By Esther S.J. Oh

During the months of June and July 2023, the Ontario Nonprofit Network (“ONN”) conducted its fourth annual sector-wide survey to gather information on the state of Ontario's not-for-profit (“NFP”) organizations, including information concerning their financial well-being, staffing, volunteers, and overall operations. Nearly 1,400 NFPs, charities, and grassroots groups from across the province participated in this survey. ONN developed several resources, including a policy report titled “2023 Realities for Ontario’s Nonprofit Sector” (“Report”) . The Report features recommendations for both the government and the charity/NFP sector, together with a technical report presenting key data highlights.

The findings from the past four years reflect several significant trends:

• Demand for services from NFPs has reached an unprecedented high level over the past four years, with a 29% increase since 2020.
• Financial challenges are becoming increasingly prevalent, as many NFPs face a concerning “downward spiral”.
• Two-thirds of the sector are having to deal with staffing issues, particularly in recruitment and staff retention.
• Reports of NFP closures have surged, with 35% of organizations surveyed reporting that they are aware of another similar NFPs closing down its operations.
• Over this four-year period, only half of the sector has experienced slight increases in revenue, while 90% have reported an increase in expenditures.

NFPs are more vulnerable to the ever-changing social changes and context (more than other sectors and industries). Crises in the community translate into an increased demand for services from NFPs, often without corresponding additional support being provided to the NFPs to address the increased demand. At the same time, economic uncertainty and austerity measures lead to reduced donations and government funding.

Despite these formidable challenges, NFPs continue to bring immense value to their communities across Ontario. In this year's survey, NFPs shared their dedication to operating safe consumption sites, implementing HIV programming, facilitating access to organized sports for children from low-income families, nurturing artists with entrepreneurial skills for sustainable employment, supporting refugees from around the world, and undertaking a number of other valuable initiatives.

The findings of the Report indicate that if no substantial changes occur by 2026, the consequences will be dire. Cutbacks, extensive waitlists, and NFP closures will reach devastating levels, impacting communities throughout the province. Service provision will become untenable due to decreased funding and escalating costs, exacerbated by a lack of skilled staff to address pressing societal needs. 2023 Realities for Ontario’s Nonprofit Sector states that continued downward trends have the potential to push Ontario's NFP sector to the brink of collapse. 

In this regard, ONN’s analysis and forecasting focused on the following areas: service demand, NFP sustainability, costs, and closures.  ONN’s analysis indicated the following predictions for the sector by the year 2026:

• Every NFP in Ontario will experience a surge in demand for service.
• Only 17% of NFPs anticipate financial sustainability for a 12 months period or longer.
• NFPs will face a 131% increase in costs.
• 63% of NFPs will be aware of similar organizations closing their doors and ceasing operations.

ONN goes on to state that the loss of NFPs and their invaluable contributions will lead to communities that are economically less viable, less socially vibrant, and less connected.

To counter these predictions, ONN's made the following recommendations:

• Create a home in government for the sector to efficiently collaborate with Ontario's 58,000 NFPs and charities.
• Safeguard Ontario's social infrastructure for the future.
• Invest in NFPs and grassroots groups that serve equity-deserving communities.
• Provide support to the sector to build a resilient NFP workforce for the years ahead.
• Modernize the volunteerism landscape to ensure its relevance and effectiveness in the changing times.

ONN will host a webinar on November 29, 2023 for NFPs to discuss how the sector can use the data in the ONN Reports to advocate for themselves and for the sector.

​Read the October 2023 Charity & NFP Law Update