Nonprofit News Roundup: Summer 2022 Edition
It’s not easy to keep up with the news anymore, regardless of the subject.
Yet staying on top of developments in your industry has also never been more important for businesses — or nonprofits — that want to thrive as well as survive.
If you’ve been too busy to catch all of the recent developments affecting Canada’s nonprofit sector, these are the stories you need to understand to make the smart decisions that will propel your charitable organization into the future.
The Giving Report
CanadaHelps.org has been creating annual reports on the nonprofit sector for many years, offering expert insights on the challenges and tribulations faced by nonprofits, as well as forecasts as to what lies ahead.
For The Giving Report 2022, the organization had its work cut out for them, as they track not only the overall decline in donations caused by the Covid-19 pandemic, but also the “increased reliance” on the pool of aging donors that becomes smaller every year.
Add to that the rapid inflation of the last year and a dramatic increase in demand for services, and you have a recipe for tough times for the majority of charitable organizations in Canada.
Highlights of the report include:
In 2022, one out of four Canadians (26 per cent) expect to use or are already using charitable services for basic necessities.
One out of four Canadians (25 per cent) expect to give less in 2022 than they did the previous year.
Overall, giving participation rates dropped from 24.6 per cent in 2006 to 19 per cent in 2019 — a 5.6 point drop.
Total giving in 2019 to 2021 is projected to drop by 12 per cent. The cause is a combination of the pandemic, inflation, and other challenges. “At the same time, a growing number of Canadians are expecting to turn to charities for assistance this year,” the report said.
Federal Budget Changes
The last few years haven’t been easy, and “community evidence suggests that a handful of charities ceased operations, especially those in the areas of sports and recreation, arts and culture, and religion.”
That’s according to a piece from The Conversation, which looked at the federal government’s response to charities facing trouble during the pandemic, and potential changes coming in the next federal budget.
Key points from the article include the “temporary nature” of government assistance thus far:
“While the federal government did attempt to support Canada’s charities during the pandemic, it introduced only temporary measures. Programs such as the Canada Emergency Wage Subsidy, the Canada Emergency Commercial Rent Assistance and the Canada Emergency Business Account only offered 42 per cent of charities some relief.”
The article also explains two key amendments that will have a big impact on Canadian nonprofits:
The first amendment means that charity funders with investment assets exceeding $1 million will be asked to increase their annual funding to 5 per cent from 3.5 per cent. Taking effect on January 1, 2023, the rate increase will mean the injection of an additional $2.5 billion in annual funding.
The second amendment, according to the article, will allow granting foundations to give funding to nonprofits outside of those registered with the Canada Revenue Agency. This means that other nonprofit organizations will become eligible for financial support — if certain accountability requirements are met.
We’ll be keeping up nonprofit news from now on. Check back every few months to read more summaries of the nonprofit trends and news stories you need to know.