Policy priority: Core Funding
The federal government frequently relies on the sector to deliver crucial programs and services but its funding practices create inequities, inefficiencies and challenges for organizations as they work to deliver quality services to communities.
Nonprofits, like businesses and government, have basic core operating costs such as insurance, rent, and computers that they must cover in order to function. When nonprofits are reliant on inefficient and inadequate project-based funding and cannot access core funding to cover these essential costs, it negatively impacts the quality of services they can offer their community, the employment conditions of nonprofit workers, and the long-term sustainability of their organizations.
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Jumping from one project-based contract to another shifts the focus away from developing and improving the quality of programs and services or building organizational sustainability. Ultimately, this negatively impacts the communities that nonprofits serve.
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77% of nonprofit workers are women, 47% are immigrants and 34% are racialized and Indigenous people. The prevalence of short-term project funding and underfunding leads to low wages, few benefits and precarious work for our diverse workforce.
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Core funding is a crucial tool to help the nonprofit sector prepare for and weather crises, such as public health emergencies and economic downturns, when communities need the sector more than ever.
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Instruct the President of the Treasury Board to amend the Policy on Transfer Payments and its supporting documents to account for our sector’s unique operating and financial models and societal role by creating specific funding provisions that:
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Embrace risk and assess risk more equitably
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Mandate that all project-based funding allow a minimum of 30% of funding to be used for associated core operating and overhead costs
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Reduce the administrative burden associated with applications, reporting, and audits
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Allow for greater flexibility to move funds between cost categories
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Reduce funding renewal gaps by increasing multi-year funding availability
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Provide clear guidelines regarding when it is appropriate to offer unrestricted and core funding to nonprofit recipients
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Ensure policy compliance within government departments
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Apply an equity approach to the provision of funding that:
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Develops equity and accessibility guidelines for federal funding
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Distributes funding equitably to address current and historical inequities
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Provide dedicated capacity-building funding for organizations from equity-seeking communities
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The New Humanitarian, 2024
Stanford Social Innovation Review, 2024
Imagine Canada, 2023
Nunavut Association of Non-Profit Organizations, 2023
Imagine Canada, 2023
Imagine Canada, 2023
Imagine Canada, 2023
Assembly of Seven Generations, 2022
Imagine Canada, 2022
Imagine Canada, 2022
Imagine Canada, 2022
The Conversation, 2022
Imagine Canada, 2020
Imagine Canada, 2020
Canadian Women’s Foundation, ONN, Canadian Centre for Policy Alternatives, and Kathleen Lahey with contributions from Imagine Canada, 2020
Special Senate Committee on the Charitable Sector, 2019 - recommendations 10, 11 and 12
The Stanford Social Innovation Review, 2009
Independent Blue Ribbon Panel, 2006
Canadian Council on Social Development, 2005
The Philanthropist, 2004