A sector coalition is advocating for flexible funding, while the government emphasizes accountability. Both are trying to reduce administrative burden. Can these needs co-exist?
It can take three months for a director to recruit and onboard a staff with the confidence to deliver a funded program. If that director has only one year of funding for staff, with little notice whether they will receive additional money in their next budget, their contract team will have no choice but to find new jobs. If that director has to recruit a new team each year they receive one year of funding, they lose a quarter.
“How much time do I have to actually do the work that needs to be done?” says Brittan Hudson, managing director at The Enchanté Network, an organization that connects and supports 2SLGBTQIA+ organizations across Canada.
Multi-year funding is just one element of funding reform Hudson is championing with Fair Funding for Nonprofits, a national coalition advocating for more equitable and effective federal funding systems for non-profits. Imagine Canada is the backbone of the voluntary, member-based coalition, supporting administration and strategy coordination among its members. On May 4, Imagine Canada hosted a reception to connect non-profit leaders, sector partners, and parliamentarians to address solutions for federal funding practices. On May 5, it hosted a Hill Day, where Fair Funding delegates addressed funding reform in meetings with members of Parliament, senators, parliamentary secretaries, and federal department staff. The delegates discussed how reducing administrative burden and increasing reliable and responsive funding could help non-profits and the government address pressing Canadian needs.
What the coalition wants
As of the end of May, Fair Funding for Nonprofits has 1,072 newsletter subscribers receiving updates on the coalition’s work. Sixty organizations signed its pre-budget submission for the House of Commons Standing Committee on Finance and the Department of Finance’s pre-budget consultation. In it, Fair Funding proposes that the government change application reporting requirements so non-profit staff can focus on their communities, rather than spending hours on excessive administrative requirements.
On Hill Day, Fair Funding delegates met with staff from the Treasury Board of Canada Secretariat (TBS), Employment and Social Development Canada, Women and Gender Equality, Canadian Heritage, and Health Canada to discuss their submission. The main objectives were to increase Fair Funding’s visibility and make progress on their funding-reform recommendations, according to Jodene Baker, Imagine Canada’s vice president of research, advocacy, and external relations. One MP committed to sending a letter to TBS in support of Fair Funding’s work. Senior officials agreed to connect delegates with other departments so their research can reach more federal funders.
The Philanthropist Journal was not permitted to join the meetings to hear the government’s perspective on funding-reform proposals. TBS oversees the government’s public spending and access to information, so following Hill Day, we requested a phone interview with a TBS representative to learn how Fair Funding’s advocacy would be incorporated into federal funding. We also emailed 10 questions to receive written responses as an alternative option. TBS’s media relations senior advisor, Barbara Couperus, wrote that they would not be able to answer within the requested two-day turnaround; 11 business days later, we received responses to eight of our questions. Baker says Fair Funding did not have the same challenge in communicating with TBS.
One of Fair Funding’s recommendations is for the government to adopt a “one partner, one profile” approach so that non-profits funded by more than one federal funder do not have to re-submit the same information across multiple funding opportunities.
Why can’t we have some kind of comprehensive application process that would save the red tape?
Anuradha Dugal, Women’s Shelters Canada
According to Anuradha Dugal, the executive director of Women’s Shelters Canada, when organizations apply to multiple ministries, including funding streams within the same ministries, they must enter the same basic information for each application. “Why can’t we have some kind of comprehensive application process that would save the red tape? For us, and, frankly, for most of the departments.”
In July 2025, the Canadian government launched the “Red Tape Review” to prevent regulatory burdens from maintaining outdated rules, duplicating provincial rules, or causing inefficient or unpredictable administration or service delivery. Couperus did not provide a response about TBS adopting a “one partner, one profile” approach.
The coalition is also calling on the government to grant non-profits the flexibility to move funds between budget lines, grant longer funding terms, and provide funding approvals with shorter waiting times.
Dugal says that once an organization’s application budget is approved, changing budget line expenses by more than 10% to 15% warrants an application for approval. She explains that program needs can change, but moving grant money between expenses like communications, travel, or food requires permission. “When we say more flexible funding, that’s the kind of red tape that we’re trying to eliminate.”
Dugal also says the government does not always share why line-item changes are approved or rejected, and ministries have different response times. “It’s inconsistent across ministries and departments.”
A recent Women’s Shelters Canada national survey revealed that only 25% of shelters have fundraisers on staff, Dugal says. “So who’s doing those applications? It’s either taking away time from front-line staff or it’s taking away time from the executive director.”
When asked why there isn’t more flexibility to move funds between budget lines and if non-profits were informed why their applications are rejected, Couperus wrote, “To promote transparency, departments must clearly publish the eligibility and assessment criteria for each program” as required by TBS’s policy on transfer payments. However, “departments are not legally required to give detailed explanations to unsuccessful applicants.”
What are the barriers to federal funding reform?
Accountability without flexibility
Couperus writes that the demand for federal funding is high. Each grant and contribution program TBS funds is a contract between the government and the recipient, operating under “approved terms and conditions that outline recipient and project eligibility, expected results and the type and amount of funding available to recipients.”
Dugal says she thinks the main barrier to federal funding reform is accountability.
With courses in TBS’s Grants and Contribution Learning Series like “Managing and Monitoring a Funding Agreement” and “Transfer Payment Basics,” public servants are trained to monitor strategies for funding agreements and reassess funding project risks. The policy on transfer payments “requires that they balance risk with available flexibilities to support project outcomes,” Couperus writes. As such, approved grant and contribution funding cannot be moved to another program or used for different purposes.
Diane Connors, the managing director of Impact Organizations of Nova Scotia, says rigid application processes can inhibit people from doing their work, as equity-deserving communities may not have the capacity or resources to fulfill the requirement. “They can be quite arduous, so that can make it really difficult for people to be implementing the kinds of change that they’re wanting to and needing to do in their communities.”
Dugal says simplifying hundreds or thousands of applications would save government staff from hours of reading. “We’re cutting out red tape not just for the sector, but for the government.” She says with more multi-year funding, government staff could read new applications once every two or five years instead. She says a simple reporting structure with fewer checks and balances would save time.
Couperus writes that each grant and contribution program agreement is approved through the “Estimates” process, a government expenditure plan for departmental spending and transfer payments. “Even if a program is meant to run for several years, departments only receive spending authority one year at a time,” she writes. Transfers approved for multiple years without Parliament’s annual approval are authorized by separate legislation, she explains, such as statutory federal transfers to provinces and territories.
The non-profit sector as a whole receives approximately $13.3 billion from the federal government (plus roughly $258 billion from provincial governments and $14 billion from municipal/regional governments); in total, governments represent approximately 65% of the sector’s revenue.
Time-consuming reporting focused on outputs over impact
“It’s important that we can actually maximize the grants and contribution programs that we have in place. So not having staff spend inordinate amounts of time on reporting on issues that are really minutiae, but rather working with the government to measure the right things. The broad impacts of the programs that they were entrusted to deliver is a more appropriate and reasonable, yet accountable and transparent, use of the funds,” says Bruce MacDonald, president and CEO of Imagine Canada. “So the invitation is to broaden our thinking about accountability.”
Narrow ideas of successful grants
Fair Funding delegates also discussed expanding how they view program success, focusing on outcomes rather than outputs. “I would say trying to move away from quantifying what the results of the programs are and maybe more towards qualifying the impact, as opposed to the numbers necessarily, which is hard for the government,” Connors says. “Because they want the numbers.” She says that during a meeting, her delegate team was told it’s easier to fund programs with clear financial impacts on a certain number of people.
The invitation is to broaden our thinking about accountability.
Bruce MacDonald, Imagine Canada
Focusing on immediate results to secure funding rather than changing the systems is known as the charitable industrial complex.
“Are we reinforcing wealth gaps and the power dynamics of government having the money and sort of portioning it out to organizations based on what [government employees] decide merit is?” Connors says. “Do we try to change what the merit is [or] do we try to change the system?”
At the same time, the sector has been reacting to the spring economic statement, which focused on “building a strong Canadian economy, diversifying our trade partners abroad, delivering responsible fiscal management, and supporting Canadians who are under pressure from everyday expenses.”
According to the Ending Sexual Violence Association of Canada, the spring economic statement left sexual- and gender-based-violence gaps. The National Association of Women and the Law welcomed the Team Canada Strong $6-billion investment in trades but emphasized the need for including a gender-based analysis so training, apprenticeships, and support can ensure women’s full participation. Cooperation Canada, a coalition of domestic and international civil society partners working in international development, released a statement welcoming Global Affairs Canada’s five-year, $3-billion funding while noting Budget 2025’s $2.7 billion in cuts to international assistance.
“From an advocacy perspective, it’s always been about the quantity and quality of official development [assistance],” says Shannon Kindornay, Cooperation Canada’s deputy CEO. “Regardless of what the funding levels are going to be, we’re always going to be asking Canada to do its fair part.”
Without consistent funding for federal departments, ministries, and agencies, the organizations they fund will also feel cuts. “If [public sector] funding isn’t on an ongoing basis, then their hands are tied,” Kindornay says. “That really limits how far the multi-year funding applications can go.”
Fair funding in practice
Kindornay says it’s good that delegates and ministerial staff in departments controlling grants and contributions heard different practices during Hill Day. For example, Global Affairs Canada allows its grant recipients to reallocate up to 40% of funds between existing budget line items. This is not a universal practice across federal government departments. Kindornay says the government should combine these departments’ “good practices that do exist, that we know are possible, and could then be adapted.”
The government can also learn from foundations. The Enchanté Network creates opportunities for the organizations it funds to engage with and learn from people working in the same granting portfolios. “The funder and the community group should be partners in that we’re all trying to reach the same goal,” Hudson says. “It forces us to truly have a unique understanding of what these organizations are facing, so that we can adapt the tools that we have. Those organizations can spend more of their time actually in the community, creating social change, and less of their time doing administrative work that prevents them from actually accomplishing those goals.”
Organizations can spend more of their time in the community, creating social change, and less of their time doing administrative work that prevents them from actually accomplishing those goals.
Brittan Hudson, The Enchanté Network
Hudson says that some of Enchanté’s grantees experience challenges with reporting impact and explaining why their programs might need to pivot. One organization working on a long-term strategy to mitigate hate had to deal with a hate crime in the middle of its funding cycle. Hudson says the email Enchanté received seeking permission to change budget lines to manage the hate crime suggested the organization was scared to request this change. The way Hudson sees it, funders have the power to help organizations respond to issues facing their communities – and a responsibility to avoid being a “block” to meeting mandates.
Short-term solutions while navigating long-term reform
Fair Funding’s work has been three years in the making: forming strategy and steering committees, building websites, publicly launching with Senator Paulette Senior, hosting the reception and Hill Day, and sending their pre-budget submission. Now that they have had the opportunity to address decision-makers in person, and received some positive responses, the delegates are planning their next steps. Detailed proposals could be their next option. “We could proactively help interested or willing programs get started if we can give them a bit more specificity of best practices from our perspective,” MacDonald says.
During the debrief at the end of the Hill Day, delegates discussed their hopes for the government to digitize platform applications and create a contact management system with security and data privacy considerations.
Connors says most of the short-term changes need large operational components, so organizations also need to push for changes in attitudes toward the relationship between funders and recipients: how much information is required, what counts as burden, what is accountability, what are good outcomes, and what is good program design.
We’re hearing from departments that these are good ideas, that they’re ready to be actioned, so it just needs the government to put it in the budget.
Jodene Baker, Imagine Canada
Kindornay says the coalition’s conversations with decision-makers is moving their advocacy in a positive direction. “The relational work, figuring out what we don’t know, what’s good, what’s better – packing that out and actually providing the government with an agenda that doesn’t necessarily require a massive policy shift,” she says. “They’re looking for efficiencies. They’re looking for red-tape reduction. If a couple of departments have actually done some good practices, let’s pull those out and push.”
“The biggest way that the objective was achieved was around commitment to follow-up,” Baker says. Following the letters expressing support for Fair Funding, introductions to senior officials, and sharing their advocacy research, the next thing the coalition will watch for is the budget. Baker says it could include a centralized funding hub, a technological platform, or action departments to collaborate to increase efficiency. Fair Funding wants the budget to include these funding changes as a priority and directive for departments to follow in the coming year.
“We’re hearing from departments that these are good ideas, that they’re ready to be actioned, so it just needs the government to put it in the budget.”
