Inventory of Effective Practices in Financing and Resourcing of Voluntary Sector Organizations in Canada

Project Background and Rationale

As part of the Voluntary Sector Initiative (VSI), the federal government and Canadian voluntary sector commissioned the development of regional inventories to illustrate successful financing and resourcing practices of Canadian voluntary organizations and to contribute to the efforts of the sector to improve resourcing. The development of the inventory was funded by the VSI's Capacity Joint Table (CJT), through Human Resources Development Canada.

A vibrant and healthy voluntary sector is essential to the continued development, support, and enrichment of strong communities. For more than a decade now, the voluntary sector has experienced growing financial and administrative pressures. There are many reasons for this and the funding crunch is experienced differently by different types of organizations. Decreasing resources, more restrictive funding arrangements, more stringent accountability and reporting requirements, and increasing needs in communities all affect the sustainable capacity of organizations to be responsive, flexible and innovative in their work. Organizations are being asked to do more with less and to expand their role in our communities. There is increasing pressure for voluntary sector organizations to diversify their funding sources, to account in more formal and diverse ways for their funding, to become more entrepreneurial, and to establish partnerships to qualify for certain funding.

Not all funding sources are suited to every organization. Organizations must continually assess the various funding sources and mechanisms available, and try to incorporate those most appropriate to achieving their mission. For example, some organizations' issues or campaigns are particularly well suited to partnerships, while others lend themselves to government grant funding. Resourcing requirements may also change over the life of the organization: the funding mix for an organization in the start-up phase may look quite different from resources used to support an organization which has served its community for fifty years. In addition, the shift by many funders away from longer-term, flexible funding to shorter-term, restrictive funding has forced organizations to focus more time and resources on fundraising to support their work.

It is clear that an "effective practice" is not easy to define or capture. Often a successful program is the result of a combination of diverse activities. It is also important to note that the nature of the funding environment in a particular community or region will affect resourcing practices. These inventories capture examples of a range of innovative financing and resourcing practices used by different types and sizes of voluntary organizations across the country, including: leveraging funds; community support and collaboration between funders and voluntary organizations; diversity of funding; reducing costs; building relationships; being proactive and entrepreneurial; and adapting to change. In addition, some cases focus on the organization as a whole, while others highlight a specific program or service of the organization.