Tag Archives: Economic crisis; voluntary sector; charitable giving; Vancouver Foundation; United Way; Salvation Army

The market meltdown and voluntary sector: News media beginning to take notice

In a previous post I criticized Canadian news media, key government departments and leading non-profit organizations for lagging in their reporting and public commentary about the impacts of the global economic slowdown on the voluntary sector. Although not all have begun to speak publicly, kudos to those that have done so. Among news media, the public broadcaster and Globe & Mail have reported in remarkable synchronicity this week on how the market meltdown is impacting charitable giving across the country.

Looking just to the CBC and Globe coverage some interesting patterns may be starting to emerge. Last week the Salvation Army in Ottawa reported a “jump” this year in demand for its services, while donations have dropped by $80,000. Fuel costs have also doubled for a number of agencies. The Salvation Army’s national office reports paying $1-million extra in fuel nationwide this year over last year. Meanwhile donations have not kept pace, dropping approximately $100,000 from this time last year. This news is especially troubling for charities serving communities in remote locations that depend on air or ocean transport of donated goods.

In British Columbia the situation is even more dire. The Vancouver Foundation, Canada’s largest community foundation, reports having lost $100 million to the global financial crisis and will have to reduce between $10-$15 million of funding for Vancouver community initiatives, affecting everything from youth ballet programming to blood services. The Greater Vancouver Food Bank Society, which feeds 25,000 people a week has also been hit hard – it reports a 20 percent drop in donations over the summer, which is threatening its ability to meet a likely increase in demand for the coming year. “We will never deny food to anybody and we hope we never reach that point,” said Arlene Kravitz, the society’s director of communications. “However, if the donations keep going down, we won’t have enough. We’ll have to cut.” 

In other communities, the news is not quite so bleak. Local charities in Kingston, Ontario, report that private donations have been “pouring in” despite the wider woes in the economy. According to Bhavana Varma, president of the local United Way, her charity has raised $1.6 million so far this year, more than 50 per cent of its goal and far more than it had at this time last year. In part, Kingston’s relative stability has to do with the fact that it is a small city by comparison with Vancouver, Ottawa or Toronto, where the pinch has been far sharper; but it also benefits from a stable local economy, with large public sector employers that include a university, a hospital and a military base, all of which will be relatively immune from the big job losses that are hitting large cities and those with a manufacturing based economy (at least in the short term).

The factors underlying this shift in how the national media has reported the effects of the slumping economy on the charity sector are likely mixed: we have finally moved from the single-mindedness that defines election campaign coverage, meaning that news organizations are starting to focus again on matters of greater importance than bird poop and accusations of political plagiarism; non-profit organizations are also likely becoming more proactive in their public communication activities, increasing production of information subsidies (economic updates, reports and other media releases) that are staples of the news business; and the realists among us may even argue that only now the impact has begun to finally emerge (ontological questions aside, why we are weeks behind the Brits in addressing the implications of the crisis remains unexplained). 

Regardless of the reasons for why this story is now starting to be told, it’s incumbent upon all leading social and political institutions to develop immediate solutions for tackling the problem. These should include short term actions in the form of one-time transfer payments from all levels of government to targeted charity organizations in the most affected regions and serving the most vulnerable people; long term actions that include increases in core funding by governments for the voluntary sector should also be addressed.

Canada’s voluntary sector is the second largest in the world – it engages more than 12 million volunteers, generates upwards of $112 billion in revenue, and contributes almost 7% to the Gross Domestic Product. Failing to address the impact of the crisis on the sector not only makes for bad economic policy, but it’s almost certain to intensify increased demand for charitable services, longer lineups at food banks and more people requiring the support of emergency shelters in the coming months and beyond.

Leave a comment

Filed under Voluntary Sector