The Canadian fund for charities’ overhead costs is here. Here’s how it works — and a major trend it signals.

This year, fundraising platform CanadaHelps tried something new — the organization began creating funds that allowed Canadians to donate to hundreds of charities working on the same issue at once. One such fund benefitted charities working with Black Canadian communities, for example. And in early March, CanadaHelps created a fund for charities that were responding to needs created by COVID-19. 

They received many applications from organizations to join the fund that were doing just that, but something unexpected happened, too. 

“When we launched the COVID fund, it was supposed to be about charities responding to COVID-19 specifically, but we literally got hundreds of applications from charities that were more about sustaining or adapting or transforming the operation,” says Marina Glogovac, CEO of CanadaHelps. 

While these applications weren’t eligible for the fund they applied to, they prompted Glogovac and the CanadaHelps team to consider whether a similar style fund — where Canadians could donate to a big group of charities all at once — would work for those charities that desperately needed funding to make operations-related changes brought about by the pandemic. 

The catch? It’s never been done before. Usually, donors give with the intention of supporting programming or beneficiaries rather than charities’ operating capacity.

It’s never been done before. Usually, donors give with the intention of supporting programming or beneficiaries rather than charities’ operating capacity.

But the team had also been reading about the state of the sector. New data from Imagine Canada had shown that one in five Canadian charities had already suspended operations, some had closed their doors permanently. Compared to the 2008-2009 recession, twice as many charities have seen impacts to their revenue this time around. 

So on July 20, in partnership with Imagine Canada, they launched the CanadaHelps Charities Adaptation and Innovation Fund — where Canadians can donate to a group of 400 charities seeking funding for adapting their operations and services to the conditions created by the pandemic. 

Most of the charities included in the fund are smaller, community organizations, though some are national or provincial. The organizations work on a range of issues, from community food security to climate action to theatre and the arts. In their applications to join the fund, charities said they need funding for transforming a service or business model, like moving a service that was previously in-person to online; investing in technology, specifically, like new software for digital service delivery; investing in safety, hygiene (Glogovac says many charities reported shortages of personal protective equipment) and mental health support for employees; and finding new ways to join forces and collaborate with other charities on COVID-19 responses. 

With 55 days to go, the fund has raised over $36,000 from more than 200 donors. CanadaHelps will distribute the funds monthly and equally to each of the 400 included organizations, and is looking for partner organizations to match donations. While the $36,000 raised so far would be stretched thin across the 400 charities, Glogovac says CanadaHelps didn’t expect to raise nearly this much.

That’s because a fund like this — where individual Canadian donors contribute directly to the operations of charities themselves, rather than donating with the intention of funding the programs the charities deliver — has never been established in Canada, to Glogovac’s knowledge. 

“In general, donors do not like to think about investing in charities themselves,” Glogovac says. “Unlike any other sector I know, the charitable sector is really challenged by this.” 

Glogovac calls funding for operational capacity “a very controversial and kind of taboo topic,” and adds: “I think it’s sad, because in every other sector, every other space, it’s normal to say, ‘Well, if you want results, you want programs, you want something scaled, you want impact — that’s all connected with building the operations of the entity itself.” 

This has long been a challenge in the sector, Glogovac says, but it’s been amplified by COVID-19. She says charities are asking themselves questions like, “How are we going to increase online programming if we don’t have the technology infrastructure?”

It’s a long-term problem that’s come to a head, she says. “I think charities’ lack of capacity and long-term lack of investment into their own operations have now come back to really bite us all.” 

The emphasis on programming over operating capacity is a mindset that underscores much of charity and non-profit funding. While many grantmakers have lifted restrictions on funding to help charities keep their doors open during the pandemic, normally those restrictions mandate that funding should be used for pre-determined programming only, and not for any operating capacity activities, like technology upgrades or staff training. 

But just as the pandemic has the potential to change the way grantmakers think about funding, could it also change the way individual donors support charities? Could the crisis deepen Canadians’ understanding of what it takes to support the causes they care about? 

Glogovac says it very well could. While she and the CanadaHelps team have long known about this funding gap, addressing it by soliciting public donations wouldn’t have been possible without the widespread attention to the stress charities have been under since March. “I think this moment in time has actually brought to light the fact that charities are organizations like businesses, that they’re suffering, and that they’re some of the most dramatically impacted — because of how they fundraise” for programming rather than operating capacity, she says.

Glogovac says that to build on this newfound public understanding of the underfunded behind-the-scenes work that charities engage in to do good, donors, funders and charities themselves need to use this moment to break the taboo around talking about it. She says charities often fear losing funding if they talk about their need for training or technological upgrades, for example. 

Glogovac says that to build on this newfound public understanding of the underfunded behind-the-scenes work that charities engage in to do good, donors, funders and charities themselves need to use this moment to break the taboo around talking about it

This fear, and the general mindset around funding for programming versus operating capacity, is something that should be researched, Glogovac says. But, she adds, “I feel that it probably comes from some very outdated, nineteenth century, disempowering, very patriarchal view of charity as handouts” rather than the critical part of a thriving society it represents today. 

Glogovac says most Canadians probably already understand this role charities play on a personal level. “When I took my son to a charity to help him cope with his illness, what is the social value-add there? Of course it’s there.”

It’s this kind of recognition of the role charities play that the Adaptation and Innovation Fund is meant to bolster. “The charitable sector is incredibly consequential to all of our lives,” Glogovac says, “and we’re really asking people to stop and see that.” 

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