Introduction

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The social economy has been receiving increasing attention by both academics and government institutions. This part of the economy has been referred to in the literature and in public debate with a variety of terms, such as non-profit sector, voluntary sector, or third sector. Although each term has particular connotations, all tend to encompass what Human Resources and Skills Development Canada (HRSDC) describes as "a grass-roots entrepreneurial, not-for-profit sector, based on democratic values that seek to enhance the social, economic, and environmental conditions of communities, often with a focus on their disadvantaged members" (HRSDC 2005).

This attention has been reflected in various major initiatives undertaken in recent years. In 2000, the Government of Canada launched the Voluntary Sector Initiative (Government of Canada / Voluntary Sector 2003). As part of this initiative, in 2003, the first national survey of the non-profit sector was conducted by Statistics Canada (Statistics Canada 2004). Parallel to that, a satellite account was created for non-profit institutions and volunteering within the framework of national accounts (Statistics Canada 2008a).

The research and policy attention toward the social economy are motivated by several factors. First, there is a growing recognition of the role and contribution of this sector to the Canadian economy (Statistics Canada 2004 and 2008a). In spite of definition and measurement challenges, the data initiatives have provided clear indications on the aggregate size of this part of the Canadian economy (Reed and Howe 1999; Statistics Canada 2008a). Besides a myriad of unincorporated community organizations, for which comprehensive records are not readily available, a large part of the social economy has a formal and recorded dimension. Across Canada there are about 83,000 registered charities and 81,000 non-profit organizations that file annual tax and information returns (CRA 2008).¹ The total revenue generated by this formal component of the non-profit sector was reported to be well over the $100 billion mark since 2001 (Statistics Canada 2004). The contribution to the GDP of this core part of the non-profit sector was estimated at 2.4% in 2005 (Statistics Canada 2008a). And in 2006, registered charities generated $163.1 billion in total revenues and spent $111.8 billion in carrying out their charitable programs, while accounting for approximately 2 million paid employees (CRA 2008).  

A second factor that motivates this attention is an increasing understanding of the role of the social economy as an alternative form of governance that promotes civic engagement, social cohesion and social participation, which in turn have been associated with stronger communities, more desirable social outcomes and economic growth (Devlin 2000; Offord et al. 1998; Putnam 2000; Knack and Keefer 1997). Governments are increasingly turning to community-based initiatives to address local problems with local solutions (HRSDC 2005). The contribution of social enterprise has been acknowledged in many areas from the enhancement of community capacity for social support, to community revitalization, to the mobilization of disadvantaged groups (HRSDC 2005).

While this role is recognized in all contexts, its relevance is even more crucial in periods of economic restraint and restructuring, such as those faced in recent years by many rural communities. The available evidence suggests also that there are differences between rural and urban areas with respect to the role and functioning of social enterprises. Rural residents were found to be more likely to volunteer than urban ones (Reed and Selbee 2001; Turcotte 2005). Other research has emphasized the role of social enterprises in rural development, suggesting that a vibrant social economy is a key asset for rural communities facing challenging economic conditions and an important component in their capacity to adapt and to respond to challenges (Goldenberg 2006). Other research has pointed to the potential role of the social economy in providing services that, for a variety of reasons, are no longer supplied by other public organizations (Roberts 2001), which might have specific implications and challenges for rural and sparsely populated areas.

In spite of the substantial progress made in recent years, the analysis of the spatial variation, and more so the use of social economy indicators at the community level, has been constrained by data availability. On the one hand, some of the surveys focused on individual level data and individual behavior (Reed and Selbee 2000 and 2001). On the other hand, the survey conducted on non-profit organizations was not tabulated by the size of community in which the organization operated (Statistics Canada 2004). As a result, the analyses of rural–urban variations remains limited and less is known of the spatial variation along the urban to rural gradient.²

The objective of this paper is to present a profile of registered charities across the rural to urban gradient. For this purpose we use the administrative database of the Canada Revenue Agency (CRA) on registered charities. Charities registered with the CRA are required to comply with the provisions of the Income Tax Act that apply to their registered status (Box 2).³ For this reason registered charities must file an annual Registered Charity Information Return (T3010A). Some studies have made use of this database (see Dreessen 2002), however the potential for rural and community analysis has not yet been fully exploited. The use of administrative data presents a unique opportunity for research but at the same time presents some challenges for spatial analysis. We overcome these challenges by using a Statistics Canada application, the Postal Code Conversion File (PCCF+, Version 4H, June 2006), that allows a user to convert a variety of geo-referenced data into standard census geographies (Statistics Canada 2008b). We then aggregate the community level information using the rural and small town definitions of rural (Box 1). This paper also demonstrates the potential of Statistics Canada's PCCF+ application for future research in which the rural to urban gradient is an important dimension.

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Notes

1. Charities only file information returns (T3010) and are exempt from filing Income Tax returns.
2. Canada Revenue Agency (CRA) launched the Small and Rural Charities Initiative in October 2007. For this purpose, small charities were defined as registered charities with total annual revenues under $100,000. Rural charities were defined as registered charities that have a postal code where the second character is "0", the coding used by Canada Post to identify rural areas. According to the 2006–2007 registered charity information returns filed, there were 83,372 registered charities in Canada. Small charities accounted for 54% and rural charities accounted for 22% of all registered charities. In all, 14% of charities met the definitions of both small and rural charities. It should be noted that, although there is no single definition of "rural" that fits all contexts (du Plessis et al. 2001), the use of postal codes to define "rural" is subject to the continuous reclassifications of these postal codes. The conversion to urban style postal codes of areas that were previously considered rural is referred to by Canada Post as "urbanization" of the postal code; changes of this nature are made on a regular basis, and resulted in the complete "urbanization" of the postal codes of some provinces. For instance, currently New Brunswick contains urban postal codes only.
3. CRA provides tax measures that registered charities must comply with to remain registered.  However, charities are within provincial regulatory jurisdiction.