Funding Matters!

A recent study by the Canadian Council on Social Development found that non-profit and voluntary groups now devote a disproportionate amount of time to securing funds and reporting to funders. This time-consuming process diverts organizations from their key activities and affects the programs and services they provide to millions of Canadians.

What is wrong with greater accountability? Canadians want to know that their tax dollars are being spent wisely. The issue is that the current emphasis on accountability to funders-through onerous reporting procedures-is most often at the expense of accountability to program participants and their communities.

Monitoring requirements have taken on a life of their own, imposing heavy demands that threaten the sustainability of many organizations, particularly smaller ones.

Not surprisingly, staff fatigue is rising. The new funding climate has placed greater demands on staff and volunteers at most organizations. In fact, 57 per cent of groups surveyed reported greater difficulties in staying connected to their constituencies. Other worrisome trends include:

• Project funding means that organizations must hire and let staff as each cycle begins and ends or find money to bridge salaries until the next project-funding period. The uncertain funding climate certainly impedes their ability to plan.
• Seven of ten organizations surveyed said the funding changes had affected their beneficiaries, while 77 per cent said the new funding practices had restricted their ability to meet community needs.
• As organizations scramble to qualify for narrowly prescribed program funding, some are being pulled away from their primary mission, which may ultimately hurt their credibility in the community and may hurt the community itself. One-third of organizations surveyed said they had experienced "mission drift."
• Advocacy has historically been an integral role for many non-profit and voluntary organizations. But some groups are speaking out less often on behalf of their constituencies because they are concerned that it may hurt their efforts to cobble together the money for programs and partnerships in this new funding climate.
• Cleavages in the sector have opened up between large organizations and smaller groups that are less equipped to compete for funding dollars.
• Organizational instability because of volatile funding makes it difficult for groups to build social capital and foster active citizenship.

For more information about the report Funding Matters, contact the Canadian Council for Social Development. To read the report online, go to www.ccsd.ca/pubs/2003/fm/.

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