Months after the COVID-19 pandemic brought Ontario’s non-profit sector to a screeching halt, many organizations say they’re struggling to keep the lights on – and believe government support for the sector has been sorely lacking.

According to a joint report from the Ontario Nonprofit Network and the Assemblée de la Francophonie de l’Ontario (AFO), a third of all non-profits have laid off staff. A fifth say they could close within the next six months. Even as COVID-19 case numbers remain far lower than they were in late spring, the looming economic hangover of public health restrictions, along with a corresponding increase in mental illness and domestic violence rates, have triggered a greater need for social services and health nonprofits.

Except many of these organizations are under tremendous financial strain themselves. “ONN and AFO continue to be concerned with how nonprofits and charities will survive not just in the next few months, but into 2021,” the report reads. “With the possibility of a second wave of infections, it is more prudent than ever for governments to demonstrate their commitment to the nonprofit sector by working in partnership to address challenges.”

Nearly 1,200 Ontario organizations, including non-profits, charities, and social enterprises, responded to an ONN and AFO survey in June about their experiences during the pandemic. Here’s what they said:

Non-profits are still hurting, but are shouldering more responsibilities

In April, Ontario non-profits told ONN they were facing a triple threat: lost revenues from cancelled fundraising events, a drop in donations (as unemployment rates rose), and unprecedented human resource challenges. Only half of all Ontario non-profits were still open, while another 16 percent were “partially operating.” The report’s survey from June suggests little has changed.

About 40 percent of Ontario non-profits who answered the survey say they’re seeing increased demand for their services, especially those working in health, housing, environment, social services, and educational needs. They’re working to meet these needs despite half of all non-profits seeing an average 25 percent drop in their overall revenue – the report estimates total losses for all of its respondents at $90 million. In short, Ontario non-profits are doing a lot more with far less.

About 10 percent of respondents used personal money to keep organizations afloat. 

This financial instability is threatening the survival of Ontario non-profits even after the pandemic’s first wave. Funding is the biggest challenge for a quarter of all ONN survey respondents, along with implementing health and safety initiatives. These organizations have done more than just lay off staff. A third told ONN they had to draw on reserve funds, just under a quarter cut back work hours, and about 10 percent of respondents used personal money to keep organizations afloat. 

Non-profit workers and volunteers are disappearing, and not all of them will come back

Pandemic-related layoffs have plagued every sector of Ontario’s workforce, including non-profits. These layoffs are, in theory, temporary, but just under half of all organizations who laid off workers plan to hire everyone back. Another 30 percent are hoping to hire “some of them” back, and 12 percent don’t expect to bring anyone back at all. Volunteer numbers are also declining. About 52 percent of organizations say they’ve lost volunteers over the course of the pandemic and aren’t seeing any sign they’ll return.

“It’s clear from these findings that many nonprofits are under extreme financial strain, with human resources strained to the breaking point, while some are experiencing increased demand amid declining revenues,” the report reads. “This strain may be coupled with unforeseen expenses associated with the pandemic, such as respecting health and safety guidelines and government guidance as the province continues to reopen.”

Government pandemic funding hasn’t helped much

As COVID-19 health measures shuttered workplaces across Ontario, both Queen’s Park and Parliament approved support programs to keep the economy ticking – the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Business Account (CEBA), along with commercial rent assistance. But the majority of non-profits who answered the ONN survey said none of these initiatives helped.

A whopping 65 percent of organizations told them they did not benefit from any federal assistance, with 75 percent reporting the same for Ontario government support.

A whopping 65 percent of organizations told them they did not benefit from any federal assistance, with 75 percent reporting the same for Ontario government support. Another two-thirds of non-profits did not benefit from any tax measures announced in Ontario’s COVID-19 action plan.

Why did these measures leave so many organizations out in the cold? In part, these supports were written for profit-driven enterprises, not non-profits. “For example, the CEWS required a 30 percent reduction in revenues to qualify,” the report said. “Nonprofits do not pay shareholders and typically operate on a break-even basis. For them, even less than a 30 percent loss can be catastrophic and this does not cut into profits as it would in a for-profit corporation, but translates directly into pay cuts, layoffs, and closures.”

And while the Canadian government offered over a billion dollars to support certain non-profits, charities and causes – including gender-based violence, food security, and arts organizations – the report found it wasn’t enough. “Relative to the size of the Canadian nonprofit sector (over 8 percent of Canadian GDP, employing two million workers), these measures were modest,” the report said.

Yet mutual aid networks are actually flourishing

In the face of COVID-19, the ONN report found Ontario non-profits are strengthening their ties to mutual aid networks – local voluntary efforts to care for communities during times of hardship. These could be community fridges, voluntary food delivery arrangements, or community gardens. When asked, 43 percent of survey respondents said they’d been active in new mutual aid groups or grassroots organizations. The majority of these collaborations were around “resource sharing,” according to the survey, while others included responding to food insecurity and even providing cash transfers.

Understanding these partnerships gives some insight into the most pressing issues on the ground, the report found. A network around food insecurity, for example, reflects the growing pressure food banks are facing in response to rising unemployment and economic hardship. “What is evident is that grassroots organizations and mutual aid networks have stepped up to play a critical role, especially given the disruption by the pandemic of more traditional services or types (of) support or direct service delivery,” the report said.

Tell us this made you smarter | Contact us | Report error