Vital non-profit programs collapse in wait for Ottawa

An article by columnist John Ivison in the National Post this week, which we’re sharing here so you can have a smooth read of some important words rather than the chopped-up and ad-heavy version that is on the Post’s site!

By John Ivison

La Maison des Collines is a six-bed palliative care home for residents of the Gatineau Hills in Wakefield, Que.

In normal times, it receives close to half its operating budget from the provincial government and raises the other half from fundraising events like golf tournaments, wine-and-cheese evenings and walk-a-thons. These are not normal times.

With the onset of COVID, fundraisers have been cancelled and donations have dried up. The home has been forced to close two of its beds and it is paying its nurses and orderlies from its dwindling cash reserves.

La Maison is in a better place than many of its contemporaries — board member Amanda Mayer said that palliative homes across Quebec had three months of cash reserves coming into a crisis that is already three months old.

“It is quite critical, and people don’t realize the kind of impact it could have on local services,” said Mayer.

The third pillar of Canadian society is in danger of collapsing.

The impact of COVID-19 on jobs in the private sector, and on the finances of the public sector, have been well catalogued. But the pain being felt in the voluntary sector has passed without much comment.

The government allocated $350 million for charities in late April, but the money was intended for service delivery to needy Canadians, not to ensure the long-term viability of community organizations that help provide social cohesion across the country.

With fundraising activities curtailed, and no way of raising capital on markets, those organizations have hit a liquidity wall, with the only option for many being to cease operations.

Already a YMCA in Yarmouth, Nova Scotia, has said it is set to close its doors after 162 years of operation. Others in the Niagara Region, Thompson, Man., and Nanaimo, B.C., are under pressure.

The Boys and Girls Club in Edson, Alta., is closing and others could face bankruptcy.

Boys and Girls Clubs offer before- and after-school care for vulnerable kids in 775 locations in Canada. Most live a hand-to-mouth financial existence. Governments provide 50-60 per cent of operating costs, but the rest comes from corporate donors, who have their own problems at the moment.

The grim reality is that, as financial resources run down, demand is increasing from families in precarious situations.

Most Canadians associate the YMCA with its fitness centres, swimming pools and camps.

But its 1,700 locations nationwide also act as a third party, delivering a range of government services for newcomers and job seekers. It is also Canada’s largest provider of child care, with 91,000 spots. As parents go back to work, they will need daycare spots to be there.

Peter Dinsdale, president and CEO of YMCA Canada, said the organization lost $91 million of revenue in six weeks and was forced to lay off 20,000 staff (10,000 have since been rehired, after it became clear charities could access the emergency wage subsidy).

He warned that the Y’s member associations “may not be able to operate all locations” without help.

“The YMCA and the Boys and Girls Clubs are where people who can afford to pay, and those who can’t, come together,” he said.

The voluntary sector became a useful transfer station for social services for the Chrétien government looking to cut spending in the late 1990s, under the guise of a $95-million voluntary-sector initiative.

Canadian governments have long seen value in boosting social solidarity by promoting volunteerism.

It is an added bonus that it takes pressure off public sector budgets.

But if those third parties are no longer there, governments will have to pick up the tab themselves.

Imagine Canada, which works on behalf of charities and non-profits, has asked Ottawa for $3.75 billion in grants to ensure the sector survives. A poll of its members revealed 73 per cent had seen donations declined.

The government recognizes that more support is going to be needed if charities and non-profits are going to be there as part of the recovery.

“We are in talks with organizations and are continuing to look at ways to see how else we can help Canadians,” said Jessica Eritou, a spokesperson for Ahmed Hussen, minister of families, children and social development.

She pointed to the $350 million the government has already earmarked for things like home deliveries to seniors. But non-profits say the funding was a mixed blessing, because it left many policy-makers thinking the voluntary sector had gotten what it needed.

Will Amos, the Liberal MP for Pontiac in western Quebec, has been pushing his government to act. “We’ve got to prevent unrecoverable losses to Canada’s social fabric,” he said.

Support for action crosses party lines but, while everyone is in agreement, nothing much has happened.

The loss of Canada’s AAA credit rating, announced Wednesday by Fitch Ratings Inc., will not help the case for a bailout. But a sector-sustainability package does not necessarily have to be in the form of a cash grant.

Charities can’t raise money on capital markets, but Ottawa could issue bonds and provide the funding in the form of interest-free loans, to be paid back over 10-20 years.

Bruce MacDonald, CEO at Imagine Canada, said repayable loans might not work for small charities with volunteer directors reluctant to put their organizations into debt. “The simplest and most effective solution is a grant program,” he said. But he acknowledged the financial constraints on the federal government and said sector leaders are open to talking about other options.

Owen Charters, the CEO of the Boys and Girls Club of Canada, said there are a range of creative ways to support a charity sector that doesn’t have other levers, such as the government offering extraordinary tax incentives to encourage giving. “One of the problems is that I don’t think Canadians understand the breadth of services that charities pick up,” he said.

There is a deep well of generosity and community spirit in Canada. Most people would be appalled to see the pillars of their communities such as palliative homes and local YMCAs closing their doors.

An enterprising government should be able to tap that reservoir of goodwill to aid benevolent organizations that have run out of other options.