 Greetings, colleague. We're now going to take up the fourth topic, session four of our workshops that we started some time ago. This one is a little bit complicated, not that the others were not complicated, but it really changes the focus. Up till now, we have been trying to identify the components that make up the TSE sector. And so we've been trying to pull all of those components out of the economy as a whole, but we're treating the components as singular items, though we did identify two sets of components. One of them are the institutional units, which I am sure are familiar to all of you who work in the system of national accounts and national accounting. And the second type of component were an individual action component. And the focus there was on volunteer work, though, as we'll hear a little bit later on, we are also focusing on workers who are paid, in addition to workers who are not paid. For this session, however, we're going to look inside those two categories, inside the institutional units to differentiate the different types of institutional units that collectively make up the TSE sector institutional units. And similarly, we're going to look inside the individual activity components, particularly the volunteer ones, to see the different types of volunteer activity that are encompassed within the TSE units. So the focus is a little different. It is still on institutional units and it is on volunteer activity, but it's looking at the differences among the different institutional units and the differences among the different types of volunteering. So that's one big level of difference. But beyond that, we're going to find that there are a variety of options for classification. It's not simply one type of classification that we can project, but rather multiple types, at least two types for each of these components. So two types of institutional unit classifications and two types, at least, of volunteer type component classification. So let's get started and we'll jump right into it. We're going to start first with the institutional units. And the institutional units can be classified in terms of two very different concepts, as shown in this slide. One of those concepts is the institutional subsector that the unit represents. And the other type is the field or industry that that institutional unit is focusing on. So let's start by focusing first on the classification of the institutional units by subsector. So this is now we're focusing on institutional units and we're going to focus on the subsectors. And as you may remember from long ago in our first workshop, we identified three distinct types, more or less distinct types of institutional units. There are nonprofit institutions already well known in the national accounts world, but there are also cooperatives and mutuals. And then this new type of entity that has appeared on the stage in really, really recent years, maybe the last decade, social enterprises. And just to cause us extra difficulty, within the nonprofit institutions, there are also allocated frequently cooperatives and mutuals and social enterprises, which satisfy all the criteria of being a nonprofit institution, despite the fact that they may have a legal standing that identifies them as cooperatives or mutuals or as social enterprises. In other words, some cooperatives are also NPIs and so are some social enterprises and they may even have the legal status of a nonprofit institution in some country. So we have these three types of institutional units and the question is how do we go about identifying them? And so to lay this out, we have developed a decision tree that will help us to sort out what kinds of entities belong in these different sub-sectors. Again, we're trying to identify and allocate them to these three sub-sectors so that we can report data, not only at the aggregate scale of a TSE unit in general, but to differentiate between the nonprofit institutions within the TSE sector, the social enterprises within that sector and the cooperatives or mutuals. And this is because the players in those different fields like to see data that represent them within the overall satellite account that we're attempting to create. So let's go through this. It's a little complicated, but I think that you will be able to follow along and at any rate, you can open these and work from them at your own speed after we finish the workshop. And then beyond that, we have offered to provide technical assistance to your statistical office and all of your personnel. As you work your way through these, we have developed some additional mechanisms that will help you do this kind of work, field guides that assist in making these distinctions and what we've done with other countries is to review the field guides once they are completed and give feedback on whether the application of these rules and differentiations are being consistently applied in your country compared to other countries in the world. So the first step in this decision tree related to the TSE sector units and particularly the classification of them in terms of the type of sector unit they represent, we asked the question for that particular unit, is there a total prohibition on nonprofit earning or particularly nonprofit distribution in that unit? Is there a legal requirement that prohibits the distribution of profit to investors or to people who have some kind of ownership involvement in the unit? And if the answer is yes, that is there is a total prohibition on the distribution of profit, then right away we know that the unit is a part of the NPI sub-sector and we can put it into a little box called NPI sub-sector and then proceed to the next step. The next question is, can it distribute profit in proportion to capital invested? In other words, is there a unit that is allowed to distribute profit and is allowed to distribute it almost without limit even to the amount of capital invested? And if the answer to that is yes, then right off the bat, we know it is a social venture entity because neither nonprofits nor in-scope co-ops or mutuals can distribute profit without limit. So if there is any unit that is able to do that, we know and that is been established as in-scope of this TSE sector, then we know right off the bat that it is a social venture component. We then proceed to the next step and it asks, is it democratically governed? That is one person, one vote. This is a requirement that is typically found in laws relating to cooperatives and mutuals that they must be governed by a one person, one vote rule. In other words, if you are a member of the cooperative or the mutual, you are involved in voting for the governance and organization of that unit. So if the answer to that is no, then you are likely a social venture component because social ventures do not have this kind of feature that one person, one vote. They can be owner-controlled units but serving a public purpose. They have to meet the general TSE qualifications but they are allowed to have individual ownership of the venture but that's not true of cooperatives. So if the answer is yes, then we have reason to believe that the unit is a cooperative. And then the next line are members, both owners and customers. And here again, there's a real difference between social ventures and cooperatives. In cooperatives, the members are the owners of the cooperative and they frequently are also, it's customers. So for example, a production cooperative or a marketing co-op, let's imagine that you are a cotton farmer and you produce cotton and you take it to the mill to be processed. The mill can be a co-op and you as a owner of that cooperative as a member of that cooperative are part owner and therefore you are both a member and a customer of the cooperative. Social enterprises do not have that characteristic. They are frequently, they look a lot like private businesses but they're private businesses serving a public objective. So if the answer to this is no and you are looking at a unit that is a TSE in scope unit, then that scope, that unit is very likely a social venture unit. And then we go on. Is it oriented to provide services to members at cost? Again, this is a feature that is characterized, caricatured of the co-ops and mutuals. It is not a feature that is characteristic of social ventures. So if you end up saying yes to that as well, you've answered yes to four different questions and each of those questions has a characteristic of a cooperative or mutual behind it. And therefore you can conclude that any unit that gets a yes at each of these steps is a cooperative or mutual component of the TSE sector. So what this decision tree allows you to do is to sort out the nonprofit institutions. You do that in the first step to sort out the social venture sub-sector units. You do that on the second and third and fourth and fifth steps. And then what's left essentially is a type of unit that we can pretty well certainly conclude as a cooperative. So this is the first step of the first type of differentiation, first type of classification that we are able to carry out. It involves having a fair amount of material and information about these different components, about these different entities, these different institutional units. Once that material is collected, then using this decision tree, you can pretty well get a handle on which of the units that are in the TSE sector fall into these different buckets in terms of their type, their sub-sector as opposed to their field. So now we turn from the sub-sector allocation and classification of institutional units to the second type of classification. And this is the classification by field or by industry. And here again, just to keep things complicated, we have two types of options here for the classification of institutional units by their field of activity. And essentially what the difference is between these is that there are certain general classification schemes that are already built into the SNA. You all know them. They're the ISIC classification, the International Standard Industrial Classification were now up to revision four of the ISIC and many countries just use that. But there are also some other ones. There's a separate European classification, NAICS REV2. And then there is a North American Industrial Classification, NAICS NAICS. These have modest differences among them. They are fundamentally very, very similar. ISIC and NAICS and NAICS are virtual identical classification structures. All of them really are classifications by the field of activity or by the industry. And they have many advantages, particularly because they are also used in the rest of the system of national accounts, which facilitates the comparison between the TSE units and all the other units that are in your economy and covered by the system of national accounts. The problem is that they don't do such a great job in differentiating features that are really characteristic of these third sector, these TSE sector units. And for them in the early days of our research, we found that there were really pretty significant limitations in the REV3, revision three of ISIC. They simply bundled too many things together to be able to differentiate at a fine enough level of detail the different industries and fields that nonprofit institutions participate in and are involved in. And therefore it was very difficult to differentiate and clarify the components of the nonprofit sector. And the addition now of these third sector institutions, namely cooperatives and mutuals and social enterprises, that's become all the more difficult. And so we developed something called the ICNPO, the international classification of nonprofit organizations. And then in the development of the 2018 UN Handbook, which is what we are focusing on now, we elaborated on that to pick up the other types of units. So it's now called the ICNP slash TSO classification, the international classification of nonprofit and third sector organizations, ICNP TSO. So let's look inside a little bit at these different classifications beginning with the NAICS REV2, which is a standard in all of Europe and is I think used in other parts of the world as well. It has different levels of aggregation. The one that's shown here on this slide is the section level, the major fields. And just for sake of understanding what's gonna come next, I call your attention to section Q, just one of these sections that is included in this structure of accounts. And you'll see one of the difficulties of it from the point of view of the TSE sector, because it bundles together in just one major section, all of human health and all of social work activities and social services. And this is an extremely broad array. Human health alone has got multiple kinds of institutions from nursing homes to hospitals to doctor's offices and social work has even more types of distinct activities. And therefore this grouping makes it very complicated to use the NAICS alone to capture the different types of industries that the TSE units might be engaged in. So let's take a look at why there is some argument for using the ICNPO. One of the reasons is that a number of countries started out using the ICNPO in their work on the non-profit satellite account. And so they'd have to change gears in order to get away from that when they wanna classify the TSE units. So compatibility with existing non-profit institutions satellite accounts that some countries have already begun to work on when that initial handbook came out in 2003 and they've been working on it for 15 or so years using the NPI satellite account criteria and the ICNPO classification system. A second reason why there's reason to switch or to use the ICNP-TSO as well is that it highlights social functions of TSE organizations by grouping industries performing similar functions. So it has a kind of functional feature to it that is very helpful for capturing the activities of TSE units. Thirdly, it expands the range of ICNPO to cover industries likely containing cooperatives and social ventures. So the ICNPO in its original form we didn't cover cooperatives and social ventures. And therefore the classification didn't cover the industries that were likely to have in them cooperatives and social ventures. Now we had to broaden it in order to take account of these other types of units and those other types of units are mostly active in industries and fields that are very different from the fields in which NPI's non-profit institutions are involved. And then finally, there has been an improvement in the concordance between the ICNPO-TSO and the other existing general classification systems. So we've made some adaptations and the adaptations have been on both sides. ISIC Route 4 is much closer to what ICNPO was originally structured to embody. There were many adjustments to the ISIC classification system in this revision four that have really picked up some of the things that we were suggesting should be split apart in order to capture as well the non-profit institutions and now the non-profit institutions as well as the cooperatives, mutuals, and social enterprises. So let's take a little look at the structure of the ICNP-TSO classification system. It has three levels of groupings, not dissimilar from some of these other structures. It has a broad level of differentiation by function of the units that are included and covered. It then gets down to a second level of the major industry that the unit embodies and then it gets down to subgroups within the industry. So here is a look at the major sections of the ICNP-TSO and this time I can call your attention to section C and D and you'll see that what the ICNP-TSO does is to break apart human health services and social services. These were put together in one large category in the earlier NACE and IC and ISIC classification. So it provides more differentiation precisely in the fields in which non-profit institutions are particularly active and this is very crucial in order to have a classification system that really does what you would want a classification system to do which is to differentiate the meaningful categories of types of activity, the entities you're looking at are engaged in. If you can't differentiate them then you're not truly using the classification system for what it is designed to allow you to do. So the ICNP-TSO even at the highest level has differentiations that are very helpful to allow us to see inside what the types of activities that these TSE and TSE units are performing. So that's at the level of the first category. This next slide shows you the next category level of differentiation. This looks within the section C which we saw before at the human health services and it identifies three categories of those services. Now this is at the middle level. So you see C10, C20, C30 and then a catchall category C90 human health services not elsewhere classified. And then within each of those it breaks it down further. So if we look at, let's just look easily at the hospitals C20, there are multiple different types of hospitals. There are general hospitals. There are specialty hospitals, psychiatric hospitals, substance abuse hospitals and many other types, heart-focused hospitals, et cetera. And then there are hospitals not elsewhere classified. So you can get down to a pretty fine level. And if you look at the C10 category ambulatory health services that is services that people can get simply by walking into and they're not overnight stays. You've got general ambulatory health care services. You've got specialized outpatient care centers. You've got emergency medical response. You've got medical and diagnostic laboratories. And then you've got this catchall ambulatory health care services not elsewhere classified. So these structures are the way in which we provide granularity to the understanding of the TSE sector that allow us to see what services they're engaged in and what the structure of the industries are that are represented by these components of the TSE sector. So this gives you a taste. I'm sure that you would need to study these structures more carefully. There is in the handbook, the TSE sector handbook, the satellite account handbook, much more detail on each of these classification structures, the pros and cons of each and some clues about how these classification decisions can be made. There are also crosswalks between these classification structures and both ISIC and NACE and NAICS which are the most commonly used classification structures in the world. The more we can be similar in the classification, the more we can draw comparisons across countries as well as across the different components of the economy. So let's turn now from the classification of institutional units and take a look at what we have in mind for what the handbook has in mind for the classification of the other component of the TSE sector, which is the individual activity and particularly volunteer work. And here again, we have two types of classifications possible. The first is very similar to the industry classification in the institutional unit universe. And obviously we can only apply that to the organization-based volunteer work because it's only at the level of institutional units that you can apply these industry classifications. You cannot apply that to an individual volunteer, for example, you could not say that that person is in a particular industry. So the two overlap in terms of the industry classification. So whatever you do in the case of the institutional units in terms of industry, you can also use the same structure for getting the industry of the volunteer effort. But the other type of classification system in volunteer arena is the classification by occupation. And this is very different. It's the kind of work that the person was doing. And if you remember back to what we said last time when we were looking at volunteers, we were also interested in the value of volunteer time. And the way we got to the value of volunteer time was to see what kind of occupation the volunteers were engaged in, what the average wage is for that occupation. And then we apply that average wage to the number of hours in order to come up with the value of the volunteer work. This is our replacement cost measure of the value of volunteer work. And so there are some standard occupational classification structures. And in the handbook that we are talking about the satellite account handbook for the TSE sector, we have embodied, we have simply brought into that handbook the existing occupational classifications, the standard classification of occupations revision 08. This is the latest version of the occupational classification in the international statistical system. And you can see that there are 10 different occupational classifications that are noted there. Managers, professionals, technicians and associate professionals, clerical support workers, craft and related trades workers, plant and machine operators, elementary occupations, et cetera. So there are a host of different types of major groups and then also within the major groups there are as well breakdowns of the different skill levels of the occupational workers in those different occupational categories. And here again, this is all laid out in detail in the handbook. There are discussions of the different types of classification structures, the different types of categories of occupations and some hints about how to apply the classification of volunteer work occupation to the volunteer effort that is taking place within the TSE sector handbook, TSE sector satellite account. So this concludes the structure of classifications, different classifications for institutional units and volunteers within each of those different classifications depending on whether it's based on the type of unit or the field in which the unit is working in the case of institutional units and in the case of volunteers differentiation on two bases as well. One on the basis of the industry which overlaps with the industry classification of the institutional units but also a classification based on the occupation and that occupation classification then becomes very crucial for our effort to put a value on volunteering because the wage rates for the different occupations are the vehicle that allows us to go from the number of hours volunteered to the value of the volunteer time using the replacement cost approach. So here as well, I wanna remind you again of what we have said in each of these sessions that we have been providing training and technical assistance to other statistical agencies as they work their way through the implementation of this new satellite account on the TSE sector of both institutional units and volunteers and we would be happy to work with your statistical agency as well. We do have a set of charges that we have to apply. It's not outrageous but it allows us to give you the kind of review effort that we hope will be useful to you in making sure that what you're doing in your country is really consistent with what other countries around the world are doing and we have a good idea about that because we've been working with so many countries already and have been deeply involved in working with the whole international community, statistical community and putting this handbook together and resolving all the issues that inevitably arise when you try to develop this kind of statistical apparatus that is integrated into the system of national accounts and therefore consistent with both the national accounts procedures but also sensitive to the characteristics of the field in which a new statistical handbook is being applied. So we appreciate your attention and look forward to taking up the next topic which will focus on the data items that need to be brought to bear. How do we find the data items? Where are they? And how do we bring them into the picture of the TSE sector in our satellite account work? So thank you so much again for your attention and I look forward to talking with you on the next version of these workshops.