COVID-19: CCCC Calls for a Matching Funds Program to Support Charities

This entry is part 18 of 30 in the series COVID-19.

Read CCCC’s Funding Proposal to the Federal Government

CCCC has written to the Hon. Ahmed Hussen, Minister of Families, Children and Social Development with a funding proposal to sustain and strengthen the charitable sector during the COVID-19 pandemic crisis, when demand for services is very high, but significant decreases in donations due to income insecurity threatens to destabilize charities.

CCCC’s primary goal is to ensure that as many of Canada’s registered charities as possible survive the COVID-19 pandemic crisis on the basis that every registered charity, by definition, provides a public benefit to Canadians, and thus any loss of charities negatively impacts the quality of life in Canada. Sustaining all charities therefore maintains and adds to the richness and health of our nation.

Faith-based charities provide significant public benefits to individuals, neighbourhoods, regions and the nation. For every dollar in a place of worship’s operating budget, the community receives more than $4.50 of socioeconomic value and non-members of churches are four times more likely to use a church’s community programs than are its members.

What about existing proposals?

With the viability and health of our members and the broader charitable sector at stake, CCCC continues to support Imagine Canada’s request for a Sector Resilience Grant Program but as for how that support is distributed, we have submitted a proposal that builds on think tank Cardus’ matching funds model as described in their proposal and essay.

What is a “matching funds model”?

A matching funds model means that public funds match private donations on a dollar for dollar basis up to a certain limit. In this case, CCCC suggests the prior year’s donations as a benchmark. Matching funds ensures a stable cash flow during this time of crisis and uncertainty.

Why make another proposal? What’s different about CCCC’s proposal?

CCCC focuses on the funding and distribution mechanism for the Sector Resilience program as proposed by Imagine Canada. Funding needs to be simple, quick, and equitable. The Sector Resilience Program currently follows a traditional grant process – charities complete applications, applications are adjudicated by grant making organizations, such as community foundations or national organizations like the United Way, and successful charities receive some funds. This can work well, but for the survival of the sector, CCCC proposes a simpler model.

CCCC builds on Cardus’ proposal in three key ways:

  1. Extending the timeframe from 3 months to the duration of the crisis
  2. Capping the amount of donations to be matched by restoring charities to their 2019 donation levels. Asking the government to simply fund the gap makes it easier for them to say “YES!”
  3. Clarifying that donations being matched are unrestricted donations. Capital campaigns or restricted fund campaigns are excluded. The focus is on maintaining funds for normal operations. There are other government funding programs, and specific elements of Imagine Canada’s request that relate to pandemic-specific programs.

With these adjustments to Imagine Canada and Cardus’ proposals, CCCC has set out a solution that addresses the needs of charities and government in an effort to make access funds as easy as possible for CCCC members and the charitable sector at large.

Why do we propose a matching funds model?

It is highly efficient

Administrative systems to process matching funds already exist within the federal bureaucracy (i.e. Global Affairs and Health Canada) and can be expanded rather than building from scratch. There is also less administrative burden on charities than for grant application-based models because it would only require a simple reporting of existing records.

It leverages government grants

Public support is a precondition for government matching funds. It creates a true partnership between the public and government.

It promotes charitable giving

Matching funds spurs greater giving by private donors. Studies show match money increases “revenue per solicitation by 19 percent,” and that there are long-term positive impacts. Government should focus on expanding, not shrinking, the sector’s capacity.

It only requires existing fundraising capabilities

Many charities do not have the experience, capacity or skill for grant writing. Instead, they have great expertise in fundraising from individual donors. Matching capitalizes on this existing strength of charities.

It maintains a level of responsibility and risk for charities

By matching donations, it ensures charities will exert their best efforts to stay viable. It also encourages charities to examine their ways of operating, find creative ways to reduce costs and remain sustainable in light of changing donor behaviour.

It recovers part of the cost from a lower tax expenditure on charitable donations

Grants are given when a charity has lost donation revenue. That means claims for donation tax credits would be lower than in the previous year.

In the face of COVID-19, social solidary is key to maintaining trust, a sense of common sacrifice, and ultimately stronger institutions and relationships. Charitable giving is known to have significant psychological effects on individuals and communities. This is an opportunity to use matching funds as a key component to this message of solidarity and unity in crisis.

As you engage with your federal political representative, we encourage you to use CCCC’s proposal to call for charity stabilization funds with a matching funds distribution model to ensure both the short and long term health of the Canadian charitable sector. CCCC’s proposal to Minister Hussen is available below for your reference.

CCCC will continue to work with Imagine Canada and Cardus to secure the best funding program possible for our members. The advocacy of CCCC and our members is vital as we mobilize and respond to the extraordinary needs facing charities, and the communities they serve, during the COVID-19 pandemic.

Read CCCC’s funding proposal to the federal government here.

Charity leaders are invited to share how they are responding to the COVID-19 pandemic within their organization in our online community forum, The Green: COVID-19 Response Room.

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Noteworthy is provided for general information purposes and does not constitute legal or professional advice. Every organization’s circumstances are unique. Before acting on the basis of information contained in this blog, readers should consult with a qualified lawyer for advice specific to their situation.