Charities seek extra help from feds to keep services running as revenues dry up

Donations expected to decline between $4.2 billion and $6.3 billion

OTTAWA — Canada’s charities say they have begun laying off staff and shutting down their services, which are usually in high demand during economic downturns, as the sector feels the financial sting from COVID-19.

Now the almost-86,000 registered charities in Canada are looking to the federal government to help, with multiple groups calling for immediate cash injections.

Estimates from Imagine Canada, a charity that promotes the work other charities do, suggest donations will decline between $4.2 billion and $6.3 billion, and that between 117,000 and 195,000 workers could be laid off depending on the length of the COVID-19 crisis.

Imagine Canada says charities collected about $22.7 billion in donations and fundraising proceeds in 2018.

There was some help for the sector on Monday when the Liberals announced that charities would qualify for a 75 per cent wage subsidy to help retain workers, so long as they have seen revenues drop by one-third due to COVID-19.

There has been targeted help to the United Way and Kids Help Phone, announced over the weekend, and tax filing extensions to the end of the year.

But other programs in the form of loans may be more difficult to access because charities rarely have collateral.

Bruce MacDonald, Imagine Canada’s chief executive, says COVID-19 has laid bare all the structural flaws in the charity sector and many groups don’t think they’ll be able to ride out the storm.

It’s why a group of some 140 charities is asking the federal government to create a $10-billion fund to help cover the expected loss of revenues — including donations, grants and other sources — from a three-month economic shutdown related to COVID-19.

MacDonald said the financial effect on the charitable sector has been almost immediate, much as it has been for restaurants.

“The challenge is in our world these have real-life consequences,” he said in a telephone interview.

“If you were counting on someone to deliver your meals … this is way more challenging.”

Recent years have seen a decline, overall, in donations to charities. Data crunching by Cardus, a non-partisan, faith-based think tank and charity, noted that the number of individual donors has fallen by five per cent over the previous decade.

The economic downturn linked to public-health efforts to slow the spread of COVID-19 has led to the disappearance of massive pools of revenues groups rely on.

Many organizations rely on philanthropic foundations or individuals who donate portions of their investments: approximately $6.7 billion in 2017, or 30.3 per cent of total giving in Canada that year by Cardus’s calculations.

Now, some of those foundations and individuals can’t afford to donate because of the drop in the stock market.

Events such as galas, conferences, community- and school-based fundraising campaigns have had to be suddenly called off, sometimes leaving groups to pay cancellation fees.

Many charities that raise money by accepting donations of goods and clothing have called off collections.

Another example is the Canadian Cancer Society’s annual “Daffodil Month.” The April campaign usually sees 27,000 volunteers out raising funds, including going door to door. The organization’s CEO says the society expects to lose out on almost $20 million over the next month, plus tens of millions more in the coming months.

“Daffodil Month is the Canadian Cancer Society’s prime fundraising and awareness month, so we are very concerned about the impact of the pandemic,” said CEO Andrea Seale.

“Like so many health organizations and charities, the people we serve need us more than ever because of the pandemic, but social distancing and a faltering economy makes fundraising much harder.”

The envisioned $10-billion fund would be easier for charities to access than low-interest loans or repayable grants, said Samantha Nutt, founder and executive director of War Child Canada.

“It can’t come soon enough because every day I know people are making really tough decisions,” she said.

“The longer we delay this, the more catastrophic it will become.”

Nutt said the Liberals appear open to helping out beyond what they’ve already done and the hope is that in coming days there may be more direct help announced.

In a recent report, Cardus recommended a different way to help hard-hit charities.

Cardus vice-president of external affairs Brian Dijkema and Sean Speer, a one-time senior economic policy adviser to former prime minister Stephen Harper, recommended that governments match dollar-for-dollar private donations made between April 1 and July 1.

Such a program, the two wrote, could aim to make up the roughly $830 million in monthly donations charities received in 2018, costing provincial treasuries $1.25 billion, but avoiding even more costly closure of services “desperately needed in the coming weeks and months.”

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