(April 1, 2020) Prime Minister Justin Trudeau’s March 30th announcement that the wages of people working for businesses, non-profits and charities could be reimbursed by up to 75% if the businesses, non-profits or charities could show a 30% loss of revenue brought a sense of relief to some leaders in the charity sector.
“The plan will have a huge impact on us,” says Andy Murrie, CEO of Mothers Against Drunk Driving (MADD). “We see an enormous drop off in revenue right away. It’s definitely going to be 30% and could be as high as 50%,” says Murrie, “If all of this lines up, it will allow us to prevent carnage.”
MADD has 40 staff in its head office, another 10 regional staff that help operate 110 community chapters, which have 1,000 volunteers and 4,000 more volunteers who assist them. The volunteers provide support to people who have lost loved ones to drunk driving through online and in-person service. They have moved their annual gathering of about 300 people, “newly victimized” by drunk drivers from around the country, to September and their leadership training conference to the November.
“We thank the Prime Minister. I’ve never seen a government respond like this.”
Other charities surveyed by The Charity Report are taking a wait and see approach.
“[The measures] could potentially help but there is still a lot to be fleshed out. In particular, it will be important how that 30% drop in revenue will be calculated or substantiated,” says Jennifer Henry, executive director of KAIROS, an ecumenical social justice organization with ten participating member denominations and religious organizations.
“I appreciate the focus on wages, because keeping people employed is not only good for the long-term stability of charities but has immediate benefits in support for vulnerable people (many of our mandates), households, mental health and the economy.”
That the charity sector needs some special attention during the global pandemic is beyond dispute, but many are unsure if they will meet the criteria of a 30% loss of in revenue.
Sandra Schwartz is the CEO of CPAWS, the Canadian Parks and Wilderness Society, which is dedicated to the protection of public land and water. They employ 20 staff in their national office with another 100 chapters staff spread out in 13 community-based offices from Yukon to Newfoundland and Labrador.
“The announcement on Monday was in line with the federation of business, but charities are not businesses,” she says. “We won’t know about the 30% until January or February 2021. “We are most concerned about our institutional funders. We’re assuming if we don’t have a signed contract, we don’t have the income. We expect the hit to be mostly on the foundation side, because of the hit they are taking with their investments.”
Schwartz says although all staff are working remotely, they have not—or to they plan to lay off any staff. “As a charity, our financial health is good. We’ve always had reserves.”
“The Alzheimer Society [of Canada] welcomes the federal government’s announcement,” says the organization’s director of communications Rosanne Meandro, “which we are reviewing more carefully. There are still a few unknowns, namely, how the money will flow and how it will be apportioned.”
There are currently over half a million Canadians living with dementia. This number is expected to nearly double in the next decade. The Society works fund research and support programs for people with Alzheimer disease.
“We did see the wage subsidy announcement yesterday and applaud the Government of Canada for recognizing the importance of the charitable sector during this unsettling time,” the Nature Conservancy of Canada wrote in a statement to The Charity Report. “We will be reviewing the program criteria further in the coming days as those details become available and determine their implications.”
Angela Crockwell, executive director of a community organization serving vulnerable people in St. John’s called Thrive, which The Charity Report wrote about last week, said she’s not sure if the announcement will have any impact on them. “Most of our funding is secured through core program grants.”
Many charities contacted by The Charity Report are trying to figure out if the measures could help them and reported “holding management meetings,” and “working to get the full picture.” Many more “just couldn’t speak about it right now.”
It is little wonder there has been a range of response to the government announcement. The charity sector reported $260 billion in revenue in 2017. Overall, about 6% of charity revenue in the sector comes from philanthropy. The sector is diverse and charities generate revenue by different means.
Many charities are almost completely funded by government or large institutional funders. Others rely on exquisitely timed and finely tuned direct marketing programs to fund their work. There is no one-size solution.
Canada’s oldest and best-known cancer organization, the Canadian Cancer Society (CCS), for example, is funded by large numbers of small donations. It raises its budget by $10, $20 or $50 at a time. In 2018, CCS had revenue of $187.8 million. That year, it reported assets of $182.2 million and $76.8 million in liabilities, which means they might be able to continue for about six months using up their short and long-term investments.
CCS just announced the cancellation of its Daffodil sale, which it estimates will cost the organization $20 million in revenue.
By contrast, another well-known cancer charity—the Princess Margaret Cancer Foundation—primarily generates its revenue from a small number of large donations, including $31.5 in investment income in 2018. In 2018, it had an annual budget of $209.2 million. Its balance sheet showed assets of $639.1 million on $77.2 in liabilities, which could, conceivably, allow the organization to continue with zero revenue for two years. The Princess Margaret Cancer Foundation is about to launch the “largest healthcare campaign in Canadian history.”
Still, in consideration of the range of charities needing help, Sandra Schwartz of CPAWS is not alone among charities when she says she has full confidence in the federal government to work this out.
“This is the first time we’ve ever had a government with people in it who’ve actually come from the charity sector. They get it. I wouldn’t be surprised to see more announcements coming.”