COVID recovery funding for community services fell short by two-thirds: new data
Why It Matters
In the first comprehensive analysis of granting through the post-COVID Community Services Recovery Fund, data shows that most funding allowed non-profits to adapt or pivot their programs. The three intermediary funders were also able to support grantmaking to non-qualified donees, many of whom were applying to a fund of this sort for the first time.
NOTE: This is the first of a two-part series on data about the Canadian non-profit sector. Read part 2 tomorrow.
New data says the non-profit sector received only one-third of the help they needed after COVID-19.
A new analysis of the Community Services Recovery Fund (CSRF) reveals the sector collectively requested nearly $1.4 billion in funding to help with post-pandemic recovery.
The CSRF was a $400 million federal fund for the non-profit and charitable sector, administered by three intermediaries: the Canadian Red Cross, Community Foundations of Canada (CFC), and United Way Centraide Canada.
A new dataset contains details of 15,000 applications made by non-profits to the CSRF in 2023. According to an analysis by DARO, an organization supporting digital transformation and data capacity in the non-profit sector, 36 per cent of applicants received funding through this pool. While 21 per cent were fully funded, the remainder received partial funding.
Most applicants requested funding to support adaptation or pivoting of existing programs and services, personnel engagement and retention, and digital transformation and data capacity.
Social services organizations comprised the largest proportion of applicants, with arts and culture organizations being the second-most likely to request federal funding.
The faith-based sector “stood out for its disproportionately large need for investment in equipment, IT / digital infrastructure and physical space,” according to DARO.
Meanwhile, organizations working in the environmental sub-sector, development and housing, law, and philanthropic intermediaries expressed low levels of need, which DARO’s researchers believe warrants further investigation.
“Funders should engage with these subsectors to understand whether the lack of applications reflects a lack of need, barriers to accessing funding, or misalignment between the fund’s objectives and and the subsectors’ priorities,” they wrote.
Future of Good reached out to all three national funders. The Canadian Red Cross did not have a representative available for an interview.
A colossal data exercise
Before the CSRF, in 2020, Employment and Social Development Canada also poured $350 million into an Emergency Community Support Fund, which was also distributed through the three national partners to community organizations providing essential services.
The CSRF opened for applications in early 2023, and funded projects must be completed by mid-2024. Applicants could apply through any of the three national funders, each responsible for a specific stream: systems and processes, people, and program and service innovation and redesign.
The analysis shows that 38 per cent of applications focused on systems and processes, the stream managed by CFC.
The national funders decided on a single, shared approach to funnelling in applications and making assessments for successful applications, said Sarah Trudeau, director of strategic initiatives at CFC.
“The three of us operate very differently, so it was a really interesting moment for us to come together, bring all of our approaches and experiences into this, and then do what is best for the applicant,” she said.
CFC and United Way also channelled applications locally to 167 community foundations or the 60 local United Ways within particular communities.
This granting structure enabled “a national structure with deep local leadership,” added Vice President Geneviève Vallerand.
“Our conviction is that local communities know their needs best, and it’s not one organization, centralized in one particular place in the country, that is going to be able to support and meet and respond to local needs across such a vast geography and so many different cultures,” she said.
She gave the example of several communities nationwide experiencing climate emergencies during the CSRF funding cycle. Local foundations were best placed to respond to community needs at that time, she said.
Each applicant – successful and unsuccessful – had to self-report several data points, including details about their annual revenue, staff and the primary population served by their activities.
In CFC’s case, each participating foundation had access to a centralized platform to track granting. Local United Ways also received guidance and resources from the national organization to ensure a standardized data collection process, said Sara Middleton, national director of community initiatives and special projects.
The funders ensured that the data collected was not overly onerous for the applicants, Middleton said. For example, she said, surveys were designed with several drop-down options.
As part of their final report and data analysis, DARO highlighted some of the data’s limitations. For example, they noted that each applicant was asked to select one project type from a list, which may not reflect the full breadth of activities that a project covers.
“…projects are multi-faceted instruments of organizational change that can encompass several different categories,” they wrote.
“For example, a project assigned to the category of ‘digital transformation’ may well include program / service adaptation and personnel training in order for people to use what is being created as a result of the project.”
Data helped funders uncover latent needs in the sector
“This is a very unique funding program,” Middleton said. “We don’t typically see funding programs that are for capacity building or operational aspects. We can see obviously that there is a demand for this.”
Many community foundations that participated in grantmaking through the CSRF also felt that their confidence had increased in providing core funding, said Vallerand.
After the CSRF granting cycle ended, CFC recommended that more unrestricted and core operational funding be available to non-profits and charities.
Seventy-four per cent of CFC’s funding recipients were small organizations, with revenues under $1.5 million. Most had fewer than 10 employees.
As the CSRF funding rolled out, the CRA also simultaneously updated its guidance on disbursements to non-qualified donees, allowing more community foundations to give grants to organizations that were first-time applicants to this sort of fund, Vallerand said.
“Many of these non-qualified donees are in fact organizations from equity-deserving communities that historically have been excluded from these funding streams,” she said.
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