There are 161,000 nonprofit and voluntary sector organizations in Canada…and counting. To ask the question, “Is the proliferation of nonprofits an opportunity or a threat?” is a little like asking if the glass is half full or half empty. Depending on who you talk to, or what aspect of competition you are discussing, the answer will be different.
There’s no question that when it comes to funding the proliferation of nonprofits poses a real challenge because there are only so many grants to be disbursed or donors to be tapped. Huge amounts of time, energy and resources go into competing for funding. The Calgary Chamber of Voluntary Organizations has studied funding issues in some depth. President and CEO Katherine van Kooy sees a growing awareness among funders in Calgary that their contributions per funded project are not sufficient. That fact undermines the sustainability of funded organizations. “The big dilemma,” she points out, “is that there is a finite pool of money – that’s the issue.” In Calgary, some community-based funders are deliberately supporting organizations at a level that is sustainable but, in turn, they have to make decisions about the number of organizations that they can support.
Then there is the related challenge of competition for fundraisers. In Alberta, says van Kooy, the supply does not meet the demand. Smaller organizations don’t have the same dollars to pay for fundraising professionals and this causes imbalance among nonprofits.
van Kooy identifies an unintended reverse incentive felt by organizations who think about bucking the proliferation trend and merging with one another. In Alberta, charities can apply for funds generated through lotteries and casinos. “The last I heard,” says van Kooy, “the amount that organizations were eligible for was $80,000. If you have several smaller organizations that might be thinking of merging into one organization, they would only be eligible for a total of $80,000 rather than each individually being eligible for that amount. That’s a loss of relatively easy funding with a low commitment of time and resources.”
The challenges of competition within the sector
There’s also no question that there is competition in the nonprofit sector for employees. That has to do with both the proliferation of nonprofits and workforce demographics, says Lynne Toupin, executive director of the Human Resources Council for the Voluntary/Non-profit Sector. You can’t argue with the numbers. There are fewer people of working age, plus the impending retirement of many baby boomers. Therefore, you have greater competition for talent. That’s the reality.
Of course, it’s not just about workforce demographics. It’s also a question of skill and experience. Explains Toupin, “We work on the hypothesis in our sector that we need the best and brightest to achieve our missions. The world of nonprofits has changed in the last 10-15 years. We still have a workforce driven by passion, but the demands on nonprofits have increased and we need specific skills sets and knowledge. There is a ratcheting up of skill requirements.”
Finding a silver lining
Despite the challenges posed by competition within the sector, Toupin and van Kooy can both still see a silver lining. Competition requires organizations to be more disciplined and to operate at higher levels to set themselves apart from others. If you’re going to differentiate yourself from the competition, you have to be innovative and that’s not so bad.
Collaboration is another positive outcome. According to Toupin, “a lot of small nonprofits feel they are unique in their missions, but there are probably areas where collaboration is possible. Perhaps it is possible to collaborate on functional aspects of the organization. For example, not everyone can afford someone to take on the HR management function. Has the time come for organizations to work together and hire one HR specialist who will perform the function for a number of nonprofits?”
The potential for collaboration and shared services
More and more organizations are starting to look at this concept of shared services, and the HR Council for the Voluntary/Non-profit Sector is in the process of exploring the pros and cons, under what conditions it works, and for what functions. Toupin definitely sees that it could work with “back office functions” like accounting and training, which are not specific to an organization’s programs and services but support them instead.
Collaboration is certainly on the mind of Elizabeth Sprecht, executive director of Volunteer Richmond Information Services. She is very aware of the increasing competition for volunteers among organizations, but Sprecht considers this competition an opportunity. The first reason has to do with collaboration and the potential for her organization to lead collaborative efforts. “Competition for volunteers speaks to the opportunity for volunteer centres to play a coordination role. If there is a competitive environment, we need volunteer management standards and practices. Volunteer centres support coordinated recruitment and volunteer management best practices. It’s inefficient if every nonprofit is creating their own volunteer management programs, recruitment tools, training, etc.”
The second opportunity is tied to the fact that if there are more organizations all looking for volunteers, that means there are more opportunities for people to be engaged and serve their communities. The challenge, as Sprecht sees it, exists when it comes to recruiting board volunteers. At a non-board level there are a myriad of options for how people can volunteer: episodic, task force, program, special event, etc. A board volunteer is more specific and structured so there is a limited market with less variety in the options.
Half full or half empty? Opportunity or threat? That’s not a dilemma for Paddy Bowen, project manager of Values Added, an initiative to help the 161,000 charities and nonprofits in Canada deliver a single, shared message. “I don’t see it as either. It’s a reality – a reality that can be analyzed from two diametrically opposed perspectives. Ultimately, it’s proof that we live in a free and democratic society because any nonprofit or charitable organization comes about because someone felt passionately and responded to a perceived need. That is fundamental to our basic freedoms and separates us from many countries where this is not possible. The mere fact of this phenomenon, where people feel passionate and create a response, is one of the best pieces of news in our society.”
Louise Chatterton Luchuk is a freelance writer and consultant who combines her love of writing with experience at the local, provincial and national levels of volunteer-involving organizations. For more information, visit www.luchuk.com.
