One year on: COVID’s impact on charitable sector

The charitable sector is famously resilient and up for a challenge. But a year into the COVID-19 pandemic, the ability to bounce back is being sorely tested.

Imagine Canada’s latest Sector Monitor report details the strain the sector is under these days. The results are from a November-December 2020 survey of almost 1,100 Canadian charities.

“There is a growing gap between demand and capacity. Many charities are experiencing higher demand, while at the same time grappling with staff and volunteer shortages. Organizations are being stretched to do more, and the increased pressure is taking a toll on employees,” notes the report.

Some key findings:

  • Close to half of charities are reporting higher demand, a sharp increase from the initial surge reported early in the pandemic.
  •  A significant number of charities experiencing increased demand have to meet it with fewer staff members and, in particular, fewer volunteers. Sixty per cent of charities are reporting a decline in their number of volunteers and 58 per cent, a reduction in volunteer hours.
  • Over half of charities are reporting a decline in revenues since the onset of the pandemic, with an average decline of 43 per cent. Revenue from donations and earned income has declined for most charities, while support  from the government has tended to increase.
  • 75 per cent of charities are reporting a decline from at least one type of donation since the beginning of the pandemic. Event-based fundraising is seeing the most pronounced decline.
  • To offset the losses, organizations are drawing on reserve funds, acquiring debt, selling assets, and reducing expenses related to their paid and volunteer staff.

The report found that “support measures introduced by the federal government are playing a significant role in preserving employment within charities.” Forty-two per cent of charities have received some form of support from one or more of the following  programs: the Canada Emergency Wage Subsidy (CEWS), the Canada Emergency Commercial Rent Assistance (CECRA),  and the Canada Emergency Business Account (CEBA).

“Charities are reporting a more positive situation than in the early stages of the pandemic; however, they are also more likely to be pessimistic rather than optimistic when forecasting their financial situation over the near-term,” notes the report.

Close to a third believe they can operate for longer than a year but will have to cease operations at some point. Sixteen per cent believe they will not be able to operate longer than a year if trends continue, and a similar number are unable to say how long they will be able to operate for.

The charities surveyed are roughly three times more likely to believe that their financial situation will worsen over the next three to six months than improve if current trends continue.