Why funding reform?
Whenever we ask the sector, “What is the most important issue facing your organization?” the hands-down winner is the same: funding reform!
Community nonprofits in Ontario want to experience greater funding sustainability, adequacy, and predictability. Beyond keeping the doors open, though, those organizations that deliver services on behalf of government face challenges in meeting growing administrative requirements for financial and outcome reporting even as program rules and budget restrictions become ever more rigid.
At least thirteen Ontario ministries have service agreements with nonprofit organizations. Across and even within ministries, different funding, administrative and accountability policies and practices are used. This consumes excessive staff time in both sectors. The provincial government’s funding practices and processes are often overly rule bound, risk averse and output focused, without necessarily strengthening accountability and results for citizens and communities.
How can we change this as a sector?
The challenge is significant and the goal is ambitious: Nonprofits want an entirely new funding relationship with government. Funding reform is a long-term project to reduce the administrative burden on both nonprofits and on government itself so we can all focus on delivering program outcomes in a way that respects our missions, visions, and values, on one hand, and the government’s commitment to transparency and accountability on the other. Our goal is to transform the funding relationship by 2020.
What is ONN’s role and what’s happening?
As an issue that crosses sub-sectoral lines and that affects so many organizations, funding reform is a key priority for our network.
In 2012, ONN found an opening to address funding reform via the Open for Business (O4B) process. A joint government-nonprofit Funding Reform Steering Committee was formed to oversee adoption of the O4B recommendations. Progress was slow, and the committee was realigned in 2014.
Signs have recently emerged, however, that there is now government interest to engage in a joint funding reform process. Better funding practices are now being tested by government and, in some cases, scaled up and across ministries. Aided by broader government initiatives such as the Transfer Payment Administrative Modernization (TPAM) project and the Open Data initiative, the latest round of funding reform talks could result in tangible, positive changes for nonprofits that deliver services on behalf of government.
- Systems planning across ministries and community planning across organizations working in related program areas
- Achieving outcomes, not just managing compliance, recognizing that progress in tackling complex issues is not always linear
- Funding flexibility within reasonable limits, allowing for long-range planning and taking into account real costs, such as organizational administration, professional development, evaluation, and quality assurance
- A streamlined interface for nonprofits to interact with government ministries, including:
- standardized and simplified administrative processes
- one-time reporting of basic information
- technologically-supported application and reporting processes
- clear and timely communications throughout the funding cycle
- proportional risk management
- Data-driven decision-making supported by an Open Data framework
- Conscientious relationship management that builds trust and cooperation.
The TPAM Office has proposed five key consultation topics to work on over the next year (2015-2016) with nonprofits engaged in the Forum:
- Framework for funding in different models (performance, expenditure, mixed) – how to increase budget flexibility in various funding models.
- Defining administrative costs – examining actual costs vs. allowed costs; what government should cover; issues in multi-funder situations.
- Consolidated reconciliations and audited financial statements – reducing the reporting burden.
- Grants Ontario – improving the user experience; scaling up to include other programs.
- Self-serve functions for funded nonprofits – “My account” functionality and eventually streamlined/automated access to historical and current funding information across programs.
Maureen Fair, Executive Director, West Neighbourhood House
David A. Ferguson, Executive Director, Ottawa-Carleton Association for Persons with Developmental Disabilities (OCAPDD) & Open Hands
Lorris Herenda, Executive Director, Yellow Brick House, Richmond Hill
Bethany Obermayer, Director of Finance and Human Resources, JobSkills, Newmarket
Meri Saunders, Director of Finance and Administration, Ontario Federation of Indigenous Friendship Centres
Debra Shime, Vice President, Community Impact, United Way Toronto
Cathy Taylor (Co-chair), Executive Director, Ontario Nonprofit Network
Ontario Public Service
Peter Armstrong, Director, Programs and Services, Ministry of Tourism, Culture and Sport
Sanjeev Batra, Director, Enterprise Wide Audit Service Team, Ontario Internal Audit Division, Treasury Board Secretariat
Rick Beaver, Director, Voluntary Sector Relations Unit, Ministry of Citizenship, Immigration and International Trade
Linda Haldenby, Director, Programs and Community Development, Ministry of Attorney General
Laura Pisko, Director, Health Promotion Implementation Branch, Ministry of Health and Long-Term Care
Beth Puddicombe, Vice-President Community Investments, Ontario Trillium Foundation
Barbara Simmons, Director, Community Supports Policy Branch, Ministry of Community and Social Services
Robert Tee, Director, Enterprise Financial Services and Systems, Ministry of Government and Consumer Services
Greg Wootton, Lead, Program Review and Transformation Project, Corporate Services, Service Ontario
Effective January 2015, ONN’s funding reform process is guided by a joint nonprofit sector-government table called the Joint Funding Reform Forum (JFRF), co-chaired by ONN’s Executive Director and a senior official in the Ministry of Citizenship, Immigration and International Trade (MCIIT). The JFRF’s terms of reference are linked here. Work on the government side is progressing primarily through the TPAM project. Some of the objectives we plan to achieve with this project include:
- A set of simplified standard contracts, with a multi-ministry umbrella agreement option for organizations receiving funding via multiple programs
- Increased budget flexibility for organizations with a proven track record
- Greater use of technology to automate routine reporting and reduce repetitive interactions such as entering basic (“tombstone”) information and filling out salary disclosure reports for multiple ministries
- Streamlined financial reporting based on appropriate risk management
- Greater emphasis on outcome reporting
To provide guidance and direction to the process over the next five years, the Joint Funding Reform Forum has developed a vision document: ONN Vision 2020 – Funding Reform.2015.
With a collaborative spirit from government, ONN is hopeful for real progress in the coming year or so. Stay up to date on the funding reform issue by subscribing to ONN e-news.
The Legacy of Open for Business: Cathy Taylor, Ontario Nonprofit Network
Business Sector Strategy: Not-for-Profit Sector: Government of Ontario. Created with the Ontario Nonprofit Network.
Fair Exchange: Public Funding for Social Impact through the Nonprofit Sector: Marilyn Struthers