The 12th meeting of the International Roundtable on Business Survey Frames
Helsinki 28.9. - 2.10.1998
Session No.
7
Paper No.
1
Country: Hungary
Non-profit Sector Statistics in Hungary
Eva Kuti and Peter Pukli
HCSO
Historical Overview
1.
Statistics on voluntary associations has a long tradition in the Hungarian
statistical service. The first two surveys took place in 1862 and 1878, the first
one was carried out by the Statistical Committee of the Hungarian Academy of
Science, while the second was completed by the HCSO. In this initial phase the
statistical data collection had two equally important functions: the results of the
surveys provided data for statistical analyses and also served as a register of the
associations. The supplied information (the name, address, activity, date of
foundation, number of members, income, expenses and property of the
association) apart from satisfying the inquiries of the contemporary users of
statistics provide a useful source for historical analysis, since the HCSO
repeated the voluntary association survey in 1932, 1970, 1982 and 1989 with a
similar content. Unfortunately, no survey of a similar scale is available about
foundations.
2.
After the political changes of 1989 striking development has taken place in
voluntary activity in Hungary. The new legal environment created for
associations and the numerous tax advantages offered to them resulted in an
unexpected growth of the non-profit sector. The scope and scale of the changes
were clear signs of the citizens’ intention to actively and directly influence the
transition process. The number of NPIs was five times higher in 1997 than it
was in 1989. Similar development has taken place in the population of the
market sector. Many new units were born and the ownership and activity of the
old units of the former state sector have changed significantly.
3.
Monitoring the above mentioned movements and judging the borderline cases
between the market and non-profit sectors were great challenges for the
statisticians. The experts of the HCSO realized that the former survey frame
could not any longer be used for estimation of the performance of the whole
non-profit sector. This is why an annual general survey and a set of satellite
surveys of NPIs had been developed and the first full-scale survey relating to
NPIs was implemented in 1992.
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1. table
The number of NPIs in Hungary between 1862 and 1996
Year
1862
1878
1932
1970
1982
1989
1990
1991
1992
1993
1994
1995
1996
Foundations and public
law foundations
Voluntary associations
and other non-profit
organizations
Total
.
.
.
400
1 865
6 182
9 703
11 884
14 216
15 650
17 109
319
1 917
14 365
8 886
6 570
8 396
14 080
17 869
21 528
22 926
26 107
27 685
28 207
.
.
.
8 886
6 570
8 796
15 945
24 051
31 231
34 810
40 323
43 335
45 316
Concepts and scope of NPIs in the Hungarian statistical practice
4.
To be in line with the SNA concepts and definitions was a fundamental aspect
when the statistical system of the NPIs was developed. To define whether a unit
is a market NPI serving business or an NPI controlled by government or an NPI
serving households was an important issue in the developing work of the
methodology of NPIs statistics. The classification of the units according to the
SNA sectors are supported by the relevant characteristics of the annual survey of
NPIs (the sources of incomes and receipts).
5.
The definition of the non-profit sector as generally applied in international
practice includes the following elements:



Prohibiting the distribution of profit
Non-profit institutions differ from the companies of the market sector in that
they do not distribute the arising profit of their activities among the founding
members or units that established, financed or created them.
Independence
This independence designates primarily a functional, economical and
management autonomy. They are legal entities, whose existence is recognised
independently of the persons, corporations on government units that establish,
finance, control or manage them.
Institutionalisation
The direction of NPIs is done by a group of officers or a body elected by the
members. Their operation rules are documented.
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6.
At the beginning there were only two legal forms for establishing non-profit
units: the association and the foundation. Since 1994 on the basis of the Civil
Code new forms have been introduced such as public law foundations, public
law associations and public benefit companies.
7.
Associations are autonomous organizations formed voluntarily for a purpose
agreed upon by their members and stated in their founding articles. Associations
must have registered members who organize to actively pursue the associations'
aims. Although membership organizations are not necessarily called voluntary
associations and special laws and government decrees apply to some of them,
the basic legal regulation of voluntary associations nevertheless applies to all
such organizations including professional societies, sports clubs, self-help
groups, trade associations, chambers of commerce, trade unions, social or
cultural clubs, and so on. The organizations can be formed around common
hobbies, personal problems, age, interests, residence, support for particular
institutions, concerns, professions or occupations.
8.
Foundations are organizations with endowments established to pursue durable
public purposes. Their founders can be either private persons, corporations or
government. Unlike associations, foundations do not have members. They can
take many different forms, however: operating foundations (e. g. foundations
operating schools, nursing homes, health and cultural institutions; providing
social services; publishing books and journals; managing cable television
networks and local radio stations, etc.); "fund-raising" foundations exclusively
supporting public institutions such as libraries, theatres, museums, schools,
universities, hospitals, or research institutes that established them; other group
of "fund-raising" foundations pursuing particular aims or projects such as the
creation of monuments, organizations of festivals, or development of art
collections; grant-making foundations that support either projects or
organizations; and corporate foundations mostly supporting present or former
employees of the company.
9.
Public law foundations are established to take over some government tasks, i. e.
tasks which are defined in law as government responsibilities (e.g. education,
healthcare, public safety, etc.) Their founders can only be the Parliament, the
general and local governments. The public law foundations are kept financially
accountable by the State Comptroller's Office.
10.
Public law associations can only be created by the Parliament through passing a
specific law on their establishment. The Academy of Sciences , the Chambers of
Commerce, and chambers of some professions (e. g. doctors, lawyers, architects,
etc.) have been transformed into public law associations since the creation of
this legal form. The government may let public law associations exercise some
authority over their members (e. g. official registration, quality control, the issue
of licenses, etc.)
11.
Public benefit companies are not-for-profit organizations established in order to
produce public goods and to meet public needs. The profit of their occasional
unrelated business activities must also be used to pursue their public purposes.
4
They are not allowed to distribute profit to their owners. They can be established
by either private persons or organizations.
12.
For the statistical analyses NPIs are classified into five groups, as it follows:
2. table
The structure of NPIs by legal forms, 1996
Type of NPIs
Number of organizations
Foundation
Associations
Of which
Trade unions and other organizations representing
the interests of employees
Chambers of Commerce and other trade
associations representing the interests of
employers
Public law foundation
Public law associations
Public benefit companies
16 392
27 245
Total
45 316
1 985
1 023
717
618
344
Statistical surveys on NPIs
13.
As it was mentioned a new annual survey was introduced in 1992 to compile
statistics on the NPIs. Since then both the methodology and the questionnaire
have been modified but the majority the characteristics has remained unchanged.
14.
The survey covers all types of NPIs. Beside the identification part (name
address, ID code, etc.) the list of characteristics is divided into three modules. In
the first module characteristics concerning the legal form, number of members,
number of persons employed and the activities of the unit can be found. In the
second module income and expenditure data are requested. In the third module
characteristics concerning the financial, non-financial assets and liabilities and
the investments are titled.
15.
Hungarian non-profit sector compared to the NPIs in the developed countries
has some specific characteristics. The most striking of these differences is the
relatively low share of the Hungarian voluntary organizations in health and
education, which are the most important fields of activities of non-profit
organizations in the developed countries. This difference is explained by the
state monopoly of education end health care under state socialism. While
5
voluntary organizations as service providers were tolerated in culture and even
promoted in sports, recreation and emergency prevention, they were not allowed
to establish schools and hospitals. Although this state monopoly was broken in
1989, the non-profit service provision could not rapidly develop because it
would have needed a lot of investment and there was very little capital available
for the possible non-profit entrepreneurs. Similarly, the state monopoly of
housing and urban services prevented Hungarian NPIs to play a more active role
in development and housing, and thus contributed to keep their share relatively
low in this field compared to other countries.
3. table
The structure of NPIs by fields of activity, 1996
Fields of activity
Number of organizations
Culture
Religion
Sport, recreation, hobby
Education
Research
Health
Social services
Civil emergency prevention, fire-fighting
Environmental protection
Development of settlement
Economic development
Public security, protection of laws
Granting for public purposes
International relationships
Business federation
Politics
4 680
1 227
14 404
5 105
959
1 913
3 496
1 134
984
1 673
672
1 746
701
618
5 396
608
Total
45 316
16.
In 1997 45 000 questionnaires were sent to the respondents. The non-response
rate was very high, only 22 000 forms were returned. In the case of such a high
rate of non-response the usually used "cold-deck" and "hot-deck" imputation
technics can not be applied for production statistics. In order to gain acceptable
estimation on the performance of the non-profit sector a sophisticated
multiplying system was developed. The NPIs were classified according to their
legal form, their activities and the types of their location (capital, towns or
villages). Multipliers were calculated for each cell of the matrix table and were
used to estimate the main indicators of NPIs.
6
The present statistical register of NPIs
17.
The official registration of NPIs is conducted by Supreme Court with the
exception of public benefit companies which are recorded by Court of
Registration. NPIs are obligated to report on the changes relating to their
operation to one of the previously mentioned courts. Unfortunately, the
registration rules do not specify the detailed procedure referring to making
reports on changes and in practice there is no legal consequence in default of
sending updated information to the courts.
18.
The computerised register of the Supreme Court contains the following
information:
 the serial number of registration,
 the name and address of the organisation (the changes in name of streets and
settlements have not been updated),
 the date of registration and closing-down (in most cases there is no information
about closing-down),
 the name and address of person(s) representing the organisation.
19.
The register of SC is available for the HCSO and an essential but not a sufficient
data source for the statistical work as it was justified by the experiences from the
non-profit surveys.
20.
The non-profit register of the HCSO contains the data of all NPIs. The register
serves three purposes:
 compiling the list of address for the dispatching of the questionnaires,
 provides fundamental information relating to the non-profit sector (number of
organisations, forms of organisation, their location and field of activity) for
statistical analysis,
 provides leading indicators for estimation.
21.
The primary source for the statistical register is the computerised register of
NPIs conducted by the Supreme Court. This is where the primary data relating
to the newly registered organisations originate from, together with the rare
information supplied to the Court about changes in the data of organisations.
After the transportation of data to the statistical database the activity code of the
organisation is determined by statistician experts based on the brief description
of activity in the Supreme Court file. The organisations are informed about their
activity code when the annual questionnaires are sent out and they are required
to confirm it or to indicate if they find it unsatisfactory, in which case they are
requested to provide a detailed description of their activity to make the
classification more accurate.
22.
To complement the files coming from the Supreme Court and for the
maintenance of the NPIs register three different sources are used:
7
 23. The Business Register of the HCSO which contains NPIs recorded by the Tax
Authority. The link of the Business Register and the Register of the Supreme Court
is hindered by the lack of a common identifier enabling the connection via the
computer. For establishing link between the two registers the name and the
location of the NPI can serve as guidance. This means manual rather than
computerised work because of the numerous divergences in spelling and formatting
or the inaccurate use of names. However, when the link is successfully established
the information provided by the Business Register can be utilised not only for
updating the NPI register but the statistical database of NPIs as well since there are
plenty of NPIs who notoriously reject answering the statistical questionnaires but
sustain a regular relationship with the Tax Authority.
 24. The annual non-profit surveys which provides all identifying data of the units.
Based on the obtained answers the data of register are controlled and some
additional parameters such as statistical ID code, telephone number, electronic mail
address are recorded. Information about the termination or suspension of their
activity is registered, even if no official announcement has been made toward the
Court. (There are over 4.000 NPIs in the Supreme Court Register, although the
news about their termination had been communicated toward the HCSO.) There are
also a few thousands NPIs from whom no completed questionnaire has been
obtained since 1992. These are theoretically existing organisations since the
questionnaires are delivered to them by post year after year, but the relating data in
the register cannot be updated, their existence is not confirmed.
 25. Finally, useful sources for the maintenance of the Non-profit Register are the
journals, official lists of addresses, newsletters that are published by the NPIs
themselves or their umbrella organizations.
Experiences and conclusions
26.
The most important experiences of the annual surveys can be summarised as
follows:
 27. The majority of the NPIs are small in size so they have no staff for
bookkeeping or any other administrative work. The annual questionnaire of HCSO
having 63 characteristics is a heavy burden for respondents to fill in. This is the
main reason of the rather high non-response rate. Instead of the present exhausting
(inefficient) full scale survey a stratified sample survey should be designed on the
basis of the revised and updated register.
 28. Taking the heterogeneity of the sector into account the use of unified form is
not a proper solution for surveying their service activities in detail. These questions
should be included in tailor made forms in each type of NPI.
 29. During data editing and processing statisticians must use sophisticated crosschecking and validity checking techniques to improve the bad quality of data
caused by the lack of expertise of the respondents.
8
 30. The administrative work of foundations functioning in connection to schools,
hospitals or companies is often done by the “mother institute”, who frequently put
its own ID number on the questionnaire instead of the ID code of the foundations.
The same mistake often occurs in the case of local organisations being independent
legal entities but they have a main headquarters.
 31. There is a great number of NPIs who neither respond to the statistical
questionnaires nor maintain any relationship with the Tax Authority, consequently
no data is available about them even in the Business Register. It shows that the
official register of the Supreme Court itself could not provide a proper survey
frame for the data collection: since it is not updated it contains a number of dead
units and some important parameters (type of activity) are missing.
 32. The principal step in the improvement should be to develop the co-operation
with the Supreme Court in order to build up a bridge between the SC register and
the BR of HCSO with the help of the ID code number.
 33. On the basis of Economic Census 1997 the NPIs register have to be revised and
should be inserted into the Business Register. New round of investigation should
be implemented supported by interviewers to make contact with the units which are
not included in the BR and gave no answer to the annual questionnaire. For the
new units "register updating" questionnaire should be sent requesting the
parameters missing from the Supreme Court register.