Foundation Magazine partnered with Sage Intacct to have a conversation with a group of leaders of a range of nonprofits and charities to gain insights into the way their organizations, and similar groups across the country, are approaching the finance challenges facing our sector today. We wanted to hear how they are coping, the solutions they turn to, the tactics they employ and the expectations they have for their futures. Many sectors have been rocked and shaken by the pandemic, by the necessary restrictions which kept most of us away from our usual approaches to finding funding, working with donors, providing services to those who rely upon us, and keeping finance healthy. The lifeblood of any organization flows on the strength of its finances and all executives have the finance role, whether in name or by extension. It is incumbent upon them to ensure their fiscal health endures. This report is the result of those conversations and we thank Sage Intacct for making this possible, and we thank the participants for taking the time to share their experiences and their insights. (One participant asked their specific name not be used and we felt that individual’s comments are important to be heard.)
The Participants.
Peter Weizenbluth, CFO, Campfire Circle (formerly Camp Ooch and Camp Trillium).
Lesley Fox, CEO, Furbearers.
Jane Doe, Financial Manager, Community Charity, Western Canada.
Ellen Frood, Executive Director, Sage Haven Society.
Rob Appleton, Executive Director, Arthritis Research Canada. Naumana Khan, Director Programs, Humanity First.
Michelle Colero, Executive Director, Bladder Cancer Canada.
Lesley Bayne, Executive Director, The Donkey Sanctuary of Canada.
Richard Morgan, Executive Director, Humanitarian Coalition.
Foundation Magazine (FM): Thank you all for speaking with us about this crucial aspect of your organizations’ future. The pandemic and other strong influences are reshaping some of the ways we think about finance and our organizational structure. This special report is to provide our readers with insights from their peers and we appreciate your willingness to share.
FM: What’s the biggest challenge you face in the short term?
Lesley Fox, CEO, Furbearers: In the short term, we are concerned about the economy and discussions related to inflation, rising costs and a possible recession. Economic instability has the potential to reduce donations, so no doubt all charities are reconsidering their approach to fundraising. The time is now to implement a variety of fundraising strategies that aren’t dependent solely on the same group of donors.
Ellen Frood, Executive Director, Sage Haven Society: Our counseling and outreach programs and services have largely been face-to-face. Through the beginning of COVID we were forced to find ways to deliver services to clients using new technology. Now we continue to look for the balance between remote communications and one-on-one. This would be the same with other gender based violence organizations and intimate partner counselling programs. We served a number of people who are or may become un-housed and who live precariously. Finding ways to maintain contact can be very difficult. In come cases we have been able to provide phones but the phones can become legal tender. Our challenge is building trust and good relationships.
Rob Appleton, Executive Director, Arthritis Research Canada: As a charity, the biggest concern is always funds to operate our organization. The current volatility in the world has created inflationary pressures that could impact our funders, donors and certainly our staff. The funders and donors may not be able to assist us at a higher level because of the pressures on their personal situation or organization. The inflationary pressure will impact our staff and we are not guaranteed to be able to address it to the level that they may expect us to. As a charity we are very price sensitive as we try to stretch every dollar future. Since granting agencies do not account for inflation, it will impact all of our finances and will continue to reduce the amount of research per dollar that we are able to conduct.
Jane Doe, Financial Manager, Community Charity, Western Canada: ECE qualified staff in our programs are not eligible for the government’s wage enhancement to those with that qualification working in childcare. If we are not able to provide that we will loose well-qualified staff who need the extra money to address their family budgets. These are people who have been with our organization over 5,10 years with valuable skill sets gained through the provision of professional development. Many other NPOs have to address this as well in the province. Our fundraising has been impacted throughout COVID. As well, our social enterprise thrift store has given away more than we made to families/individuals which are living in poverty over COVID. It is also slow to gain traction as volunteers seem to be hard to find these days.
Naumana Khan, Director Programs, Humanity First: There is definitely a dangerous decline in donations and an increase in the number of clients.
Michelle Colero, Executive Director, Bladder Cancer Canada: As a small grassroots nonprofit, it can be difficult to compete with the advertising spend of larger organizations — nonprofit as well as for-profit organizations. Inflation and a potential for a recession can significantly decrease disposable income, which trickles down to donor support and subsequently risk the programs we can offer to patients.
Lesley Bayne, Executive Director, The Donkey Sanctuary of Canada: We are very concerned with what’s going on in the economy right now. Things like inflation and interest rates are impacting a lot of our donors. They are struggling themselves. So, trying to find the money to donate to charities while meeting their own financial needs is really a struggle for some of them. We are finding this to be quite a challenge. It’s tough, but within this challenge are many other issues. We have a handful of paid staff who do really skilled work.
Peter Weizenbluth, CFO, Campfire Circle: The biggest challenge we face in the short term is the labour market. The pandemic has upended the traditional employee/employer relationship and we are seeing organizations across industries compete for the same talent. This has forced many to adapt their practices and offerings in order to attract and retain top talent – and those organizations with limited resources are having difficulty competing. Given the increased competition for seasonal staff, we are already recruiting for our summer staff positions, even though our summer programs are more than seven months away. As we look to recover fully from the pandemic, and execute on our strategic growth initiatives, our success is dependent upon having sound recruitment and retention strategies in place. We are a people-first organization, so we view our staff and volunteers as our greatest asset.
We also recognize the challenges that the current economic situation and high inflation pose for us, even in the short term, as we experience the rising costs of goods and services and monitor the impact the economy may have on the giving patterns of our donors and partners.
Richard Morgan, Executive Director, Humanitarian Coalition: The biggest challenges for the Humanitarian Coalition are in some ways common to all charitable organizations: how to raise the resources to deliver the programs compelled by our mission. In our context, only 6-11 percent of Canadian philanthropy is generally directed towards international concerns, yet by any measure, that is where the greatest human needs are found. We are trying to grow awareness of international humanitarian crises through traditional and new media, and also looking to create new collaborative approaches and partnerships to then mobilize resources and deliver aid efficiently, effectively and with the most impact on those most in need in an emergency.
FM: Wondering about the role of technology. There are many challenges in your answers to the first question and it can be tough to navigate for any organization. How do tech trends and society’s escalating adoption of tech affect your own planning?
Fox: The Fur-Bearers regularly relies on technology to amplify our message and to connect with donors. Our primary approach to using technology is to ensure our message and social media channels are updated regularly. We strive for authenticity, engagement and use our many digital tools to acknowledge and thank our supporters. We evaluate the success of our digital communication strategies by tracking a variety of metrics including website visits, engagement, and number of likes, shares, and follows on social media. For a small organization, we heavily invest in digital communications, partly because it’s affordable and has tremendous reach. Adaptability and flexibility are keys to success, as adopting new technologies may allow us to reach our goals more effectively and efficiently.
Doe: We provide both in person and virtual support to families, this has caused a crunch in staff time as the funders want us to provide direct service, but some of the clients are not ready for in person programs so we are stretched. Adjusting to these trends rapidly make me tired to be honest. It’s been a long haul! I’m also ageing out of work in the next couple years. We ask our IT company to assist in this, they understand charities and our need to budget. We can only do what we can with funding, if we had more, there would be an opportunity to explore this more.
Frood: Yes we do evaluate new technology and our IT person is key to our organization maintaining current software. We have an upgrading list so that we are aware of when technology needs to be replaced so that this can be included in capital planning. I would not say we fall behind, but there are programs we could be taking advantage of, i.e. a contact management system and appointment scheduling.
Appleton: As a research organization, we try to adapt to the evolution of technology. For our studies we have continued to use paper surveys but have added the option of online surveys. The acceptance of these types of technology has improved the effectiveness of our studies and data collection.
On the financial side, we have moved most of our payments away from a cheque in the mail and are using e-transfer and other electronic payment methods. We are not concerned about being the first to adopt these methods, we prefer to take a conservative approach and have them proven before we adopt them.
Khan: We are up to date in the technology as we try to modernize our operations and processes. However, we are unable to fully benefit from the new technologies due to the high cost of implementation.
Colero: Bladder Cancer Canada has always been a virtual organization, and since COVID, patients and caregivers are more comfortable using technology.
We are constantly evaluating technology and the opportunities it may provide. We aim to keep up with the changes in technology but must remain flexible and adaptive due to the limited resources we have as a small nonprofit organization.
Bayne: I look at this two ways: For us, social media is part of technology but added to this are the platforms we can use to reach our donors. For example, things like being able to do a will on-line instead of going into a lawyer’s office is a big one for us. This is such a different way of doing things and it impacts the way in which we try to reach legacy donors. We no longer advertise through lawyers.
We know that social media has changed the face of giving and we have just recently started up on TikTok while at the same time managing our Facebook and Instagram accounts. We utilize platforms like Razor’s Edge. It’s really changed the way we do things. It’s allowed us to reach more donors because it has a lot more capacity for on-line donating. But a lot of people are really leery of online donating due to the amount of scams that seem to be proliferating everywhere. We receive a lot of feedback from our donors about online scams and we often wonder how we can keep up. For all the great things that technology brings, it also brings some tough questions and challenges for us.
Weizenbluth: Staying relevant from a technology perspective allows us to meet and interact with our stakeholders more effectively, whether they are a donor, a community volunteer or program participant. Charities and NFPs today are faced with a growing need for their services and the use of technology can help them leverage existing resources to meet this increased demand (ie doing more with less) within the community, in a cost-effective way.
Technology offers a way forward for NFPs to amplify their impact in a sustainable way. Whether it be through operational efficiencies or the ability to scale operations, it provides opportunities to help level the playing field across organizations.
I believe organizations that ignore technology risk being left behind as society moves forward. While they may not see the immediate need for change internally, the people they serve and who support their work do expect to engage with the organization in relevant and current ways, so the expectation is there for ongoing adoption. The rate of technological advancement is only accelerating and it’s vital that organizations get comfortable with change as they look to strengthen their operations.
We are always looking at ways to leverage technology to support our mission, whether it be collaborative tools within a hybrid workplace or automation that enables our team to focus on the value-add services that sometimes get sided-tracked due to administrative burden. We have also intentionally invested in technology that directly improves our ability to serve and reach more kids and families across the province.
Morgan: We don’t have a choice but to respond to them. For example, whether one is concerned about cyber fraud, the decline of traditional media, demographic shifts and comfort with technology, we need to adapt. In terms of evaluating new technology, it depends on what you mean. Our donors overwhelmingly give to our humanitarian appeals online. So we assess online giving platforms carefully, we assess carefully how we are spending scarce marketing dollars with Google, Facebook, Twitter, Linked In, etc. In terms of our hardware and software, it’s need driven combined with keeping up with trends and where see most ROI or impact or value.
I would imagine most non profits feel they are falling behind. We are constantly trying to maximize our program dollars and the public never wants to see us invest in admin or tech, so that’s always constrained.
FM: What are the key factors which influence your long term planning, resources and strategy?
Fox: Investing in your staff, leadership and board of directors is the best thing any organization can do to ensure long-term planning, resources and strategy. This means offering competitive wages, health benefits, generous vacation allowance and other perks including personal days, mental health days and professional development opportunities. For the past few years, we have invested more time and money into the people who make our work possible. Other key factors that influence long-term planning, resources and strategy are our supporters. Creating authentic connections, showing our donors how their support is creating impact, and making it easy for donors to engage with us, is a big consideration in all that we do.
Doe: Our work is best done in person; however we do see the value in providing virtual supports as well. We are having conversations with our major funder regarding the need for this. However it involves more money so limited. We are also at most of the community tables and share local demographics and changing situations for people in our City. Once known, we explore ways in which we can address these needs.
Frood: In our long-term planning we are looking to establish long-term sustainable funding. We do not want to go grant-to-grant. In order to facilitate this there is a need to hire a Resource Development person. Of course this takes dollars which, at this time, we do not have. We live in a small community and there are many organizations competing for fundraising dollars. It is very competitive. We need to build a strong case for support and do community education so that we rise as a charity of choice.
Appleton: Currently, our most urgent long-term planning is around the recruitment of the future leaders of our organization. The development of a high quality scientist takes years of education and commitment. We are planning 10 years out in order to recruit more scientists before the eventual retirement wave hits our organization.
I think this issue is a societal issue but what makes our situation unique is the specialization required in an upcoming scientist.
This same concern applies to our administrative staffing. As the work population approaches retirement age, there is a concern that there are not enough future leaders and specialists (nonprofit finance) being developed to take on the current roles.
Khan: The key factors are the amount of donations and the number of volunteers. We need to increase our donor base and volunteer base.
Colero: Agree about volunteerism: Our dedicated volunteers play a significant role in our programming and patient resources — an increase or decrease impacts our ability to provide support to patients. Reach to the greater population for general awareness of bladder cancer, as well as the resources that Bladder Cancer Canada offers patients, caregivers, and their families.
Bayne: We continue to wonder “How will this financial crisis turn out?” We are trying to do some strategic planning right now but it’s really hard when you don’t know what the next year is going to bring financially. We also wonder how best to plan when there is new technology coming out all the time. The Donkey Sanctuary did in fact do some pretty big planning. Last year, we designed a new addition to our current born along with a 19,000 foot training barn. We are very lucky that we have some extremely loyal donors who are getting us through this time. We are doing the construction right now and we are hoping to finish it sometime in the new year. We also have some really great financial experts on our board along with some excellent contacts. All of these people have been most helpful in trying to foresee what is coming up. But the truth is, that this financial situation has made long term planning exceptionally tough.
Weizenbluth: The key factors that influence our long-term planning, resources and strategy include better understanding the needs of our stakeholders today and in the future; evaluating current reach/impact vs long-term targets; and determining our fundraising capacity, which includes the competition for donor dollars and ability to grow funding sustainably. All of these factors can influence the scope of our operations and the timing of strategic initiatives.
Morgan: We do a multi-year strategic plan that includes a SWOT and landscape exercise and annual work plans. Social and technological trends are unavoidable challenges and opportunities.
FM: Ultimately, the challenges we all face are obstacles we must be able to climb over and survive. What other thoughts do you have about the future? Anything you’d like to share which our readers would find helpful or surprising?
Fox: You may be surprised to learn that some nonprofits and charities still don’t have budgets or strategic plans. This is the first and most just use important step for any organization —have a budget. Understand what money is coming in and where the money is being spent (and on what). This also provides transparency to donors, which is essential in today’s world. Organizations should also have a strong fundraising mix that includes a monthly donor program, legacy giving opportunities, stock transfers, events, and third-party fundraising (like Facebook birthdays). Taking advantage of all the different ways in which you can raise funds will help ensure a long and prosperous future.
Doe: The need for funders/foundations to understand the need and value of increased administration costs. COVID caused those of us non-front facing staff to take on more tasks “off the sides of our desks” and causing many more hours worked than compensated for. I am noticing that over COVID, we had access to grant opportunities for small amounts (under $20,000) that provided 10 percent to zero percent for administration costs. Our clients needed the services/support and we needed to do the work. It’s time to get over the idea that we work in this field “for the love” of it. I’m actually considering early retirement due to this.
Frood: Remember, most grants are specific to a program. What we need to be able to raise dollars for priority needs so that we can allocate funding where dollars are needed.
Appleton: Developing the future finance coordinators, managers and directors is the key. As I mentioned earlier, I see this being a serious problem as the market tightens for these skills and the nonprofit sector is competing with the private sector for talent. I lost my last Finance Coordinator to a job that paid her two times what I was able to pay her.
Khan: There should be a more robust system to access government grants and donations from large foundations. It is not easy to receive funds despite having a proven track record.
Weizenbluth: If we’ve learnt anything from the pandemic, it’s that we must be better prepared, agile and resilient in the face of uncertainty. In other words, organizations must invest for the next challenge from both an operational and financial risk perspective. Understanding critical vulnerabilities within your organization today and taking action now to address them is key to weathering the next storm and responding to future challenges.
Morgan: I think nonprofits are still facing a significant demographic shift from older generous donors and volunteers passing on and younger generations not necessarily engaged with or loyal to specific organizations rather than the cause overall. The nature of giving is changing and will challenge many non profits. This will also challenge our social fabric, as charities deliver many of their services and social goods we count on as a healthy, vibrant, equitable and sustainable social democracy. Embracing social and technological change is going to be critical.
FM: Thank you all so much for taking the time to speak with us. I’m sure our readers will appreciate the ideas and insights you have shared.
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