Months after the Community Services Recovery Fund made its debut in the pages of Prime Minister Justin Trudeau’s leviathan of a 2021 budget, public servants and social impact sector leaders alike are still haggling over the design of the new $400 million Fund — and who should be eligible. 

It isn’t unusual for the federal government to begin drafting the blueprints for initiatives like the Community Services Recovery Fund until after they’ve been announced in a budget. The responsibility falls to the public service to ensure the direction offered by elected officials in the budget is carried out. Staff at Employment and Social Development Canada (ESDC) are tasked with designing and launching the Fund, and while the department is still working on it, six national federations — Boys and Girls Clubs of Canada (BGC Canada), YWCA Canada, YMCA Canada, the National Association of Friendship Centres, Big Brothers Big Sisters Canada, and United Way Centraide Canada — have their own ideas for how it should be structured. 

In the budget, the Community Services Recovery Fund is described as a $400 million, one-time fund to help non-profits and charities “adapt and modernize” to support economic recovery in Canadian communities after the hardships of the COVID-19 pandemic. These six national federations want a fund that remains narrow in scope. “We want it to truly be for community services,” says Owen Charters, president and CEO of BGC Canada, pointing to the frontline agencies and charities that have provided food and other essentials to families in need since the pandemic began. 

BGC Canada and the other five national federations have been leading the charge on conversations with ESDC and Social Development Minister Ahmed Hussen’s office about a fund for months. Imagine Canada has also been involved. Has the federal government cast a wide net to the rest of the sector? While a spokesperson for ESDC says the government has “maintained an open dialogue with a broad and diverse range of community partners” since the COVID-19 pandemic began, they did not directly answer questions about which organizations had been consulted for the Fund. Several non-profit and charitable networks contacted by Future of Good for this story said they only received consultation invitations from the government last week. And it isn’t clear whether the broader sector is even aware of the Fund’s existence. With the COVID-19 pandemic continuing to hammer the revenues of charities and non-profits across Canada, the need for a fund to help the sector modernize is dire. But who will benefit from it? 

Is the sector even ready for modernization?

The six national federations lobbied Minister Hussen in January 2021 for a $500 to $700 million relief fund for the charitable and non-profit sector. At the time, Charters told Future of Good that revenues among the federations had plummeted by as much as 50 percent. What made it into the 2021 federal budget was the Community Services Recovery Fund: a $400 million, one-time fund to help non-profits and charities “adapt and modernize so they can better support the economic recovery in our communities,” the budget says. 

Modernization could include reworking traditional revenue models, boosting an organization’s digital strategy, or capacity-building initiatives (although it also isn’t defined in the budget). But several federation leaders say they also want the Fund to offer fiscal stability for charities as well as modernization projects like digital transformation. “Our colleagues at YMCA Canada have this great phrase,” says Anjum Sultana, national director of public policy, advocacy and strategic communications at YWCA Canada. “It’s one thing to build an extension on your house — it is another to do it when there’s a fire at your house.” 

Striking the balance between recovery and revitalization will be a crucial aspect of the Fund’s design. “We know that organizations under stress are looking to preserve and protect their capacity,” says Dan Clement, president and CEO of United Way Centraide Canada. “And we also know that their capacity to mobilize modernization or adaptation programs is also under stress.” The six national federations pushed for both stabilization and so-called “bridge funding” to support the sector during their lobbying efforts last year and into 2021, but the federal budget’s description of the Fund does not mention stabilization at all (although it does acknowledge the sector’s severe revenue shortfalls). 

That said, Matthew Chater, national president and CEO of Big Brothers Big Sisters Canada, hailed the language around modernization in the budget as a win. Non-profits and charities have long suffered from the inadequate adoption of digital technologies, a lack of guidance on HR practices, and outdated funding models. The Fund may still be a work in progress, but Chater was pleased with what he’s seen in the budget so far. “When we saw it land, it was almost exactly what we were asking for,” he says. 

Who should get the money?

One of the biggest questions around the Fund’s design is about what qualifies as a “community service” organization. The YWCA, United Way Centraide Canada, and BGC Canada all agree that the Fund should only be for community-based social services. Their definitions varied somewhat, but it essentially came down to front-line organizations like food banks, shelters, and other social services. Charters says the fund shouldn’t be accessible to charities like arts and non-frontline healthcare organizations, although he acknowledges that they’ve been hit hard financially. “The design of the fund was really to be about community services that support personal, social, and emotional well-being for communities, especially through the impacts of the pandemic,” he says. 

While the Fund is called the Community Services Recovery Fund, the budget’s description of its scope is fairly general. The argument made by several of the national federations against broadening the scope beyond community service organizations is simple: there isn’t enough money to go around. $400 million may seem like a lot of money for modernization, but the charitable sector’s needs are great. “This fund cannot be the be-all end-all,” Sultana says. “There is so much that non-profits and charities provide and need to be supported in delivering. Our hope is that this is the first of many different types of support for the charitable and non-profit sector.” 

Clement argues the 2021 federal budget already includes other support and investments for a variety of charitable sub-sectors — and broad sectoral support was never the point of the Fund, anyhow. “It’s not positioned as the charitable sector modernization fund,” he says. “It’s the Community Services Recovery Fund.” 

Who isn’t at the table? 

All six national federations have met with ESDC and the Minister in joint meetings and individually, but ESDC and Minister Hussen’s office does not appear to have offered a public meeting or town hall to sector leaders about the Fund’s design. In an email response to Future of Good, a spokesperson for ESDC says Minister Hussen will be hosting a series of roundtable sessions with charities and non-profits of all sizes this week. “These sessions will provide an opportunity to raise awareness and provide feedback on the implementation of the CSRF and ensure equitable access to the funding,” the statement says.

It isn’t clear which organizations have been invited or how they were selected for the consultation process. According to ESDC, hundreds of charities or non-profits were invited to participate in the roundtable sessions, “including a diverse mix of both larger federated organizations, national and regional organizations, and smaller community based organizations.” Karen Ball, president and CEO of the Calgary Chamber of Voluntary Organizations, says her organization is one of them — but she hadn’t heard of previous consultation efforts. “We were not aware they were happening and of course we always are interested in being able to represent the 21,000 Alberta non-profit organizations in consultation,” she says, although she says it is possible that another Alberta voluntary sector network leader may have taken part. 

Cathy Taylor, executive director of the Ontario Nonprofit Network, an advocacy organization that represents more 58,000 non-profits across Ontario, says her organization hadn’t been consulted about the Fund, although ONN’s national partners have been. “Our mandate is provincial as opposed to federal or national, so I would expect us to consult with our national partners,” she says. “That does make sense to me.” That said, she isn’t sure if there’s been a formal consultation process for the Fund — a situation she says isn’t unusual when governments roll out grant programs for the sector.

And one small charity simply didn’t know about the Fund, let alone that consultations on its direction are underway. “I have not even heard about it,” says Kripa Sekhar, executive director of the South Asian Women’s Centre, when asked about the Fund. She says being blindsided by initiatives like the Fund isn’t unusual, especially for smaller charities who aren’t in regular contact with the government. “It doesn’t appear to be a very inclusionary process,” she says. “The small agencies and women’s groups like us get completely sidelined and the agencies that get big money continue to get big money.” 

The case for intermediaries

When ESDC came back with its original idea for the Fund’s design, shortly after the budget, Charters said it looked a lot like the $350 million Emergency Community Support Fund from last year: a broad fund distributed through a central agency for community relief. “That was not at all what was proposed,” Charters recalls the national federations saying in response, “and it wouldn’t have any of the outcomes like modernizing the sector that have been promised.” 

These national federations made a suggestion: why not use their broad reach to distribute money as intermediary organizations? Some federations could act as go-betweens for their own member-organizations: think YWCA Canada applying on behalf of its local branches, rather than each one submitting its own individual application. Clement says the intermediary model is well-suited to a global pandemic that is playing out at the local level. “One of its values is its grounding of decision making and the prioritization and grantmaking at the local level,” Clement says of the approach. 

He argues that United Way Centraide Canada’s broad reach among charitable organizations could make it a useful way for the federal government to distribute the fund, even to organizations it doesn’t traditionally support. When the Emergency Community Support Fund was launched last year, with United Way Centraide Canada as one of the intermediaries, Clement says half of the organizations it funded hadn’t received money from them before. “That program was not exclusive,” he says. “The program was open, transparent, and all organizations that were qualified could apply.” 

The intermediary approach appears to be the government’s plan for the Fund. An ESDC spokesperson says that after the government finishes consultations with the sector, it will launch a selection process for intermediary organizations who will then be responsible for redistributing funding to charities and non-profits.

What happens next?

No one outside of ESDC knows for sure when the Fund will launch, but time is of the essence. Organizations big and small are struggling financially to do everything from paying the rent to embarking on new digital strategies. Chater, at Big Brothers Big Sisters Canada, says back in the spring, there was a lot of pressure from the federal government to finalize and launch the Fund as quickly as possible. 

Neither Chater nor Charters, at BGC Canada, expected last week’s round of consultation requests from ESDC. “We were surprised that this is the route that ESDC is going – we had thought consultations were largely complete now,” Charters said in a subsequent email. Perhaps, Chater suggests, the government believes it needs to slow down and take stock of the sector’s needs. “I think what the government has heard from various groups such as ours is that they may be moving too fast and need to do some additional consultation,” he says. 

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