Non-Profit Institutions Serving Households (NPISH) are sports clubs, unions, churches, charities helping the poor and similar bodies. As the name suggests, to be in this sector, a group must be not-for profit and must also be serving Households for free. There are some institutions that are not set up to make a profit, but which sell their services on the market. For instance, a publisher might only wish to cover their costs and not make a profit, but if they sell their books at the normal market price, then they would not be in this sector.
There are also some not-for-profit institutions like hospitals which we treat as part of the Government sector and not NPISH, because their income comes from Government sources, and they provide services as directed by Government agencies (the HSE for hospitals).
The Final Consumption Expenditure of NPISH on providing goods and services to households is counted in GDP when we estimate it by the Expenditure Method.
As we mentioned in GDP, National Accounts only takes into consideration economic exchange. So the volunteer work in the non-profit sector is not meant to be included in these accounts.
We commonly treat the NPISH sector and Households together as one sector, because the NPISH sector is economically small, and much of its income comes from households and much of its expenditure goes to households.
