Charities can help Canada rebuild from the pandemic — but only if they get the help they need to survive

Since the onset of the COVID-19 pandemic, Canada’s human service sector has mobilized to serve community members at a time of widening inequities. Human service organizations like ours were already supporting mental and physical health, food security, skill-building, employment readiness, childcare, social connections, programs for the elderly and much more, making us well positioned to help individuals and communities cope once the pandemic struck.

We have helped to mitigate many of the worst public health outcomes, to level some effects of long-standing social inequities for historically marginalized groups, and to strengthen community capacity and an ethic of care for people in vulnerable circumstances.

But as the pandemic drags on, and the health, social and economic impacts on communities intensify, human service organizations are struggling to raise the general operating support — funding that supports operations and infrastructure rather than programs — that is vital to sustaining our organizations and our ability to meet the increased demand for programs and services. Over the last year, revenues have decreased dramatically due to cancelled in-person fundraisers, reductions in corporate support and cuts to fee-for-service programming.

For instance, BGC Albion (commonly known as Boys and Girls Clubs), in Etobicoke, holds an annual gala to raise funds for general operating support. These funds are used where they are needed most: to ensure the club can continue to respond to the ongoing and changing needs of its community. The event normally raises an average of $60,000 for general operating support; this past December, a virtual gala netted only $25,000. This came as demand for programs and services has surged over the past year. The club is now serving 10 per cent more children, youth and families compared to 2019, has expanded food-security programs, and delivered devices and data access to support online schooling and virtual after-school programs.

At the YMCA, meanwhile, health, fitness and aquatic memberships and fee-for-service programs accounted for the largest portion of revenue pre-pandemic. This funding helped to cover critical operational expenses, including employee benefits and facilities maintenance, and to create vital programs to meet community needs. Today, the YMCA has seen a 40 per cent decrease in revenue due to lockdowns and restrictions on in-person programming, causing significant challenges in managing expenses — many of which are new and increasing in light of COVID-19. As a result, YMCAs have been forced to make difficult decisions to support their balance sheets, including the sale and closure of 14 facilities in Alberta, Saskatchewan and Ontario, and the complete closure of a YMCA Association in Yarmouth, N.S.

With so few sources of general operating support, these declines add serious challenges to an essential sector that was already under stress. As the Task Force for Women in the Economy advises the federal government on a feminist, intersectional action plan in response to the pandemic, the role of human service charities should be at the forefront. With a workforce composed of 70 per cent women serving more than 5,000 communities, our agencies will be central in driving a she-covery.

Additionally, the Minister of Families, Children and Social Development, Ahmed Hussen, has been instructed to work with charities and non-profits to modernize the sector, providing the tools they will need to support the government’s rebuilding commitments.

With human services infrastructure so central to rebuilding equitably, we are calling for a temporary bridge funding program for community and human service charities and non-profits in this year’s federal budget so we can meet the unprecedented demand for our services and continue to support communities in the social and economic recovery we all need and deserve. This funding would also be a necessary bridge to the sector modernization efforts led by Minister Hussen.

Less revenue, more demand

Human services charities have unique economic models that do not benefit from the same supply-and-demand system of economics as the private sector, nor do they have the capacity to accumulate the resources they need to respond in times of need, such as during the COVID-19 crisis. Increased demand for programs and services means more dollars out the door, not in. Meanwhile, many donors frown on cash reserves — they require their dollars to be used for today’s most pressing and urgent needs. When tough times come, organizations need strong balance sheets to survive, but charities too often operate in a cash in-cash out structure.

The Government of Canada has offered some welcome supports to help the sector cope with the pandemic. The Emergency Community Support Fund enabled human service charities to quickly scale up emergency programs, but only temporarily. The Canada Emergency Wage Subsidy (CEWS) has been a lifeline to human service charities, allowing them to retain many dedicated staff members.

But these supports have not gone far enough to offset the devastating losses to community and human service charities. After accessing relief programs, the YMCA still lost more than $320 million in revenue from March to November 2020 compared to the same period in 2019 — a drop of 40 per cent. And even with the CEWS, Big Brothers Big Sisters has had to cut its workforce by 29 per cent.

Frontline human service charities are still facing serious fiscal challenges that have not been addressed by federal programs to date and are severely limiting their capacity to deliver services to communities that have borne the brunt of COVID-19’s impacts. A continued response to this crisis demands more.

Community agencies have always struggled to fundraise for operating support. The reality is that donors do not want to pay for the pots and pans that cook the food, the light bulbs overhead or the staff who organize the volunteers who distribute food to vulnerable community members. Now with COVID-19, the struggle to fundraise and earn revenue to cover these costs is exponentially more difficult, while service expenses have surged.

Human services organizations are retrofitting their spaces to create safe cohorts of children in compliance with public health guidelines, installing plexiglass, and recruiting and training more frontline staff to cover shifts for those who are off sick or need to self-isolate. These and other operating costs add up. Data shows that more than half of charities and non-profits are reporting a decline in revenues and a third are seeing demand grow faster than their organizational capacity.

The Community Services COVID-19 Relief Fund

Human service charities are proud members of our shared economy. We have supported vulnerable community members for centuries and done so while balancing our books. Today, we need a bridge back to sustainability as we modernize for our new normal. We are calling on the federal government to create a Community Services COVID-19 Relief Fund that will provide a temporary 18-month bridge to support the ongoing work of organizations providing frontline human and community services during the pandemic, and resources to modernize our sector for the future.

The proposed CSCRF consists of two elements at a one-time cost of $500 million to $700 million:

1. A Bridge Operating Grant that provides targeted operational support and addresses gaps in fixed costs not covered by other government programs over the next 18 months. To access this fund, human service charities would need to demonstrate loss of revenue and a change in operating costs due to COVID-19, and pass a sustainability risk assessment, similar to the Veterans Organizations Emergency Support Fund. This would sustain vital programs and services while protecting important community facilities for future generations.
2. To improve our sector’s resilience, a Transformation Fund is needed to spur program and operating model transformation. This modernization would include technological and data advancements that improve service delivery and allow organizations to look at new operating models (mergers, amalgamations, technology infrastructure) that will ensure more resilient organizations with modern systems and strengthened community-level planning.

Our organizations are highly accountable, financially transparent and trustworthy, and are deeply embedded in communities across Canada. Millions of Canadians know and rely on us.

Human service charities have adapted to COVID-19, but we are stretched thin. Without urgent support from the government to help us survive the next 18 months and make it to the other side of the pandemic, there will be a gap in Canada’s social safety net. People in need will not get the help and support they deserve.

It is far more costly to have people fall through the cracks than to maintain and strengthen the existing infrastructure of human services now available. Support from the federal government is an investment in emergency response today, recovery tomorrow and the resiliency of our communities into the future.