Economic uncertainty puts pressure on charities – support is vital
AFP Canada continues to push for a permanent charitable sector secretariat
In Canada’s charitable sector, the negative impacts of turbulent, external forces have a disturbing way of repeating themselves.
In the current context, global economic and political upheaval has stirred uncertainties that risk causing donors to curtail their charitable giving. The result: Canadian charities that serve as lifelines for vulnerable individuals and communities are facing the prospect of funding shortfalls.
It’s a similar situation to the challenges that confronted the charitable sector during the COVID-19 pandemic when demand for services surged while funding dwindled – and not much has changed since then.
Funding is still declining while demand for services has continued to rise.
Top left: Nancy Perry Dossous, treasurer of AFP Canada, says although many nonprofits are facing funding constraints, “this is the moment for philanthropy to rise, not retreat.”
Top right: Niambi Martin-John, chair-elect of the AFP Foundation for Philanthropy – Canada, says reduced funding for the nonprofit sector could exacerbate health inequities and diminish crucial psychosocial support for marginalized groups. SUPPLIED
A 2023 poll by Ipsos for CanadaHelps, Canada’s largest platform for donating and fundraising online, showed that, compared to 2022, Canadians are more likely to say they do not give financially to charities and less likely to say they will give the same amount this year as 2022.
The poll also showed 24 per cent of Canadians (up from 22 per cent in 2022) said they expected to need support from charitable services within the following six months to meet essential needs such as food, shelter or health services – 42 per cent of whom were under the age of 35.
Nancy Perry Dossous, treasurer of AFP Canada, says the charitable sector is “in a pressure cooker.
“Inflation, geopolitical turbulence and widening social fractures are colliding. Meanwhile, the nonprofit sector is expected to carry on as if it’s business as usual,” she says.
Ms. Perry Dossous notes that the nonprofit sector contributes over $225.5-billion to Canada’s economy and employs more than 2 million people, positioning it as a “societal stabilizer.
“The charitable sector isn’t a footnote to the economy; it’s foundational to its function and recovery,” she adds.
Niambi Martin-John, chair-elect of the AFP Foundation for Philanthropy – Canada, says many organizations are facing declining donations and an over-reliance on long-term supporters.
“Since COVID, even loyal donors are beginning to make smaller gifts, which ultimately affects the bottom line,” she says.
She adds that there is a trend of donors delaying contributions or redirecting support to causes they perceive as more immediately urgent. For example, some foundations are strategically reassessing their portfolios, often shifting towards thematic areas with a greater local focus, further complicating the landscape for Canadian charities seeking multi-year funding.
The consequences of these funding constraints are far-reaching.
“Critical support for vulnerable communities will be scaled back, with some community-led organizations grappling with whether they are able to sustain operations,” says Ms. Martin-John.
She emphasizes that charities often serve as vital hubs for community connection and, particularly in rural areas, act as extensions of formal health-care and social systems. Reduced funding could therefore exacerbate health inequities and diminish crucial psychosocial support for marginalized groups, including women and girls, aging populations, 2SLGBTQIA+ individuals and racialized communities.
Both Ms. Martin-John and Ms. Perry Dossous anticipate a surge in demand for charitable services mirroring the experience of the COVID-19 pandemic.
Ms. Martin-John points to recent announcements of rising grocery prices as an indicator that more people will be turning to food banks. Ms. Perry Dossous agrees, noting that the current increase in need is compounded by its complexity, encompassing issues like food insecurity, unaffordable housing, youth mental health and rising demand for emergency services.
The impact of international policy shifts, particularly funding cuts in the U.S. for programs supporting initiatives such as Pride, DEI, and HIV prevention and treatment, especially in Africa, adds another layer of concern.
Ms. Martin-John stresses the importance of global solidarity, noting that many of the same human rights issues being challenged abroad also affect vulnerable populations in Canada.
In the face of these challenges, both Ms. Martin-John and Ms. Perry Dossous urge donors to maintain and even increase support for the charitable sector.
Ms. Perry Dossous says there is a need for “critical thinking in philanthropy” and urges donors to consider where their capital is going.
Ms. Martin-John says the charitable sector simply cannot afford to lose momentum with its donors and supporters, noting that the importance of global solidarity that emerged during the pandemic is a lesson that should not be forgotten now.
Ms. Perry Dossous agrees.
“This is the moment for philanthropy to rise, not retreat,” she says.
Both also highlight AFP Canada’s key advocacy role to ensure the charitable sector is included in government assistance programs to offset the impact of U.S. tariffs.
AFP Canada is continuing to push for a permanent charitable sector secretariat to serve as a crucial advocate and bridge between charities and the federal government.
“With the increasing complexity of trade relations with the U.S., concerns about inflation and affordability, (a secretariat) would empower charities to continue their vital work while also addressing the broader economic and social challenges and ripple effects posed by these new tariffs,” AFP Canada stated in a pre-Budget 2025 submission.
The submission noted that charities are under greater pressure than ever before.
“Our experience from the pandemic shows that a stronger partnership between the sector and government could have reduced these impacts and accelerated recovery, ensuring the sector’s long-term success. Establishing a dedicated government secretariat could help achieve this goal,” the submission stated.
Canadian charities are at a critical juncture. Sustained and increased support from individual donors and a commitment to flexible, community-driven funding are essential to ensure these vital organizations can continue their invaluable work during these uncertain times.
ABOUT THE ASSOCIATION OF FUNDRAISING PROFESSIONALS
The Association of Fundraising Professionals (AFP) represents 26,000 fundraisers around the globe, partnering with donors and volunteers to change the world through ethical and effective fundraising. AFP helps its members raise over $100-billion annually for a wide variety of causes by providing advocacy, research, education, mentoring and the most rigorous code of ethics in the profession.
The over 3,000 AFP members in Canada are leaders in the charitable sector – a sector that contributes more than 8 per cent to Canada’s GDP annually. They raise funds for organizations large and small, in rural and remote communities as well as towns and major cities across the country. They support arts, culture, shelters, emergency services, health care, education, reconciliation with Indigenous Peoples, and social justice. Their fundraising efforts change lives by helping fight poverty, hunger, climate change and inequalities in Canada and around the world.
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