Communiqué

Communiqué

Society's Third Pillar - the Nonprofit and Voluntary Sector - Shows Signs of Cracking Under Strain of New Funding Regime

OTTAWA, June 15, 2003 - Nonprofit and voluntary sector organizations in Canada are groaning under the strain of a new funding regime that seriously impedes their ability to perform vital work on behalf of millions of Canadians, according to a new study released today by the Canadian Council on Social Development (CCSD).

"Organizations are being forced to scramble more than ever to find financial support because their funding is increasingly unstable," said Katherine Scott, Senior Policy Associate at the CCSD and author of Funding Matters: The Impact of Canada's New Funding Regime on Nonprofit and Voluntary Sector Organizations. "And that disproportionate focus on fundraising - in a highly competitive arena - diverts them from their primary mission, which is to help meet the needs and enrich the lives of Canadians."

This study is the first in-depth examination of how the voluntary and nonprofit sector in Canada is coping after a decade of cost-cutting and restructuring by governments. A year in the making, the study's author consulted close to 200 representatives of nonprofit and voluntary sector organizations, public and private funders and funding experts from across the country.

The study details the day-to-day struggle for survival of many organizations forced to deal with the harsh realities of Canada's new funding regime. It reveals the enormous financial strain facing nonprofit and voluntary groups across Canada because of the short-term, project-based funding now favoured by governments and many other funders.

Nonprofit and voluntary groups support Canadians in many ways: they provide home care for the sick and elderly, shelter for victims of abuse, recreational programs for children and youth, support for the unemployed, and assistance to immigrant families. They advocate on behalf of marginalized people and offer myriad services and programs that help keep communities together. But unstable, short-term funding has forced many organizations to cut back or alter their programs.

"The short-term funding means some groups must hire and fire on a revolving door basis," said Scott. "It makes it extremely difficult for organizations to plan ahead."

Ironically, governments and other funders have scaled back their commitments to nonprofit and voluntary organizations, while relying on the sector to do more as public services are cut back or eliminated. As the baby boom population ages, demands for programs and services offered by the sector are bound to rise.

"One of the big questions is how long the status quo can continue before the foundation gives way and this third pillar of society - the nonprofit/voluntary sector - begins to crumble," said Marcel Lauzière, president of the CCSD. "Ultimately it is Canadians who will lose out."