CCCC submitted a brief as part of the Federal 2021 Pre-Budget Consultations, advocating for a donation matching fund. This is consistent with our past advocacy efforts to secure equitable, efficient, and engaging government assistance for charities in times of COVID-19. Last April, CCCC advocated for this type of matching fund in a letter to the Minister of Families, Children and Social Development.
Why A Matching Fund?
For our Federal 2021 Pre-Budget submission, CCCC endorsed the Canada Cares proposal for a 1:1 federal donation matching fund. In addition to Canada Cares and the charities that have joined its campaign as coalition members, other organizations like Imagine Canada have also recommended a matching fund, among other things, in their pre-budget submissions.
Why a matching program? There are a lot of benefits to distributing federal relief funds for charities this way.
It promotes charitable giving
Matching funds spur greater giving by private donors. Studies show matched money increases revenue per solicitation by 19 percent, and that there are long-term positive impacts. Donors are likely to continue giving even when the matching funds program ends.
It is highly efficient
Administrative systems to process matching funds already exist within the federal bureaucracy and can be expanded rather than building from scratch. There is also less administrative burden on charities than there would be for other options such as grant application-based models.
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. This is particularly important given that small and medium-sized charities and those in rural areas have been hardest hit.
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.
How Does It Work?
Canada Cares sets out five key components of a federal 1:1 matching fund:
- The federal government contributes one dollar for each dollar given by donors, and for which charities can show receipts
- Contributions are capped based on a charity’s revenue in the previous year to ensure equitable distribution
- Charities submit receipts on a timeframe set by the government (monthly, quarterly, semi-annually)
- Contributions are time-limited and can be based either on a fiscal year, or an alternative time period linked to crisis spending, as set by the government
- The government may also consider a 0.5:1 grant for organizations that are able to grow revenue over past years.
Add Your Voice!
We know that charitable giving has significant positive psychological and practical effects on individuals and communities. As we have seen, charities are uniquely positioned to respond to a wide swath of urgent needs – physical, material, emotional and spiritual. But a healthy charitable sector is important to more than meeting needs that governments simply can’t address. A healthy charitable sector is key to recovering the health of our nation. This is an opportunity to use matching funds to invest in the long-term health of charities and to be a key component that encourages solidarity and unity in crisis.
And for more information about Canada Cares, and how you can support the matching fund proposal, check out the campaign site.
No date has been set for when the budget will be tabled (the last budget presented to Parliament was March 19, 2019). Once it is released, we’ll be sure to update you as to any charity-related initiatives!
In the meantime, members can join us in The Green where we can chat about the matching fund, and you can tell us what else you might like to see as part of the 2021 federal budget.
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.