Show Transcript
Many not-for-profits and charities have been negatively affected by COVID-19. From loss of revenue to event and program cancellations, Kim Parlee speaks with Bruce MacDonald, President & CEO, Imagine Canada, about the impact that COVID-19 has had on Canada’s charitable sector.
Print Transcript
[MUSIC PLAYING]
- Bruce, I want to start at the highest level. How was and how will the charitable sector be affected by COVID-19?
- Well, it's being profoundly affected. I mean, our Chief Economist, at the onset of the pandemic, did some financial modeling along with some others. And they were looking at financial forecasts that indicated that it was likely that, with six months of social distancing, and we're already over halfway there, that charities and nonprofits would stand to lose about $15.6 billion this year, with almost 200,000 jobs lost. And so for our sector, that is enormously difficult to rebound from.
- And not just for your sector, but I think for any sector. I mean, it's an extraordinary number. What do you do? I mean, what are-- I mean, you know, I guess, what are the specific problems that the charities are going to have to navigate as they move forward? Because I would expect fundraising, very important, you know, finding people, the new work situation. I mean, if you were to categorize all the things that charities need to think about, what would they be?
- Well, I think first and foremost, one of the things that organizations are dealing with is in many parts of our charitable sector, which is quite diverse. Demand is growing significantly. So first and foremost, organizations are saying, how do we serve those people who are coming to us in need.
And if their organization has been dependent on volunteers, in-person-type programs, they're having to adapt quickly to put them online. From a fundraising perspective, organizations that have been heavily reliant on special events are really finding things problematic.
Most events have been canceled, door to door canvassing isn't there. Even major gift fundraising, which has largely been dependent on human in-person meetings and interaction, every one of these fundraising streams has been affected, and organizations are trying to figure out how to adapt.
The other point I should note is that this is significantly different than the 2008, 2009 economic recession where, in most cases, charitable leaders said, there were other streams of revenue they could go to. There were other industries that they could go to if one was particularly hard hit. In this case, it seems that there's nowhere to turn.
- And you're not painting a very good picture, I think, in terms of what people are going out to navigate. And I'd expect another place where charities often get some funding when they don't have other places to turn is governments. But as we see day in and day out, governments are becoming increasingly overextended in what they're funding. So what is that going to mean?
- Yeah, so I think there's two things. So one is, at a federal government level, it's been wonderful to see the inclusion of charities and nonprofits in some of the large programs, like a wage subsidy or a rent subsidy program. So that's great news for our sector. It's providing people with work right now. I think those that are reliant on ongoing government funding, though, we're thinking that the pain is being deferred. So many governments are standing with those organizations right now and not reducing funding.
But to your point, as the cupboard gets bearer and bearer and governments downstream decide to tackle deficits, we think it's likely that organizations who are largely reliant on government funding need to be thinking now about adopting the revenue streams to predict or project that maybe those government funds might be clawed back a bit in the future.
- I know from one of our conversations earlier, one thing that was mentioned also is we're seeing a disproportionate effect on women in employment in the charitable sector. Tell me a bit about that.
- Yeah. Well, if you look at the 2.4 million people in Canada that are employed by charities or nonprofits, about 70% of those are women. And so as we look at the layoffs that are taking place across the country, those are affecting, at a disproportionate level, females who are employed in our sector.
So it is really important that support services are put in place, that organizations themselves innovate and adapt quickly, first and foremost so that those services are there for Canadians. But from an employment perspective, to ensure that those people who are working in this sector can get back to work.
- Part of the reason we're talking is because I know that we are working together on a webinar that is coming up on June 26 at 2:00 PM Eastern to allow charities to come in and have a conversation about what the economic outlook is. And what is your intent in that? Why do you think that is so important?
- Well, you know, for the last three months, really, the leaders of charities and nonprofits have had their head down. They've been trying to react quickly, make sure those services move online, look at the financial health and well-being of their organizations, make sure the boards are functioning, make sure their staff are safe.
What we're seeing, though, is they're now turning and looking to the future, and saying, what does the summer, fall, and into 2021 look like. And we have a synergistic relationship with the health and well-being of the Canadian economy.
You know, as foundations have money because their investments are strong, as individuals are employed, as governments have dollars and corporations invest, the health and well-being of the Canadian economy is related to whether those dollars are available for our sector.
And so for charity leaders and non-profit leaders, the opportunity to hear from the chief economist of TD Bank and the chief economist for Canada's charities and non-profits in discussion about the future of the economy gives them a bit of insight into what the future might hold so they can plan accordingly.
- And just to dig in a little deeper on that. In terms of that planning accordingly, what are the kinds of things you think that they should be thinking about in terms of, you know, broad level, what the economy looks like, or the kinds of planning, fundraising, employment things they need to be thinking about?
- Well, they'll be looking at what are the projections around the growth of the economy. Is it going to grow or is it going to stagnate? Are we projecting recession for a long period of time?
For those who do a lot of work in the major gift area, well, if markets are down, if that's what the projections are, and those Canadians that have dollars from which they draw for major gifts might be less, well, that affects the future of their projections for their organizations around the kinds of dollars that might come from them.
So I think also, just even what employment numbers might look like in the future. Because there's many small gift donors, like millions upon millions of small gift donors in this country. If they're worrying about food and rent right now, what does that mean for the $25, $50, or $100 gifts that they've been traditionally making in the past? And I think this information, just hearing what the thinking is at a macroeconomic level will inform boards and staff as they have conversations to think about their fiscal forecast going forward.
- It's an important conversation, Bruce. Thanks so much for talking with us today, and we'll talk to you again soon.
- Thanks very much.
[MUSIC PLAYING]
- Bruce, I want to start at the highest level. How was and how will the charitable sector be affected by COVID-19?
- Well, it's being profoundly affected. I mean, our Chief Economist, at the onset of the pandemic, did some financial modeling along with some others. And they were looking at financial forecasts that indicated that it was likely that, with six months of social distancing, and we're already over halfway there, that charities and nonprofits would stand to lose about $15.6 billion this year, with almost 200,000 jobs lost. And so for our sector, that is enormously difficult to rebound from.
- And not just for your sector, but I think for any sector. I mean, it's an extraordinary number. What do you do? I mean, what are-- I mean, you know, I guess, what are the specific problems that the charities are going to have to navigate as they move forward? Because I would expect fundraising, very important, you know, finding people, the new work situation. I mean, if you were to categorize all the things that charities need to think about, what would they be?
- Well, I think first and foremost, one of the things that organizations are dealing with is in many parts of our charitable sector, which is quite diverse. Demand is growing significantly. So first and foremost, organizations are saying, how do we serve those people who are coming to us in need.
And if their organization has been dependent on volunteers, in-person-type programs, they're having to adapt quickly to put them online. From a fundraising perspective, organizations that have been heavily reliant on special events are really finding things problematic.
Most events have been canceled, door to door canvassing isn't there. Even major gift fundraising, which has largely been dependent on human in-person meetings and interaction, every one of these fundraising streams has been affected, and organizations are trying to figure out how to adapt.
The other point I should note is that this is significantly different than the 2008, 2009 economic recession where, in most cases, charitable leaders said, there were other streams of revenue they could go to. There were other industries that they could go to if one was particularly hard hit. In this case, it seems that there's nowhere to turn.
- And you're not painting a very good picture, I think, in terms of what people are going out to navigate. And I'd expect another place where charities often get some funding when they don't have other places to turn is governments. But as we see day in and day out, governments are becoming increasingly overextended in what they're funding. So what is that going to mean?
- Yeah, so I think there's two things. So one is, at a federal government level, it's been wonderful to see the inclusion of charities and nonprofits in some of the large programs, like a wage subsidy or a rent subsidy program. So that's great news for our sector. It's providing people with work right now. I think those that are reliant on ongoing government funding, though, we're thinking that the pain is being deferred. So many governments are standing with those organizations right now and not reducing funding.
But to your point, as the cupboard gets bearer and bearer and governments downstream decide to tackle deficits, we think it's likely that organizations who are largely reliant on government funding need to be thinking now about adopting the revenue streams to predict or project that maybe those government funds might be clawed back a bit in the future.
- I know from one of our conversations earlier, one thing that was mentioned also is we're seeing a disproportionate effect on women in employment in the charitable sector. Tell me a bit about that.
- Yeah. Well, if you look at the 2.4 million people in Canada that are employed by charities or nonprofits, about 70% of those are women. And so as we look at the layoffs that are taking place across the country, those are affecting, at a disproportionate level, females who are employed in our sector.
So it is really important that support services are put in place, that organizations themselves innovate and adapt quickly, first and foremost so that those services are there for Canadians. But from an employment perspective, to ensure that those people who are working in this sector can get back to work.
- Part of the reason we're talking is because I know that we are working together on a webinar that is coming up on June 26 at 2:00 PM Eastern to allow charities to come in and have a conversation about what the economic outlook is. And what is your intent in that? Why do you think that is so important?
- Well, you know, for the last three months, really, the leaders of charities and nonprofits have had their head down. They've been trying to react quickly, make sure those services move online, look at the financial health and well-being of their organizations, make sure the boards are functioning, make sure their staff are safe.
What we're seeing, though, is they're now turning and looking to the future, and saying, what does the summer, fall, and into 2021 look like. And we have a synergistic relationship with the health and well-being of the Canadian economy.
You know, as foundations have money because their investments are strong, as individuals are employed, as governments have dollars and corporations invest, the health and well-being of the Canadian economy is related to whether those dollars are available for our sector.
And so for charity leaders and non-profit leaders, the opportunity to hear from the chief economist of TD Bank and the chief economist for Canada's charities and non-profits in discussion about the future of the economy gives them a bit of insight into what the future might hold so they can plan accordingly.
- And just to dig in a little deeper on that. In terms of that planning accordingly, what are the kinds of things you think that they should be thinking about in terms of, you know, broad level, what the economy looks like, or the kinds of planning, fundraising, employment things they need to be thinking about?
- Well, they'll be looking at what are the projections around the growth of the economy. Is it going to grow or is it going to stagnate? Are we projecting recession for a long period of time?
For those who do a lot of work in the major gift area, well, if markets are down, if that's what the projections are, and those Canadians that have dollars from which they draw for major gifts might be less, well, that affects the future of their projections for their organizations around the kinds of dollars that might come from them.
So I think also, just even what employment numbers might look like in the future. Because there's many small gift donors, like millions upon millions of small gift donors in this country. If they're worrying about food and rent right now, what does that mean for the $25, $50, or $100 gifts that they've been traditionally making in the past? And I think this information, just hearing what the thinking is at a macroeconomic level will inform boards and staff as they have conversations to think about their fiscal forecast going forward.
- It's an important conversation, Bruce. Thanks so much for talking with us today, and we'll talk to you again soon.
- Thanks very much.
[MUSIC PLAYING]
