The charitable sector is still struggling to stay afloat in the pandemic climate, despite having been covered by the federal wage subsidy and last week’s announcement of a dedicated $350 million fund, says a national organization representing charities.
In fact, said Imagine Canada president Bruce MacDonald, the sector needs a total of $10 billion in support from government to survive the pandemic.
Charities are facing a cash crunch; many are being hit with increased demand while their revenue sources are drying up. Imagine Canada’s initial projections indicate the COVID-19 pandemic will reduce charities’ revenues by between $9 billion and $15 billion, and lead to more than 100,000 layoffs.
“It’s pretty dramatic,” MacDonald told Power & Politics host Vassy Kapelos. “Most charities in this country are being profoundly affected by drops in revenues, by a need to change and adapt their services, by not having access to volunteers, many of whom delivered those services.”
Overall, the sector contributes 8.5 per cent of Canada’s GDP and employs 2.4 million people, he added.
Low on cash, no collateral
“Most charities don’t have reserves, or if they do, they’re very small and they don’t usually have access to bank loans because most don’t own buildings. They don’t have collateral that they can use,” said MacDonald.
Last week, Prime Minister Justin Trudeau unveiled the Emergency Community Support Fund, which gives $350 million in emergency grants to groups and national charities that help seniors, the homeless and others made more vulnerable by the pandemic.
The money will support services such as volunteer-based home delivery of groceries and medications, transportation and aid to vulnerable Canadians in accessing government benefits.
The funds will support community groups through national organizations such as United Way Canada, the Canadian Red Cross and the Community Foundations of Canada.
The need for needs-based grants
Charities can also qualify for the wage subsidy, which will pay up to 75 per cent of an employee’s wages for up to 12 weeks, retroactive from March 14 to June 6, as long as there has been a drop in revenue of at least 30 per cent.
It’s all welcome support, said MacDonald, but it’s not enough to stabilize the sector — which is why he’s asking the government to make up the multi-billion dollar gap through needs-based grants.
When asked about more funding, a spokesperson for Children, Families and Social Development Minister Ahmed Hussen said in an emailed statement on April 27 that the government will continue to work with the sector.
“Canadian charities and the nonprofit sector play an essential role in supporting Canadians during COVID-19 and we are here to support them,” said Jessica Eritou, outlining measures already announced, such as the wage subsidy.
“We will continue to work with these organizations to ensure they have the support they need to support Canadians.”
Jobs at risk
Some YMCAs may qualify for the $350 million emergency fund due to services they’re running, said YMCA Canada president Peter Dinsdale — but stabilizing its finances would cost about $90 million for six months.
YMCA laid off 20,000 staff nationally, said Dinsdale. Some of those people are now being rehired on the wage subsidy — but not all of them are coming back full time, he said.
“When you have the wage subsidy, but you have next to no revenue, the ability to keep your facilities there long term is very much in doubt,” he said.
When asked if there was a risk of YMCAs shutting down after the pandemic, Dinsdale said it’s possible.
“There is a risk in some locations that will be the case,” he said, adding that’s why they’re turning to the government for support.
Hitting a wall
Dawna Morey is executive director of The Lending Cupboard Society of Alberta, which loans out medical equipment. She said that while demand is down, the requests they get tend to be critical.
Her fiscal year ends June 30 and she said she is about $60,000 short in fundraising and donation efforts. The annual operating budget is about $500,000, and about two-thirds of that comes from grants and fundraising.
Without more support, Morey said, her organization will only be able to stay open for a few months.
“We wouldn’t be able to pay the staff, we wouldn’t be able to pay the rent after a few months,” she said.
Morey said she’s cut back on services where she can and has applied for the wage subsidy, which she supports. She hasn’t replaced a departing marketing staff member — which cut costs but also reduced her organization’s fundraising ability.
Halifax-based Brigadoon Village gets about two-thirds of its operating revenue from donors, said executive director David Graham. It pays for camp holidays for children with disabilities.
The wage subsidy means it doesn’t have to lay off any full time staff, but finances are still tight — in part because the organization owns and operates its own facility.
Most of its spring program was cancelled due to the pandemic, although parts continued virtually. The summer program is still up in the air.
“Financially, we have seen significant impact on the dollars coming in the door to support our operations,” he said. “With the loss of our spring program, that’s a significant amount of money that would have helped to support the summer program that’s now gone.”
Watch the full interview.