Stabilizing the nonprofit sector to rebuild after COVID-19

Stabilize the nonprofit sector to rebuild Ontario

Imagine communities without nonprofits and charities – no summer camps, no minor softball or soccer clubs, no museums, art galleries or theatres, mental health services, women’s shelters, immigrant services, community health centres, food banks, nonprofit housing. Every Ontarian has benefitted from at least one service or program of a nonprofit or charity.
Yet, the sector is at a precarious tipping point. ONN estimates the sector’s economic losses are in the range of $1.8 billion in just the first three months since emergency closures.
The pandemic means Ontario’s nonprofits and charities face imminent closure, and the losses will be devastating to Ontario communities, large and small. We cannot afford for the nonprofit sector to collapse. We must invest in organizations now.
This is not about emergency funding. As the Ontario government makes plans to reopen the province, the window of time is closing to help stabilize nonprofits and charities, and ensure they are ready to rebuild the economy and communities.

The solution: Working together with government

ONN recommends:

1. The Ontario government create a stabilization fund of $680 million for the nonprofit sector to ensure that nonprofits and charities can help rebuild the economy and communities.
   This funding can come via the unallocated portion of the $3.7 billion set aside for “Supporting People and Jobs” in Ontario’s COVID-19 Action Plan, through a simple application process administered by the Ontario Trillium Foundation
2. The Ontario government create a nonprofit advisory table to inform the Cabinet committee on the economic recovery

Gaps in current government supports

Revenue streams have taken a major hit, and current government supports – from all levels of government combined – will not reach all nonprofits and will not be enough.

Federal mitigation measures to date translate to approximately $883 million of relief for the Ontario nonprofit sector. Provincial measures add up to about $237 million. It is not a matter of cutting into profit margins for these organizations; any loss of ticket sales, donations, event sponsorships, or service revenue translates immediately into pay cuts, layoffs, and closures.

Fallout for Ontario’s economy

Nonprofits are not just about service delivery: the sector contributes $50 billion to Ontario’s GDP. Any shrinkage in the nonprofit sector’s economic activity will not only devastate clients and community members – it will also have a direct effect on the economy.

Recovering and rebuilding

People and communities are relying on nonprofits for support during COVID-19 and will continue to rely on their community expertise and experience in the recovery phase. From housing supports, health care, job training, child care access, mental health supports and more, Ontarians will need local partners in the recovery phase. Nonprofits are already positioned on the ground and across the province to serve.

Stabilizing the nonprofit sector with a $680 million fund can save thousands of jobs, mitigate the impact on local economies, and prevent downstream costs from deterioration of health and well-being caused by the pandemic.

Our communities need nonprofits and charities to survive. Our governments need these organizations to make communities thrive again.

Three provincial opposition parties support the stabilization fund

Andrea Horwath, Leader, Ontario’s Official Opposition, Ontario NDP

Excerpt from May 29, 2020 letter to the Premier of Ontario:

“On March 20, the NDP asked that the government include a stabilization fund for non-profit organizations in your Economic and Fiscal Update. I ask you today to support the request for a stabilization fund to assist non-profit and charitable organizations in the province. Ontario’s non-profit sector employs tens of thousands of staff in full and part-time capacities and provides meaningful employment in social enterprises to thousands. From sports clubs to immigrant services, museums to food banks, these organizations often employ predominately female staff, folks facing barriers and organize an indispensable group of volunteers who support program delivery and fund-raising efforts. This work contributes to the province’s GDP while receiving less than half their revenue from government sources.”

“Further, as recovery plans get underway, it makes good sense to create a ‘non-profit advisory table’ to provide insight and input to your government on those recovery plans and how non-profits and charitable organizations fit into this picture. Given they exist across the province, their staff and their ongoing work will be instrumental in ensuring a positive social and economic restart.”

Read the full letter

Mike Schreiner, Leader, Green Party of Ontario

Nonprofits contribute $50 billion to our province’s GDP and employ a million people in Ontario. They need urgent financial relief to keep paying staff, and continue offering essential services across a range of community programs during this pandemic. Those that are closed for the duration, like sports and arts groups, are at risk of folding. Many others, like assisted living, child care, women’s shelters, and community health care are pulling out all stops to continue to meet their missions under crisis conditions. Governments have a responsibility to provide stabilization funding so these important community groups can survive the mass hardship caused by COVID-19.

While I support the initial funding of $148 million to municipal social services and $40 million for residential service providers, the province must be prepared to use additional contingency funding to help a much broader range of nonprofits organizations that help our communities thrive.

John Fraser, Liberal House Leader, MPP Ottawa South

The COVID-19 crisis has caused significant revenue loss and layoffs within the nonprofit sector, changing the way that programs and services can be delivered. Overall, the pandemic has reduced organizations’ ability to do the vital work of serving their communities.

The nonprofit sector is in need of a stabilization fund, supported by the provincial government, so that the organizations we rely on can continue to do their important work, prevent permanent closures and major job losses, allow them to adapt to our new reality and ramp up operations quickly.