Nearly two years after the COVID pandemic began, businesses and organizations across all sectors continue to struggle to survive. That is particularly true for charities, which have been dealt a double whammy of lost revenues from donations and events and volunteer hours, amid rising demand for services.
“It’s been a tough time for the sector as it has been for other parts of society,” says Bruce MacDonald, President and CEO of Imagine Canada, in an interview with Perspectives.
“It’s like the sector is caught in a vise grip,” he said.
Revenues and demand
In an update compiled last August by Imagine Canada on how the pandemic is affecting the charitable sector, nearly half of organizations reported a decline in revenues of on average 44%. The report noted that the same percentage of charities and non-profits were experiencing increased demand since the onset of the pandemic, up from about a third in 2020.
Imagine Canada, a national organization that works with and on behalf of Canada’s charities, non-profits and social entrepreneurs, noted in Sector Monitor: The uneven impact of the pandemic on Canadian charities that nearly 18 months into the pandemic 78% of charities are still operating with modifications, including mitigation measures intended to keep staff, volunteers and clients safe from infection, and suspending programs or developing and delivering new ones, while 7% have suspended operations altogether. Only one in seven organizations is operating as usual.
According to the report, nearly 15% of charities saw a significant drop in demand, largely due to public health restrictions, that resulted in average revenue losses of 45.5%. Almost a quarter of those organizations believed their financial situation would worsen over the next few months and a third said they could not sustain operations for more than 12 months.
An uneven recovery
Mirroring the economy, charities are following a K-shaped recovery, where some industries or demographics recover (forming the upper arm of the K), while others stagnate or continue to decline (forming the lower arm). In the case of charities, those that have seen both supply and demand collapse make up most of the bottom half of the K, MacDonald noted. “On the upper part of the K are organizations that serve immediate needs and have high visibility, such as food banks, mental health advocates, and those helping domestic abuse victims, which saw a rise in demand during the lockdowns and also an increase in support during the lockdowns,” he said.
Among organizations hardest hit are non-profits that serve the arts, culture, sport and recreation, which rely on in-person services — filling seats at a theatre performance or monthly payments from gym memberships at the YMCA, for example — to generate earned revenues. “When the demand collapsed, earned revenue disappeared,” MacDonald said.
Imagine Canada’s data shows that 75% of organizations have seen a decline in at least one form of fundraising or revenue, that include in-person events such as galas and marathons; canvassing; and earned income, which MacDonald said is an enormous source of revenue for the sector. Even if special events were done virtually, they did not generate as much revenue, he said.
MacDonald noted that while Imagine Canada doesn’t have access to real-time data, there are indications that online giving has increased, “but we don’t think it’s up enough to compensate for the losses we’re seeing.”
 Photo: Bruce MacDonald, President and CEO of Imagine Canada |
Scotiabank steps up support
Recognizing the challenges the sector has faced and the uneven economic toll it has had on disadvantaged groups, Scotiabank continues to support various charities and programs, through ScotiaRISE, a 10-year initiative with a $500-million commitment with the goal of fostering economic inclusion and resiliency among disadvantaged groups.
In 2020, Scotiabank stepped up its support of the Canadian Women’s Foundation, an organization it has been a partner of since 1994, with a gift of $200,000 over two years. “Our partnership with the Canadian Women’s Foundation has allowed the foundation to continue to help disadvantaged women through the community organizations it works with at a time when they need it most,” said Karen Soos, Director, ScotiaRISE, Scotiabank.
“The pandemic has not only had a devasting impact on many women’s economic well-being, but also has strained the ability of local community-based programs for women to supply the needed services. Helping these programs remain operable and adapt to a virtual way of operating is essential,” she said.
The funding in part is being used to help these strained programs remain operable in the pandemic context and adapt to virtual programming to continue to build women’s economic security, employment skills, and digital literacy.
“Many women struggling with financial fallout today rely on local women’s programs to help them build their economic stability,” said Paulette Senior, President and CEO of Canadian Women’s Foundation.
“And we know that women with disabilities, racialized women, immigrant women, and others who face high barriers are affected most of all. Scotiabank’s response to the gendered impacts of the pandemic has been so critical, because 30 years of progress on gender equality in Canada is at risk. It’ll take decisive action like this to ensure diverse women and their children and families don’t get left behind in 2022 and beyond.”
Volunteer and staffing
Another challenge charities face is the loss of volunteers and the subsequent staff burnout. In many cases, the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) allowed organizations to keep staff on that they otherwise would have had to let go, MacDonald acknowledged. With those programs ended, MacDonald is hoping that as Ottawa considers economic recovery in terms of businesses, charities and non-profits are not left behind.
MacDonald also worries that the replacement program, the Canada Recovery Hiring Program (CRHP), won’t be enough to keep harder-hit non-profits going or support as many organizations, because the criteria to qualify are different.
“We want to make sure that as government is supporting other sectors of the economy, they’re also supporting this one,” he said.
In the early days of the pandemic, volunteerism dried up, and while the availability of personal protective equipment, vaccinations, and adapting programs to deliver services differently has brought back some volunteers, the numbers have not yet returned to pre-pandemic levels. That means the staff who carried the load are facing exhaustion and burnout.
“Movie theatres, restaurants, event spaces and other things shut down; charity for the most part, didn’t,” MacDonald said. “They provided services, just with fewer resources.”
In its August monitor, Imagine Canada noted that 59% of organizations expected staffing levels to stay the same, while 29% expected to have more staff in the coming months. However, with cases rising rapidly heading into 2022, MacDonald suggested resources could shrink rather than increase as charities and non-profits don’t see revenue streams returning anytime soon.
Adapting to survive
According to MacDonald, organizations that are riding out the pandemic a bit better, tend to share a core competency in adaptation and change. Going forward, he said, organizations will need to think strategically and intentionally; and build systems programs, fundraising programs, and engagements with volunteers that can adapt quickly to fundamentally changing times.
To support that change, Imagine Canada is looking forward to the rollout of the $400-million Community Services Recovery Fund that was announced in last April’s federal budget and was recently reaffirmed.
If there is a silver lining in the pandemic MacDonald said, it’s that the sector now has a higher level of engagement and visibility. With more families accessing services provided by charities and non-profits than ever before, he hopes that communities will see value in maintaining them.
“The kind of society we live in is because of a tri-part relationship: Government does its part, business does its part, and the charitable sector does its part. Perhaps the latter side of the triangle is about to get a bit bigger,” he said.
