The ongoing COVID-19 crisis has disrupted Canada’s charitable sector like no other challenge in living memory. Those working in the sector — whether for non-profits, charities, foundations, social enterprises or other organizations devoted to a social purpose — know first-hand the anxiety and stress of striving to provide vital services and support while facing uncertainty about their own financial future.
“Our thoughts are with people who need help today and the organizations providing it, while we also reflect on the need to think differently about addressing Canada’s social, environmental and economic priorities in the future,” said Stephen Huddart, President and CEO of the McConnell Foundation.
Sector leaders have expressed concern that our diverse sector is highly vulnerable to reductions in revenue. As has been widely reported, charities generally have limited cash reserves, little to no equity, and are usually ineligible for bank loans. The April 21 federal announcement of a $350 million Emergency Community Support Fund, as well as a previously announced wage subsidy, will certainly help. Prior to this, surveys by Imagine Canada, Ontario Nonprofit Network and others estimated that up to a third of charities would not be able to sustain operations beyond a few more weeks or months.
Individual donors and foundations are stepping up too. Nonetheless, many charities are making difficult choices — closing programs not deemed essential, cutting expenses wherever possible, and figuring out how to become more resilient. McConnell’s Innoweave initiative is offering a Leading Through Crisis support program, with webinars, online mentoring and a directory of other supports.
“Beyond emergency support, what’s needed now in the social sector are measures that will help foster resilience and innovation over the rest of 2020 and beyond,” said Huddart.
He called for two new sector-specific actions — a commitment by foundations to increase their disbursements to 5%, as recommended by the GIVE5 campaign, and the creation of a Sector Stabilization Fund. Huddart made the latter call in a public message shared by Senator Ratna Omidvar, Deputy Chair of the Senate Special Committee on the Charitable Sector that produced last year’s “Roadmap to a Stronger Charitable Sector”. The third urgent need is learning and collaboration to address COVID-19’s economic impacts while addressing the pre-existing crises of climate change and rising inequality.
1) GIVE 5 Campaign
Foundations are required by the Canada Revenue Agency to annually disburse 3.5% of their endowed assets. Given the dramatic increase in community needs caused by COVID-19, the McConnell Board approved an increase in this year’s disbursements from our usual 4% to 5%, and we have joined the GIVE5 campaign calling on all foundations to do so.
2) Sector Stabilization Fund(s)
To transition successfully out of the COVID-19 pandemic, the social sector will need a national intervention to deliver stabilization funds, including grants and low-interest, long-term loans (patient capital), as well as technical support to enable charities, non-profits and other social purpose organizations to rebuild their revenue streams and carry out service and business model innovation.
3) Toward new forms of learning and collaboration
While we look forward cautiously to governments’ relaxing COVID-19 self distancing rules over the short term, the effects of this crisis will be felt for a long time. Efforts to address its economic impacts challenge us to consider pre-existing crises of climate change and rising inequality. Not only is a return to “normal” unlikely, it is also undesirable, given challenges that include increasingly severe and frequent flooding and fires, lack of affordable housing, rising unemployment, biodiversity loss and our failure to reduce aggregate greenhouse gas emissions for the past 20 years. These chronic crises were already present and remain layered beneath the COVID-19 emergency.
We look forward to joining others in the search for more inclusive, sustainable and resilient paths forward – building on a renewed sense of social solidarity, and the realization that this is one of our last best chances to get things right for generations to come.
“History will show that Canadians responded with generosity, compassion and ingenuity to the COVID crisis,” Huddart concluded. “Hopefully, it will also show that we emerged from it stronger as a country, making accelerated progress on forging a sustainable economy, on social inclusion and equitable access to opportunity, and reconciliation with Indigenous peoples.”