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Priorities and challenges for nonprofits in the first quarter of 2022

Priorities and challenges for nonprofits in the first quarter of 2022

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As the world enters the third year of the COVID-19 pandemic, the challenges facing charities and nonprofits continue to evolve. The Omicron variant led to increased public health measures, including school closures in some areas, in January. In February, anger against these measures was mobilized into protests that disrupted international borders and cities across the country. Throughout the ongoing disruption of our lives, charities and nonprofits have continued to innovate and find new ways to pursue their missions and serve their communities.

With this new quarterly blog series, we will provide timely analysis of emerging trends affecting the sector. We hope these pieces will help nonprofit professionals make sense of what’s happening now and plan for what’s coming and help others in our ecosystem, including government and the corporate sector, understand how they can support charities and nonprofits in 2022. Keep reading to learn about some of the biggest trends we’re seeing in the first quarter of the year.

Challenges finding and keeping staff

Doug Watson, President and CEO of VolunteerConnector, says “Our main concern in 2022 is retention of our staff. We are a small team. If even one person leaves it could set our organization’s aims and objectives back by 12-18 months.” Watson is not alone in his concern. According to the results of the most recent Canadian Survey of Business Conditions (CSBC), 33% of nonprofit-sector employers believe retaining skilled staff will be an obstacle over the next three months while an even larger proportion (38%) are concerned about recruiting skilled staff1. This is an economy-wide trend but, interestingly, nonprofit-sector employers are more likely than private-sector employers to express concern about both recruitment and retention.

There have been numerous media reports about private companies offering hiring and retention bonuses and increasing wages to find and keep the staff. According to the CSBC, however, nonprofits are even more likely than private companies to be planning wage increases. In late 2021, 58% of nonprofits said they were planning to increase the wages of existing employees and 31% said they were planning to increase wages for new employees, compared to 48% and 25% of private businesses2. It should be noted, however, that average salaries in community nonprofits are considerably lower than the economy-wide average ($38,716 compared to $52,638 in 20193). So in many cases nonprofits are starting from a disadvantage as they scramble to recruit and retain staff. Additionally, thin operating budgets and inflexible funding agreements mean many organizations are significantly constrained in their ability to increase wages.

For much of the pandemic, the Canada Emergency Wage Subsidy (CEWS) was a crucial tool that helped many organizations retain staff. Following a period of low case numbers and relative openness last fall, the federal government made substantial changes to major emergency measures, including CEWS, which will likely mean fewer charities and nonprofits are able to access them. We are concerned that these changes to emergency measures will contribute to a loss of skilled staff to other sectors.

In the nonprofit sector, labour shortages are exacerbated by another trend: a decrease in volunteers. Volunteers are a critical part of our sector. The most recent General Social Survey on Giving, Volunteering and Participating, conducted in 2018, found that almost 13 million Canadians volunteered annually4. More than half (58%) of charities are completely volunteer-run5. According to public opinion polling conducted late last year, 17% of people planned to volunteer during the 2021 holiday season. This was an increase from 2020, when only 9% indicated they intended to volunteer, but still well below the pre-pandemic level of one third6. The combination of lower volunteering rates and the ongoing labour shortage will have a major impact on the capacity of many organizations to serve their communities. 

The Ontario Nonprofit Network has been investigating this trend within the Ontario context. To learn more about what they’re hearing, check out their writing on the subject. 

Rising prices 

Statistics Canada recently reported that inflation surpassed 5% in January - the highest it’s been in more than thirty years7. Rising prices will impact many nonprofits. Sue Tomney, CEO of YWCA Calgary, notes that “the rising cost of goods and services, including basic necessities such as electricity to power our buildings, can negatively impact our ability to provide consistent service levels. This is particularly problematic in programs that are already underfunded or partially funded and in many cases have not seen any increases to their funding for many years.” Nonprofits that experienced revenue losses during the pandemic will also be severely impacted by rising prices. 

Data from the CSCB show that nonprofit leaders were already becoming concerned about inflation late last year. In the fourth quarter survey, 32% of nonprofits expressed concern about the cost of insurance, 26% were concerned about the rising cost of inputs, and 20% said they were worried about the cost of personal protective equipment, cleaning, and implementing distancing requirements8. The level of concern about inflation among nonprofits was similar to the level of concern in the private sector. When prices rise, however, businesses are often able to weather the storm by passing on increases to customers and clients. This is more challenging for charities and nonprofits.

Increasing demand

Many charities and nonprofits have been experiencing increased demand for their services throughout the pandemic9 and this is unlikely to change in 2022. In fact, many sector leaders expect demand to increase even more due to the combined fallout of a prolonged pandemic and rising inflation. Fourth quarter data from the CSBC showed a noticeable spike in the number of nonprofits expecting demand to increase over the next three months, jumping to 38% from 26% in the third quarter10

We’ve been picking up on media stories from across the country that illustrate what this looks like on the ground. Toronto’s Daily Bread Food Bank reported a 67% increase in clients year-over-year in late 2021 while the Calgary Counseling Centre reported a 21% increase in demand for their mental health supports since the onset of the pandemic. When combined with staff shortages and increasing costs, rising demand is putting a serious strain on many organizations’ capacity.

It is likely that the rising cost of living will have an impact on demand for some organizations, especially those serving low-income individuals. Additionally, most of the data we have about increasing demand reflects the period before the federal government made substantial changes to the Canada Recovery Benefit, its main income support program for individuals whose employment was impacted by the pandemic. It is possible that the loss of this support for many will drive up demand for certain programs and services.

Final thoughts

The latest wave of the pandemic, driven by the relatively milder but much more contagious Omicron variant, has changed the dynamics of the pandemic dramatically. Canada’s Chief Public Health Officer recently stated that the country needs to find a more ‘sustainable’ approach to managing COVID-19 going forward and many jurisdictions are gradually lifting restrictions, potentially signaling the beginning of a new era of pandemic management. Although Canada’s high vaccination rate and an ever-growing body of scientific knowledge about how to combat COVID-19 mean there is hope for a brighter, more stable future, 2022 will likely continue to bring more uncertainty and challenges for the charitable and nonprofit sector. 

 

1 Statistics Canada. Table 33-10-0400-01, Business or organization obstacles over the next three months, fourth quarter of 2021.

2 Statistics Canada. Table 33-10-0416-01, Business or organization plans regarding recruitment, retention and training, fourth quarter of 2021.

3 Statistics Canada. Table 36-10-0650-01, Employment in the non-profit sector by type of worker and Table 14-10-0340-01 Employee wages by occupation, annual.

4 Statistics Canada. Volunteering in Canada: Challenges and opportunities during the COVID-19 pandemic.

5 CanadaHelps. 8 facts you might not know about charities.

6 Imagine Canada. Canadians more hopeful this holiday season with new appreciation for importance of generosity: survey.

7 Statistics Canada. Consumer Price Index, January 2022.

8 Statistics Canada, Table 33-10-0400-01, Business or organization obstacles over the next three months, fourth quarter of 2021

9 Imagine Canada. Sector Monitor: The uneven impact of the pandemic on Canadian charities.

10 Statistics Canada. Table 33-10-0399-01, Business or organization expectations over the next three months, fourth quarter of 2021 and  Table 33-10-0363-01,  Business or organization expectations over the next three months, third quarter of 2021.

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