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

Article by Halifax United Way

1. Atlantic Canada's Funding and Resourcing Environment

What are your perceptions about the current funding and resource environment in Atlantic Canada?

• Most funders, in particular government, tie their funding to specific line items in an agency's budget. This limits the ability of agencies to allocate resources within their organization in the most efficient manner, reduces flexibility and places limits on the board's governance.
• Economic growth in HRM has increased the corporate investment in the voluntary sector, however this is not experienced outside the Halifax urban area.
• Increasing numbers of voluntary organizations have increased competition in fundraising.

In your experience, what are the organizational capacity issues that impact the funding and resource development practices of voluntary sector organizations in Atlantic Canada?

• Many organizations cannot describe the outcomes of their work.

2. Contemporary Funding Strategies

What challenges are you aware of in the funding and resource-raising environment in Canada?

• Described above

Briefly describe a funding strategy that you have developed that you believe responds to needs in the sector.

• Implemented a funds distribution methodology based on six principles:
• Asset Based - Organizations must identify the assets, strengths, skills and opportunities that exist within the community (geographic or population) that they serve and demonstrate how they are building on these.
• Capacity Building - Funded program must show that they expand upon the assets, qualities or characteristics of an individual, community, or not-for-profit organization so that they can increase their ability to respond to ongoing challenges and new opportunities.
• Community Impact - Organizations must demonstrate that they make a positive and measurable difference in the community.
• Flexibility - United Way has developed, and will continue to expand the ways in which it supports diverse issues, neighbourhoods, communities and organizations.
• Collaboration - United Way understands that successful collaboration requires resources and will support these efforts.
• Stewardship - United Way is accountable to its donors to ensure prudent, effective and efficient distribution and use of United Way resources in accordance with these principles. The role and responsibility of United Way and funded groups will be governed by agreements that reflect this stewardship role and these principles.
• Implemented an outcomes based funding approach
• United Way establishes funding relationships based on complementary outcomes. United Way has identified seven broad outcomes that it wants to achieve through its work. Organizations may apply for funding if their work achieves outcomes that complement or would help to achieve these broad outcomes.
• United Way used to have members agencies. Now any organization with complementary outcomes may apply for funding.
• Funding decisions are made by volunteers
• orientation and training is provided
• community knowledge and diversity are key

What was the rationale for the development of this funding strategy?

• A series of workshops, roundtables and focus groups were conducted during 1996 - 1998.
• Donors asked us to describe what difference our funding made.
• Residents and program participants expressed frustration that they were labeled as people "in need" and that their assets were not being valued.
• Agencies expressed concern over funding that was tied to specific line items
• Non-funded agencies expressed concern over the "closed door" that member agency status implied.
• The role of volunteers in funding decisions is+ inherent to United Ways across North America.

What have you learned about the strengths and weaknesses of this strategy?

• The criteria and process is unusual and many organizations find it difficult to understand. As a result we have had to provide workshops and allocate staff time to assist agencies in developing their funding applications.
• The use of volunteers in making funding decisions results in a much longer and more in-depth process.
• Agency board members were initially more likely to agree with this strategy than was agency staff. This difference became less apparent with time.

What have you learned about the strengths and weaknesses of those organizations you funded through this approach?

• Organizations are very good at describing their work - both what they do and the quantity of their work. They often find it difficult to measure outcomes or what difference this work makes.