All is not well in Alberta’s non-profits, as efforts made to stabilize funding issues over the past year have been compounded by persistent systemic issues that threaten to undermine work being done in the sector.

That’s from the latest state of the sector report from the Calgary Chamber of Voluntary Organizations (CCVO) entitled Facing the Storm, which both serves as an update on the non-profit sector’s challenges over the past year, but also to their 2022 pre-election report which advocated for emergency funding.

Among the top challenges for non-profits were soaring expenses, issues with staff retention, and few resources to meet diversity goals. On the positive end of the spectrum, the report outlines the way that non-profits are uniquely situated to lead locally on issues such as climate change, political polarization, and community building.

“We look out every year and we try to figure out what’s happening for the 30,000 Alberta nonprofits that work and live here. We’re really looking at nonprofits are seeing revenues are stabilizing, which is the good news headline. The bad news is expenses are skyrocketing,” said Karen Ball, CEO of CCVO.

“The complexity and amount of need on nonprofits in Alberta is increasing at the same time, just like every organization in the province. The effects of climate change, the rising incidences of hate, the mental health pandemic are upon us, so we continue to see a very strained sector that is really facing what we think is a new normal for how non-profits and charities work in the province.”

The chamber, said Ball, was taking a different approach in advocating on behalf of the sector this year.

Prior to the last general provincial election in Alberta, the organization had made, as Ball put it, a bold ask for $300 million in stabilization funding.

The method this year, and one advocated for in their report, was to be much more strategic in asking for funding in more “bite-sized pieces.”

“We’ll try anything that gets heard. It’s not that fancy, but we’re definitely interested in being heard by government and by other supporters and stakeholders in the sector. We tried $300 million, because that’s a bold number. We were in a bold time and we really wanted to do a moonshot,” Ball said.

“We’re shifting to how can we help governments, say, ‘hey, look, maybe you can’t hit a $300 million target this year, but can you help bring some some of the wages you’re paying through some government contracts up, or can you focus on digital technology and helping us invest in AI technology?

“Those things, I think, are more tangible and maybe more aligned with the priorities of the government of the day and it helps us be a little bit more strategic or what we’re asking for.”

Non-profit revenue stabilizing in post-pandemic first

Among the identified reasons for a turnaround in finances for non-profits has been the increasing turn towards social enterprise activities and related business activities as revenue generators, along with a return to the highly competitive field of grants.

Ball used the example of a sporting non-profit operating a facility adding a cafe, as one of those social enterprise activities.

“Also non-profits might be—and this is where it matters to Albertans that are also experiencing the effects of inflation—it might mean that non-profits are raising prices if prices are charged for things like in the arts, in recreation and those kinds of services that are fee for service,” she said.

“At CCVO, we are a non-profit chamber, but we also run a job board and we run a national salary survey. Those are revenue generators for us, so we’re thinking like a business about how we expand that work and increase our market share of earned revenue against our bottom line.”

She said that grantors had remained stable throughout the pandemic in providing grants for non-profits, even as non-profit activities diminished throughout that period.

“Some non-profits that may have moved away from granting because they were raising funds through donations and through sponsorship are moving back into the granting space as well, and are pursuing grants as a revenue source,” Ball said.

“Non-profits themselves are reintroducing granting into their mix and thinking about grants that maybe are a little bit outside or a little bit tangental to their actual mission, and getting quite competitive and pursuing all any and all grant opportunities that they feel they can be eligible.”

The effect, said Ball, was that for some non-profits this serving to move their activities away from the “bottom line impact” that they have on communities.

Operations costs increasing for non-profits in Alberta

Part of the tension between the sources of funding and the realities of operating a non-profit, she said, was between the increasing costs that non-profits are facing as a result of global issues like inflation.

“One thing that’s in the report is that the average operating cost expenditure from a donation or a grant is typically between zero and 12 per cent of operations. But given the climate that we’re in right now, operating costs, just things like insurance and utilities might be making up much more than 12 per cent of an overall overhead of a nonprofit,” Ball said.

Within the report, 82 per cent of non-profits respondents to the CCVO’s 2023 survey, said that they were concerned with the rise in expenses—with half again of those respondents saying that the increases had been substantial.

“We have seen in studies that operating as high as 30 per cent can actually increase the impact of the work that the nonprofit does, so I think that there’s some education that needs to happen in the donor space about what you’re investing in, and how it has an impact,” Ball said.

“If you invest in people, maybe it’s not going directly into that after school care or that soccer program, but it’s going to make that after school care or that soccer program more impactful.”

Issues around the employment of people working in the non-profit sector, was also highlighted by the report.

People working at non-profits earn approximately 34 per cent less than the average Albertan wage, and 28 per cent of Canadian non-profits say that employees are having to take on work that would have been previously supported by volunteers.

“One thing that we’ve heard this a little different than previous years is nonprofits really thinking, how can we help the people that are working inside our organizations? How can we put our own oxygen mask on first before helping others,” said Ball.

“So we’re talking to nonprofit leaders that are saying, ‘no, we’re actually prioritizing, paying our people appropriate wages.’ We’re actually prioritizing bringing in new mental health benefits that maybe weren’t there before, and trying to make the working conditions for nonprofit workers—285,000 people, that’s more than oil and gas, forestry and mining combined employed in the sector and Alberta.”

Non-profits uniquely situated to address some of society’s biggest issues

Ball said that there were, however, opportunities for non-profits to continue to make a difference in tackling some of the biggest issues in society currently like climate change and the rise of anger and hate.

“That’s not happening in every locality around the world, but we feel like there’s an opportunity for non-profits to be at the table municipally here in Calgary, and also provincially here in Alberta. We can see that our non-profit sector is actually a resource to thinking about how to meet these kinds of challenges,” Ball said.

She said on the rising impact of hate, the situation was the same: non-profits are already well placed within communities to tackle the issue.

“We’re really lucky to have that non-profit structure that’s here, and we can rely on that structure to some degree to help people with dealing with polarity, dealing with hate, dealing with racism, dealing with all of these rising issues that are global phenomenon, but that are impacting us at the local level,” she said.

By the numbers, one third of non-profits in Alberta reported that they were affected by increasing levels of hate and anger—both from the effects of hate being directed at individuals, and from other individuals who resent the discussion of anger being directed at marginalized groups.

The report also highlighted a finding from Pollara’s Rage Index, which has found that Alberta has been frequently the province that is most moderately or very angry at issues presented by the polling firm.

“There is a bit of a silver lining here, which is as nonprofits we can advance connection. We can advance mutual care, we can advance human understanding, and we are in every community. We are central to those conversations, and we need to continue to be at those tables to ensure that this polarity begins to bring us together instead of set us apart,” Ball said.