Challenges and Opportunities for Ontario’s Not-for-Profit Sector During Tough Economic Times

Challenges and Opportunities for Ontario’s Not-for-Profit Sector During Tough Economic Times
From the Ontario Trillium Foundation

Download the full report here (PDF format).

Executive Summary

Ontario’s not-for-profit (NFP) sector faces the current recession, and the challenging times ahead, with a mixture of fear and trepidation, tempered with a sense of opportunity.

Challenges and Opportunities for Ontario’s Not-for-Profit Sector During Tough Economic Times
From the Ontario Trillium Foundation

Download the full report here (PDF format).

Executive Summary

Ontario’s not-for-profit (NFP) sector faces the current recession, and the challenging times ahead, with a mixture of fear and trepidation, tempered with a sense of opportunity.

The signs are clear. The economic crisis facing this country is more serious than anything we have experienced in decades. The business pages of our daily newspapers tell of a sinking stock market, declining corporate profits, and massive employment lay-offs. Governments at all levels are busy developing stimulus packages without knowing for sure whether they will do the trick.

While most of the headlines talk about the recession’s serious impact in the corporate and government sectors, little has been said about the not-for-profit sector. This is probably because the sector is usually quiet, relatively modest, and highly diversified. That said, the role of the sector – which incorporates everything from children’s mental health agencies to hospital foundations, after-school youth programs to seniors’ clubs, and environmental protection agencies to arts programs for under privileged kids – is more important than ever in
these uncertain times.

Early this year, the Ontario Trillium Foundation (OTF) set out to have in-depth conversations with more than 100 NFP organizations across the province. We spoke with a wide range of organizations, large and small, in every region of Ontario. The organizations in our survey do important work in the arts and culture, environment, social services or sports and recreation areas. We asked what they were experiencing, what impact the economic downturn was having on their communities, and how OTF can effectively help. What we heard was clearly cause for concern.

There is a heightened sense of anxiety about funding and organizational stability, even survival, over the next two or three years.

  • At least one-third of the organizations we spoke with are already experiencing serious economic impacts, and all fear that things will get worse before they improve.
  • NFP organizations are hearing that many long-term funders, including many United Ways, Community Foundations and family foundations will be reducing their granting programs in 2009 and 2010.
  • Stock market declines have had a severe impact on the value of endowment funds that many NFPs have been carefully building for years.
  • Corporate donors and sponsors are frequently not renewing their support.
  • A number of social service agencies – such as food banks and credit counselling agencies – report significantly increased demand for their services.

It is not all doom and gloom, however. Ontario’s not-for-profit sector has weathered storms in the past, and leaders in the sector are busy discussing survival strategies.

  • Umbrella groups and networking groups are bringing their members together, to share best practices.
  • Agencies are looking for new ways to collaborate with one another.
  • Charities are looking at diversifying their fundraising base, and also at opportunities to generate new revenues.
  • Concerned funders – such as foundations and United Ways – are actively engaged in explorations of how to have greater impact with fewer dollars.
  • Everyone is looking at ways to reduce costs – to do more with less.

There’s no question that the NFP sector will need help. Survey respondents had a number of specific suggestions for us at the Ontario Trillium Foundation.

  • OTF is asked to take on a greater role in sharing best practices and in convening NFP groups across the province, to help organizations learn from one another.
  • Groups would welcome support and assistance for finding new ways to collaborate with other NFPs focusing on the same social objectives or population groups.
  • OTF is asked to look at ways of streamlining our grantmaking and reporting processes.
  • We are asked to be flexible around the goals and expectations attached to Foundation grants.
  • OTF is encouraged to partner with sector networks and other funders to help leverage the impact of its grants.
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