Red tape: Reforming transfer payment agreements
The nonprofit sector plays a vital role as an economic driver, employing about a million people in Ontario. As a sector, Ontario nonprofits receive less than half of their revenue from governments, which means they can leverage public investments – via earned income, donations, and volunteer contributions – into services that directly benefit the people of Ontario.
ONN and the nonprofit sector have been advocating for many years to reform transfer payment agreements. Nonprofits spend too long applying for funding, waiting on agreements, and reporting on government program investments. This is particularly true of nonprofits that manage more than one agreement and have to report on their spending in different budget categories across different programs and ministries.
We also hear from the sector about being asked multiple times for the same information from funders within the same government, or having to go to government program officers every time they need to shift a bit of funding from one budget line to the next. This is not a good use of anyone’s time.
Every hour that a nonprofit spends filling out cumbersome application forms, or trying to fit their budget numbers into program templates that differ from one to the next, is an hour they are not spending delivering services to people.
Across the nonprofit sector, there is a clear consensus that transfer payment agreements should be based on principles of stewardship, reciprocal respect and accountability, and administered in a way that is simple, proportional, and flexible.
Nonprofits that deliver services on behalf of government want to see administrative processes streamlined and standardized across ministries and programs. They want to improve their own efficiency by spending less time on duplicative paperwork. They want reporting processes to be easier to navigate and to be focused on the outcomes that really matter. They want the processes to be proportionate – right now the same paperwork is usually required for a $5,000 grant or a $5 million dollar one.
And finally, nonprofits have told us how important it is that any savings generated by streamlining processes be reinvested in communities to support a healthier and more resilient province.
Last winter in our pre-budget submission, ONN asked the Ontario government for a red-tape reduction initiative for nonprofits that deliver services on behalf of government.
There are about 5,000 nonprofits that currently have agreements with multiple provincial ministries, but each one is managed separately. The number of transfer payment agreements could be reduced immediately by 14 percent – without service or job reductions – simply through umbrella agreements. Streamlined, outcome-focused agreements can reduce administrative costs for both government and nonprofits.
We are pleased that the Ontario government will make transfer payment reform a priority through its Transfer Payment Consolidation initiative. This is an important opportunity to modernize funding agreements so that both nonprofits and government spend less time on administration, and more time delivering services that support Ontarians.
The nonprofit sector is an essential partner to the Ontario government across a wide variety of program areas – in child care, youth training programs, affordable housing, little league baseball, community health care, theatre programs, and so much more.
These services are vital to our quality of life in Ontario and they also provide good jobs and volunteering opportunities in the communities where people live.
It is important that our two sectors (government and nonprofits) work together to modernize service delivery and behind-the-scenes funding agreements. Our sector’s experiences on the ground, directly in communities, bring critical perspectives that are needed at the table as government plans for and implements changes.
ONN looks forward to convening nonprofits to help move this agenda forward in partnership with the Treasury Board Secretariat and the ministries that have funding relationships with the sector.