Book Review: Emerging Issues in Western Canada’s Non-profit Funding Regimes

Funding Policies and the Nonprofit Sector in Western Canada: Evolving Relationships in a Changing Environment, edited by Peter R. Elson, Toronto, University of Toronto Press, 2016, ISBN 9781442637009

Social, political, and economic environments in Western Canada have been changing quickly; it is essential that non-profit sector leaders across Canada pay close attention. A new book on the subject, Funding Policies and the Nonprofit Sector in Western Canada: Evolving Relationships in a Changing Environment, edited by Peter R. Elson (2016), offers important analysis on how non-profit funding regimes in Western Canada have adapted to an emerging landscape of rising unemployment, economic diversification, and increased demand for social services. Elson’s book is an outstanding resource for non-profit organizations and leaders across Canada, combining theory, context, and historical and current case studies from British Columbia, Alberta, Saskatchewan, and Manitoba.

This review focuses on two key themes that emerge in the book: (1) the role of fiscal conservatism and neoliberalism in shaping government-non-profit funding relationships and (2) the non-profit sector as an essential partner in driving economic growth, diversification, and innovation. The book addresses several other themes, namely, the relationship between funding and accountability; the role of provincial voluntary sector initiatives in shaping funding regimes; the broader restructuring of social service delivery; and the historical shifts in Western Canada’s political ideology. I use the themes of fiscal conservatism and economic diversification to focus my discussion and identify several opportunities for further research, dialogue, and collaboration.

Legacy of fiscal conservatism

Each chapter in Elson’s book presents different impacts of provincial economic and social policy on the sustainability of the non-profit sector. Several authors explore fiscal conservatism and its impact on the non-profit sector, particularly a chapter by Sonpal-Valias, Sigurdson, and Elson about Ralph Klein’s legacy in Alberta. The authors note that Albertans can attribute, in part, rising income inequality, economic insecurity, and poor health and social outcomes (including family violence, crime, social exclusion, homelessness, and a lack of community belonging) to Klein’s neoliberal economic agenda in the 1990s. They posit that Klein’s focus on downsizing government, decentralizing decision-making, and implementing stringent financial controls resulted in widespread budgetary cuts for health and social services across the province. As a result, these policies radically changed Alberta’s social policy landscape – reducing benefit amounts, tightening eligibility criteria, and pressuring service delivery organizations (many non-profit providers) to shrink caseloads and find operational efficiencies.

This chapter powerfully illustrates the resilience and adaptability of Alberta’s non-profit sector following these reforms. A good number of organizations experienced increased pressure to generate earned revenue by adopting “business-like” managerial practices due to decreases in government funding. Many lacked the capacity to deliver services, employ staff, and secure the financial resources needed to meet the rising demand for their programs and services because of social service downloading (in which the government reduced its public sector workforce and contracted out the delivery of essential services). The authors note that Klein’s reforms had widespread impact: the increased demand for social services, reduced non-profit sector workforce, and constraints on organizations’ political advocacy activities continue to shape the culture and capacity of Alberta’s non-profit sector.

In another chapter, Reimer, Bernas, and Adeler provide an interesting contrast to the Klein-era reforms by reflecting on the Manitoba NDP’s introduction of community economic development (CED) as an alternative to neoliberal economic reforms. The authors define CED as “local, community-led action that creates economic opportunities while addressing local environmental and social issues” (p.229). While CED has a long history in Manitoba, the movement gained significant traction during the Klein era in Alberta (early 1990s–mid 2000s). In Manitoba, the authors argue that CED proved to be a valuable framework for genuine partnership – and shared responsibility – between government and the non-profit sector, promoting community self-reliance, earned revenue opportunities, and local resource ownership without drastic funding cuts like those carried out in Alberta. The authors identify several examples and note the supportive legislative environment, including the development of a provincial CED policy regime, the creation of community development corporations (CDCs) in rural and urban communities, and support for Indigenous co-operatives as drivers of local economic development. Overall, Elson’s book provides a resoundingly positive assessment of CED and a pointedly critical assessment of neoliberal economic policy and fiscal conservatism. While the chapters and case studies are thoughtfully put together, it would have been interesting to further explore the subtle differences between the local, community-driven nature of CED initiatives and the use of social service provision downloading as a strategy to increase non-profit sector accountability in a neoliberal funding regime. Comparing these two chapters provides a compelling case study of how provincial economic policy can encourage, or constrain, a province’s non-profit sector capacity.

Economic transition and diversification

Funding Policies and the Nonprofit Sector in Western Canada also briefly explores the role of economic diversification in Western Canada: an issue that has become increasingly topical with the plummeting price of oil in 2015-2016 and the resulting rise in unemployment, interprovincial migration, and household debt – impacting families, employers, and organizations alike. Emmett (2015) notes that national economic activity and GDP growth affect almost every activity in the non-profit sector (from fund development to service delivery to political advocacy). Elson’s book alludes to the potential economic impacts of Alberta’s oil-dependent economy, and it is particularly interesting to reflect on the economic shifts that have occurred since the book was published earlier this year. As of July 2016, Alberta’s unemployment rate is at its highest in nearly 22 years at 8.6% (Government of Alberta, 2016) and Alberta’s deficit topped $6.4 billion in the 2015-2016 fiscal year.

Worth noting, however, is that Western Canadian provinces have recently fared differently in terms of their economic standing. While weak commodity prices continue to constrain natural resource industries in Alberta and Saskatchewan, British Columbia and Manitoba have been experiencing sustained economic and wage growth due to growing manufacturing and construction industries (BMO Nesbitt Burns, 2016). While data is not yet available, non-profit organizations across Western Canada are likely seeing significant variations in the availability of government resources, as well as demand for their programs and services, as a result of these economic disparities.

Resource-dependent economies present unique challenges for non-profit organizations. It is particularly difficult to develop stable government funding regimes in periods of extreme economic volatility. Across Western Canada, economic transition and diversification are a key focus for provincial governments – and the leaders of non-profit organizations offer a valuable perspective as employers, service providers, and active citizens. In Alberta, non-profit organizations will likely have an important role to play as the provincial NDP government focuses on economic development and trade – whether in training workers, promoting the expansion of Alberta’s renewable energy industry, opening non-profit childcare facilities, or launching new social enterprises. Since the Alberta NDP has positioned the non-profit sector as a key partner in service delivery, Elson’s book is a valuable and timely resource. Alberta is one example of how provincial approaches to non-profit sector funding and governance are changing quickly.

While there is limited data available on the impact of Alberta’s recent economic downturn on non-profits, it is important to understand the short- and long-term consequences on their capacity and sustainability. The Calgary Chamber of Voluntary Organizations (2016) notes that, in 2016, 29% of responding non-profit organizations across Alberta experienced a decline in total revenue (43% experienced a decline in corporate revenue), with 66% of organizations taking steps to respond to the economic downturn (e.g. reducing programs and services, decreasing salaries, reducing collaboration activities, and accessing shared services). While an environment of increasingly limited resources has unfortunately become status quo for many organizations in Alberta, the recent fires in Fort McMurray will further affect non-profit organizations and their ability to meet the increased need for programs and services.

Opportunities for further discussion

Elson’s book is rich in original research, analysis and political commentary, providing an excellent springboard for regional dialogue, sector-level organizing, and coalition-building. There are further opportunities to deepen the discussion among those interested in the non-profit sector in Western Canada. It would be interesting to broaden the focus from human services funding regimes; examine the unique challenges faced by Indigenous non-profit organizations; and explore the role of social finance tools in Western Canada. The relationship between non-profit-government funding regimes and the emerging field of impact measurement is also worth exploring.

While Elson focuses primarily on the changing non-profit-government funding relationships relevant to the human services sector, case studies would be helpful to understand how funding relationships have also changed for non-profit organizations that focus on arts, the environment, education, or health care. Indigenous non-profit organizations comprise another important area for further discussion and research, particularly because on- and off-reserve funding regimes remain so complex. Hardy and Peachey (2015) note that, of the Indigenous non-profit organizations they profiled, most reported significant difficulty securing long-term government funding with dedicated resources to build local organizational capacity (from succession planning to grant writing). These funding challenges deserve further research and attention.

Elson’s book provides important context to understand the social finance landscape in Western Canada and potential future scenarios for government-non-profit funding relationships. Decision-makers in Western Canada have demonstrated considerable leadership in social finance, with Alberta’s initial proposal to launch a (now defunct) $1 billion Social Innovation Endowment in 2013 and the launch of Saskatchewan’s first social impact bond pilot in 2014. While there will likely be limited traction for social impact bonds due to Alberta’s new political climate and increased nationwide skepticism about their viability, it is possible that the economic downturn may inspire provincial governments to explore social finance tools as part of a broader austerity agenda in the future. As Sonpal-Valias, Sigurdson and Elson note in their chapter, neoliberal economic policy can present a risk to the non-profit sector, jeopardizing the efficacy and sustainability of essential programs and services that help our communities thrive.

Elson’s book also provides an ideal opportunity to advance the discussion on the changing landscape of impact measurement in Western Canada, including emerging tools for impact evaluation and the government’s role in building evaluation capacity and identifying common outcomes and frameworks. This is a growing and increasingly complex field, lacking coordination at both the sector and province level. The Canadian Community Economic Development Network (CCEDNet) in Manitoba and Demonstrating Value in British Columbia are two Western Canadian leaders in impact measurement. Initially led by Vancity Community Foundation as a grassroots impact measurement initiative, Demonstrating Value provides resources for non-profit organizations and social enterprises to integrate impact measurement and strategic management. CCEDNet is a nationwide network of community economic development organizations, social enterprises, and social purpose businesses that disseminates resources, leads political advocacy initiatives, and conducts valuable research. These are just two examples of leadership in impact measurement emerging from Western Canada. It would be fruitful to further explore these tools and best practices and reflect on how provincial funding regimes are following suit.

References

BMO Nesbitt Burns (2016). Provincial Economic Outlook. Retrieved from http://www.bmonesbittburns.com/economics/forecast/prov/provincialoutlook.pdf.

CCVO (2016). “2016 Alberta Nonprofit Survey”. Retrieved from http://www.calgarycvo.org/2016-ab-nonprofit-survey/.

Government of Alberta (2016). “Alberta Economic Dashboard”. Retrieved from http://economicdashboard.alberta.ca/Unemployment.

Elson, P. (ed.) (2016). Funding Policies and the Nonprofit Sector in Western Canada: Evolving Relationships in a Changing Environment. Toronto: University of Toronto Publishing.

Emmett, B. (2015). “Double, double, oil and trouble: impact of falling oil prices on Canada and its charities”. Imagine Canada. Retrieved from http://www.imaginecanada.ca/blog/double-double-oil-and-trouble-impact-falling-oil-prices-canada-and-its-charities.

Hardy, K. & Peachey, K. (2015). Learning From Indigenous Non-Governmental Organizations: A Case Study of Three Indigenous Non-Governmental Organizations in Canada with Transformational Impact on their Communities. Tides Canada. Retrieved from http://tidescanada.org/wp-content/uploads/2015/11/Tides_Canada_INGO_Report_2015.pdf.

Reimer, B., Bernas, K. & Adeler, M. (2016). “Mainstreaming Community Economic Development in Manitoba”. In Elson, P. ed. Funding Policies and the Nonprofit Sector in Western Canada: Evolving Relationships in a Changing Environment. Toronto: University of Toronto Publishing.

Sonpal-Valias, N., Sigurdson, L. & Elson, P. (2016). “Alberta’s Social Policy: The Legacy of the Klein Reforms”. In Elson, P. (ed).  Funding Policies and the Nonprofit Sector in Western Canada: Evolving Relationships in a Changing Environment. Toronto: University of Toronto Publishing.

Joanne Cave is the Policy Lead for Mowat NFP at the Public Policy Forum. She holds a Masters in Social Policy from the University of Oxford, where she studied austerity, social finance and the non-profit sector as a Rhodes Scholar.