New research insights for grant-makers

COVID-19 is putting increased pressure on Canadian charities, grant-makers are needed to step up with more money, and to distribute the funds in faster and simpler ways.  Furthermore, charities will need grant-makers to fund overheads, staff salaries and the costs of daily operations, in order to stay solvent, areas that foundations have appeared less interested in supporting.

For many, revenues are decreasing, while demand for services of all kinds have soared.  As the anticipated recession hits Canada, this will undoubtedly exacerbate an already dire situation; we will most likely see a significant widening in the charity gap between what is required and the funds available to support this work.   

In collaboration with Phil and CanadaHelps, a Canadian survey conducted by Sector3Insights among registered Canadian charities backs up these sentiments.  The researchers aimed to explore the difficulties charities experience in the fundraising process.  Although the findings may not be totally surprising, grant makers may not be aware of these challenges facing charities. It would be helpful for them to hear this message. And for charities, perhaps there may be comfort in knowing about the facts, and having them shared. Admittedly, this survey was conducted late in 2019 prior to COVID-19. But it is very likely that COVID-19 has only exacerbated the situation. 

Two key insights from the research are highly relevant to charities as they navigate the COVID crisis:

  1. Funders are not seen to be interested in funding charities’ greatest needs.  
    • The research showed that the  highest priority need for charities of all sizes is staff salary expenses and operational costs. This discrepancy puts missions in peril. 
    • Eighty-three percent (83%) of respondents felt Foundations “are not interested in funding overhead, admin, IT, and operational costs (and instead prefer to fund specific initiatives)”.  This is a fundamental disconnect between what charities need most versus what Foundations are willing to fund.  
  1. Charities say there is room to improve the fundraising process:  Easier, faster, more transparent, better communications, etc.    
    • Timeliness’ was a weakness.  Charities feel that the decision-process is too slow in making granting decisions. 
    • Furthermore, since the majority (57%) of Canadians charities are small, with annual operating budgets lower than $250,000, many respondents felt that they simply do not have the resources to produce all of the required paperwork, Q&As, applications, budgeting, etc., required by foundations. 

If there was ever a time and need to make the grant-making process work better for charities, it is now. This message needs to be shared with and well heard by those involved in making granting decisions.

About the Study

Sector3Insights conducted a quantitative survey in October 2019, among Canadian registered charities, in partnership with CanadaHelps and PHIL. CanadaHelps invited participants from its community of registered Canadian charities to complete an online survey.   A total of n=618 respondents participated in the study, yielding a measurement sample error of +/-3.9% points.  The sample profile was then weighted to reflect the proportions of small, medium, and large charities within each region of Canada, to match the universe of Canadian charities.  (Note, the opinions and attitudes of the group of charities surveyed through CanadaHelps may differ from the overall community of Canadian charities.)

Learn more at socialsector.ca. If you have questions, comments or suggestions, please do not hesitate to contact us. We would love to hear from you.

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