of each Volunteer is different and cannot be compared to its
respective paid individual. Suppose a lawyer is doing volunteer work and is not
taking any salary. We will take its replacement cost as average for a lawyer
and it is supposed 20 dollars per hours. But in actual that volunteer will take
40 dollars per hour for his services in case he decides to take the salary. So
actual cost cannot be determined correctly.
So, I do not think this is the correct way to
determine GDP of the non-profit organization.
do you think these organizations are experiencing difficulties in recruiting volunteers?
How could you be encouraged to volunteer?
There are many reasons for not finding volunteers.
Recruitment Issues: Non-profit organizations do not
want to waste their resources in a long recruitment process. Those days are
gone when someone comes to the office and ask to volunteer. Non-profit
organizations do not want to waste their time as well as money to do the
identification of a volunteer, perform interviews, background checks and train
Choose Right Volunteer: IT is very important for a
non-profit organization to choose right volunteers for the right job. It is
important to provide an accurate description of the volunteer work. For example,
a non-profit organization in healthcare will recruit volunteers with some
medical background. It may be difficult for them to get those volunteers. It is
very important to keep someone interested in his job. A volunteer may leave if
he is asked to do the meaningless or boring job.
Compensation: Most of the volunteer work is unpaid. Today
everyone wants to be compensated in order to live life properly. So, It is
difficult to recruit employers for an unpaid job. All of them will be looking
for a job with a good financial package.
In order to get me to volunteer, Non-profit
organization must post their work on job search websites. Even they can put it
on social media sites as well. They must be able to ignite interest in me by
making me choose volunteer work in my education profile. They must give the
volunteer work that suits me. For example, my background is engineering and the
work they gave is to do faxes and make copies. After some time I will lose the
interest in that work. They must train me for the volunteer work I am supposed
to do. Without proper training, I may not know what to do and eventually will
lose the interest in work.
Statistics Canada. 2007. Satellite Account of
Non-profit Institutions and Volunteering,
2007. Catalogue no. 13-015-X.
Turcotte, M. 2015. Volunteering and charitable giving
in Canada. Catalogue no. 89-652-X2015001.
Porter, E. (2013, January 2013). Health Care and
Profits, a Poor Mix. Retrieved from http://www.nytimes.com/2013/01/09/business/health-care-and-pursuit-of-profit-make-a-poor-mix.html?_r=2&.
Goodwin, N., Harris, J.M., Nelson, J.A., Roach, B.
and Torras, M. (2015). Macroeconomics in Context. Retrieved from