The non-profit sector must democratize funding to reach the most vulnerable Canadians, experts say

When COVID-19 hit, non-profits couldn’t access emergency funding. Here’s how the Canadian Red Cross rallied around them.

Why It Matters

Some non-profit advocates say that grassroots, community groups, and non-profits are being excluded from accessing philanthropic funding, thereby limiting their emergency preparedness and the community resilience of Indigenous and equity-seeking groups, who constitute the majority of these informal networks and non-profits.

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This story is in partnership with the Canadian Red Cross (Red Cross).

Content warning: This story includes mentions of suicide.

When Alison McKenzie founded the ShEvalesco Female Empowerment Association (ShEvalesco) four years ago, colleagues in the non-profit sector often gave her the same advice:

“Give it 10 years to gain some momentum.”

But it’s not what she wanted to hear. “I’m too impatient for that,” says the executive director of the Vancouver-based organization empowering female-identified and non-binary youth nation-wide with knowledge, strategies and tools to confidently navigate life.

The non-profit, staffed by McKenzie and five part-time female-identified youth, has challenges  accessing funding to expand its team and services, which in turn limits its impact. 

“There is only so much we can achieve with one full-time staff member who wears all of the hats,” McKenzie says. “I want to employ full-time individuals on a long-term basis to expand upon our success, find different and more inclusive methods to engage and empower youth, and allow us to reach our full potential.” 

As a small non-profit, McKenzie says project-specific grants have been ShEvalesco’s revenue bread and butter. During the early days of the COVID-19 pandemic, ShEvalesco, like many other non-profits, experienced an increase in demand for services as its clients were experiencing intense social isolation during lockdowns.

The organization was able to tap into funding from the Government of Canada’s Emergency Community Support Fund, made available by the Canadian Red Cross (Red Cross) intended to support non-profits — rather than registered charities who are on the receiving end of the majority of philanthropic funding — to deliver services to people most at-risk of COVID-19 and its social and economic impacts. 

The Red Cross granted ShEvalesco about $95,000 for two programs — one of which provided webinars and resources to female-identified and non-binary youth across Canada, and another which supported youth with back-to-school readiness by providing them with direct services such as food, clothing, and school supplies, among other support such as mentorship. 

“The funding made [a] world of difference to our organization during the pandemic,” McKenzie says, as the projects exceeded expectations for reach and impact.

She says that in addition to funding non-profits who don’t have charitable status, funders should broaden the scope of what they typically fund. “To democratize funding, a movement away from project-specific funding  — in which, for our category of small non-profit, 99 percent of the funds live — to unrestricted funding would be a glorious change.” 

This change would help non-profits like ShEvalesco better respond in times of crises. During emergencies, when non-profits need to quickly pivot to support the community, such as creating online programming from scratch during the pandemic, non-profits like ShEvalesco do not have the financial or staffing capacity to do so, McKenzie says. However, core funding rather than project-specific funding would allow them to have buffer room to be able to pivot and better respond to needs during emergencies.

For many Canadian non-profits like ShEvalesco, accessing any funding at all is a major challenge, as donors tend to prioritize granting funds to registered charities. 

When the COVID-19 pandemic hit and organizations were overwhelmed with increased demands, the Red Cross knew that some groups, particularly non-profits who are not registered charities, would disproportionately struggle to access funding. 

“When people talk about the charitable sector broadly, a lot of times, there’s a heavy focus on charities, because they’re registered. You can look up a charity quite easily on various websites,” says Emily Pietropaolo, senior director of recovery services at Red Cross. “But there’s this whole other half of the sector, which are non-profits who… are not organized in the same way, but are doing equally as [impactful work in] communities.”

Overall, the Red Cross team disbursed $65 million in grants exclusively to non-profit organizations across Canada. The funds were made possible by the Government of Canada, through Employment and Social Development Canada.

In order to reduce barriers for these groups who are typically excluded from funding, Pietropaolo says the Red Cross designed a simplified grant application. “It wasn’t like a typical grant application. You don’t need to hire a grant writer, you don’t need to write long paragraphs, you don’t need to provide logic models.”

With a revised application, groups could complete the application in about 15 minutes. The Red Cross also opened a call centre where potential applicants could ask questions and receive support in both official languages. They provided technical support to walk applicants through the process, if they were unfamiliar or intimidated by the application.

Amy Avis, chief of specialized recovery services at Red Cross, says that while granting organizations may find it more difficult to form relationships with non-profits or other community groups since many are smaller, informal, and may not know they’re eligible for funding, funders should look for opportunities to support these grassroots groups.

For Jeff Chalifoux, the executive director of the Edmonton 2 Spirit Society, funders not only need to seek out these groups, but consider how they engage with them.

“We could use dialogue [with funders], and to root things in an Indigenous way through ceremony, through application processes that include circle with some of our elders so we can understand each other through sight and [body] language and all other methods of learning when we are together,” Chalifoux says.  

The Edmonton 2 Spirit Society, a non-profit, received approximately $120,000 in funding through the Emergency Community Support Fund during the pandemic to provide cultural teaching and connectivity, education on the coronavirus, and suicide intervention skills training and mental health first aid.

The non-profit, which is currently in the application process to become a charity, has had challenges seeking grant funding for long-term projects and operational costs. In addition, some donors specifically seek to fund Indigenous non-profits, and Chalifoux says the downside of this is that their organization often finds itself “competing with our own community for funding dollars.”

As with many non-profits, the available funds are unable to meet the demands. And for the Edmonton 2 Spirit Society, it’s a matter of life and death.

Chalifoux shares that the suicide intervention skills training has been crucial — the organization unfortunately lost a community member to suicide shortly after the training. The training, which helps people to recognize signs of suicide in others, intervene, and develop a safety plan, is a response to the disproportionately high suicide rates amongst First Nations, Métis, and Inuit people compared to non-Indigenous people — a symptom of historical and present-day systemic oppression. While this training is always valuable, it is particularly relevant during emergencies such as the pandemic, where social isolation has led to exacerbated mental health challenges. Amid the varied difficulties in a pandemic, from heightened health risks to a loss of income, such trainings related to suicide and first aid directly contribute to community resilience.  

“We find value in that the grant helped us build that knowledge base for us to be able to support our people,” they say. “Our community faces so many barriers in terms of access, equality… We have more folks encountering more dire mental health [issues].” 

Access to more funding would directly improve the health of community members, Chalifoux says — but since the organization is not yet a registered charity, it is unable to tap into sustainable, long-term, core funding.

Avis says that while many other granting programs may discriminate based on an organization’s charity status, the Red Cross’s application process for the Emergency Community Funding program is different.  

“The sector itself points to regulatory barriers or different pieces to say that it can’t fund them,” Avis says. “The charitable sector chooses… to not fund Indigenous and equity-seeking populations in a revenue-representative way. There are no limitations for them to do so, but they choose not to.” 

The irony, Pietropaolo shares, is that these small or informal non-profits are often racialized and equity-seeking groups, who are more likely to be disproportionately impacted during emergencies such as the COVID-19 pandemic. 

Meanwhile, according to Statistics Canada, COVID-19 mortality rates in neighbourhoods with the highest proportion of visible minorities were approximately two times higher than that of communities with the lowest minority populations. This is due to the intersection of various factors such as income, employment, and housing. 

Avis says funding community groups, informal networks, and grassroots community initiatives is more labour-intensive for funders as these groups are often volunteer-led, and don’t have typical corporate structures or traditional bookkeeping — all of which funders typically seek. Finding these organizations, letting them know they’re eligible for funding, and working with them to set expectations and measure their impact will take more effort than working with registered charities who have systems in place. 

However, ensuring equitable funding in Canada will require grantors to invest in processes that ensure they can reach and support these groups. This way, philanthropic funding in Canada can reach populations who need it the most, rather than being limited to those who are being served by registered charities.

“This sector has to challenge itself, to make sure that we’re actually funding these groups that are more difficult to fund,” she says. “We as a sector need to do better to make sure that we are … democratizing the way in which we’re supporting one another,” Avis says. 

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