FINANCIAL
STABILIT Y
Change Through
Sustainable Funding
This morning, a new generation of community leaders awoke to a fundamentally new reality than that of the generation that came before them.
Our climate is changing. Our
economy is in the midst of a fundamental
transition. The roles of government,
civil society, and the private sector are
secure sustainable and diverse sources
of financing for operations and growth?
Ultimately, stable and secure financing
will allow us to achieve the change we
seek and ensure the quality of life we
desire for the different geographic,
cultural, and interest communities we
are a part of as advanced citizens.
Adam Spence,
MaRS Discovery District
activity (Statistics Canada, 2010).
The majority of revenues for
Canadian nonprofit organizations come
from a variety of sources, including
earned revenues ( 45.1%), government
spending ( 20.9%), and contributions
from households and businesses
( 13.3%; Statistics Canada, 2010). The
in a state of flux, as are fundamental
The pursuit of sustainability for the
proportion of income derived from
assumptions of what society values and
what society will support, from the arts
to the welfare state. The cultural make-
up of our country is vastly different due
to seismic demographic shifts, and we
struggle to bridge a growing socio-
economic divide.
The new generation of emerging
community leaders meets the day with
a powerful, personal motivation to
tackle these immensely deep-rooted
issues and problems. They desire
change with the same passion as the
current generation of leaders that stands
with us in fields, offices, community
centres, and streets across the country.
But passion alone will not ensure
success. We cannot achieve the change
we seek without money. Alongside
these tremendous challenges, we feel
pressure to ensure we can keep the
lights on, make payroll, and keep our
programs running. Our present future
looks a bit bleak: less government
funding, fewer donations, constraints
to earned income, and increased
expectations.
How can we work together to
develop and deploy the capacity to
nonprofit and charitable sector is gut-
churning. It ranges from the sublime to
the ridiculous: from tree-killing reviews
of government grant financing in
pursuit of renewal of annual funding to
building competitive social enterprise
business models within a maze of
complex regulations; from months of
writing and developing partnerships for
new program grant proposals to
sleepless nights awaiting the auditor’s
report. Tens of thousands of charities
and nonprofit organizations struggle
every day in a hyper-competitive
funding environment.
We need to understand our current
conditions and challenges and
determine what we can do to build
long-term financial sustainability for
the sector.
By the Numbers: Finances in the
Canadian Nonprofit Sector
We know that the nonprofit and
charitable sector is a large and
remarkably important component of
the Canadian economy. Total economic
output for the sector, the third largest in
Canada, was $106.4 billion in 2008,
representing 7.1% of our total economic
earned revenues is a surprising figure. It
has grown from 41.6% to 45.1% of
total income since 1997; in real
numbers, earned income has grown by
135.5% during that same period
(Statistics Canada, 2011). We are
quickly approaching the status of other
nations that are well-recognized for
social enterprise activities, such as the
United Kingdom, where earned income
represents over half ( 50.3%) of the
income of charities (Pharaoh, 2008).
Challenges to Sustainability
Despite our relative size and
strength, there are major challenges to
our sector’s long-term financial
sustainability.
To read the entire article, please go to the digital
edition of the 2012-13 Canadian Donor’s Guide,
found at www.donorsguide.ca. Go to the same
page number you are currently reading, and click
here http://www.donorsguide.ca/spence.htm.
This article first appeared in The
Philanthropist / 2011 / VOLUME 24 • 2
Adam Spence is Manager, MaRS Centre for
Investing and founder SVX I Invest for
impact.
