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| September 22, 2003 |
Vol. 8, No. 1 |
Funding Matters: A Warning And An Opportunity
Fact Sheet #1: The Third Pillar Of Canadian Society
The Canadian Council of Social Development (CCSD) has produced a seminal
report, "Funding Matters: The Impact of Canada's New Funding Regime on
Nonprofit and Voluntary Organizations." This study analyses changing
funding patterns throughout Canada and their impact on voluntary sector
organizations. The findings of this study compliment the results of
community-based research conducted in Halton in recent years that identify major
funding issues and their consequent impact on the quality and accessibility of
community services. Community Development Halton has prepared five Community
Dispatches of the Fact Sheets prepared by CCSD for the June 2003 launch of their
study. I believe this information is essential for all those in leadership roles
in the nonprofit and voluntary sector. Furthermore, a workshop, Funding
Matters: A Warning and An Opportunity, for senior managers, Board members,
funders and concerned citizens is planned for Tuesday November 25, 2003.
Katherine Scott, author of the CCSD report, will give the keynote address.
Details will be available shortly.
Joey Edwardh
The Nonprofit And Voluntary Sector - A Vital Piece Of Canada's Social And
Economic Fabric
More than 900,000 Canadians work for nonprofit and voluntary sector
organizations (other than hospitals and universities). Every year, Canadians
donate an estimated 1,000,000,000 (one billion!) person-hours to voluntary
activities - the equivalent of more than 500,000 full-time jobs.
Nonprofit and voluntary groups play a key role in enriching the lives of
Canadians by delivering myriad programs and services, including home care for
the sick and elderly, shelter for victims of abuse, recreational programs for
children and youth, and assistance to immigrant families. They also enliven our
cities with cultural events and advocate on behalf of marginalized people.
This sector has been characterized as the third pillar of society, alongside
government and the private sector. Nonprofit and voluntary organizations play an
essential role by promoting active citizenship and building bridges among
communities and cultures.
Q. So how has the funding regime changed for these groups?
A. The big change revolves around how they are getting their dollars.
Organizations rely on a mix of sources and funding mechanisms: government
contracts, foundation grants, donations, charitable gaming revenues, and money
from the sale of goods and services. Despite efforts to pursue many different
sources of funding, our survey shows that financial volatility and uncertainty
has actually increased over the past five years.
Historically, governments have been the biggest funders by providing direct
support, or "core funding," to nonprofit and voluntary groups which
has allowed them to pursue their missions and cover basic organizational and
administrative costs. Such grants also enabled the organizations to pursue other
funding for specific programs and services. In the 1990s, however, governments
cut their direct support to many organizations - a move that forever changed the
relationship between funders and the sector.
A new funding regime has taken shape:
- Nonprofit and voluntary organizations have succeeded in broadening their
funding base. But the state remains the largest - and increasingly
unpredictable - funder. (Government money still represented about 60% of
total revenues among the organizations surveyed for this study.)
- Funders now favour short-term, project-based funding.
- Funders attach more conditions to their contributions. They target their
funding and exert greater control over its use.
- Pursuing diverse sources of funding involves greater complexity for
nonprofit and voluntary organizations. For example, having to focus on
earning income in order to stay afloat can pull groups away from their
primary mission. And the growing pressure on them to adopt
"market" models of operation threatens to obscure the unique value
of their programs and services.
- This volatile funding environment threatens the long-term sustainability
of organizations. It also threatens to undermine the unique contributions of
the sector by eroding the close ties these groups share with their
communities, by weakening their voices as advocates for marginalized people,
and undercutting Canadians' involvement in the democratic process.
For more information on Funding Matters: The Impact of Canada's New
Funding Regime on Nonprofit and Voluntary Organizations, visit the CCSD
website at: http://www.ccsd.ca/pubs/2003/fm/
 PDF:
180 k
Produced by Community Development Halton
860 Harrington Court
Burlington, Ontario L7N 3N4
(905) 632-1975, (905) 878-0955; Fax: (905) 632-0778; E-mail:
office@cdhalton.ca
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