COVID-19 Support: Getting the 'best bang for the buck'.

AuthorBroder, Peter

The COVID-19 pandemic has devastated charity and non-profit organizations' revenue sources to an extent rarely, if ever, seen before. Though some high-profile groups saw governments and the public funnel generous support to them and there have been a few clever online initiatives to raise money, that is just a small part of the story. The reality is that fundraising activities for many sector organizations have either been substantially scaled back or halted altogether. Gaming proceeds from casino nights that are budgeted and relied on by numerous Alberta groups have disappeared.

Those charities and non-profits, such as YMCAs, that offer products or services to part of their client base at market rates, and then use the proceeds to defray overhead, have seen sales dry up. This development, together with the fall in more traditional fundraising, is particularly troubling because funders--whether government or philanthropic--often remain only willing to fund direct service delivery or other frontline work. They expect agencies to find other ways to cover their infrastructure costs. Colloquially this is known as funding with 80-cent dollars.

Arts and cultural organizations that use ticket sales to fund their core operations are in deep peril. Even if they can find a way to recover from their revenue loss, and meet costs such as rent and utilities, with the gig economy workers on which they rely disproportionately hurt by the economic shutdown and with huge uncertainty about the willingness of audiences to return as we emerge from the crisis, prospects look glum.

Finally, most voluntary sector groups don't have investments, but those that do have seen the value of their holdings plummet. So, things are pretty lean there as well. There is an initiative--notwithstanding recent poor investment returns--to encourage foundations and other organizations with endowments to spend 5% of their portfolios this year, instead of the 3.5% mandated by the federal government. If that 5% goal was to become a standard widely followed, it would still cover only a miniscule fraction of the revenue gap currently being experienced by the sector.

One silver lining is that emergency relief programs from all levels of government are generally open to voluntary sector groups (or individuals associated with them) as well as the private sector. That is a positive because in the past it was not always the case that charities and non-profits were eligible for government...

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