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Adapt or die:
The new NGO
funding reality

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OTTAWA | WEDNESDAY, OCTOBER 15, 2014 | ISSUE 520

Green MPs agree to disagree on Iraq

The North-South Institute closed

after 38 years because it couldnt scrape
together enough non-federal cash. For
many others, that struggle continues.
Kristen Shane
Five years ago, the social justice group
KAIROS was hit in the gut.
For 34 years, the Canadian International
Development Agency had funded part of its
budget so it could give grants to partner
groups overseas, pay salaries and expenses,
and talk to Canadians about foreign aid.
When the Toronto-based coalition of 11
churches and religious groups applied for
CIDA to fund its 2009-13 programs, the application was recommended for funding by
bureaucrats, but the ministers office put the
kibosh on the $7-million deal.
The funding cut became a political storm.
The House of Commons speaker ruled that the
CIDA minister may have misled members of
Continued on Page 4

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Canada defends
blocking NDP
MP from
speaking at
Arctic meeting

Green Party Leader Elizabeth May and Green MP Bruce Hyer are all smiles on Oct. 10 as they discuss their differing votes in Parliament on whether
to support Canadian air strikes in Iraq. While the Liberal Party struggled to show a united front in the face of internal conflict over the vote, the
Green MPs openly disagreed. Embassy Photo: Laura Beaulne-Stuebing

Department, minister blame

packed agenda.

Laura Beaulne-Stuebing

Carl Meyer
Canadas Foreign Affairs department is
defending its decision to block an opposition
member of Parliament, representing a group of
Arctic lawmakers from various countries, from
speaking at a meeting in Canada.
The incident occurred at a meeting of
senior Arctic officials of the Arctic Council
in Yellowknife, NWT in late March, but was
revealed in detail in a separate report tabled
Oct. 8 in the House of Commons.
Dennis Bevington, the NDP MP for
Northwest Territories, had asked to speak to
the meeting of senior officials, in his role as
the vice chair of the Standing Committee of
Continued on Page 5

Elizabeth May and Bruce Hyer say

voting on the military mission against
Islamic State fighters wasnt easy.

Green Party member of Parliament

Bruce Hyer and party leader Elizabeth May
sat on a couch in Mr. Hyers parliamentary office in Ottawa on Oct. 10, disagreeing with each other about Pierre Elliott
Trudeaus strengths as a prime minister

Celebrating
UN Day of
the Girl with a
chicken leg
PAGE 12

and the former Liberal leaders environmental record.

The conversation had veered from a discussion about that weeks House of Commons
vote on Canadas military mission in Iraq.
There was a bit of tut-tutting from Ms. May
at something Mr. Hyer said, and a grumble or
two from Mr. Hyer too as they talked.
This is just the way they work, it seems;
they discuss, debate and disagree sometimes, inside and outside the House of
Commons, and for all to see.
On Oct. 7 the two MPs from the same
rty cast different votes on whether to su
party
sup-

Diplomatic
Circles
Egypt
gypt
PAGE
AGE 2

port the governments plans for air strikes

in Iraq, which Ms. May said received a lot
more attention than other times they offer
differing opinions. But while conflict within
the Liberal Party about the vote made
headlines, the Greens disagreement flew
relatively under the radar.
Mr. Hyers support for the mission caused
some backlash on social media. The motion
passed in the House with a Conservative
majority, 157-134. The only non-Conservatives
to vote with the government were Mr. Hyer
Continued on Page 13

At Hong
Kong protests,
Canadians
are highly
visible
PAGE 9

EMBASSY, Wednesday, October 15, 20144

News Development

Adapt or die: The new NGO funding reality

Continued from Page 1

Parliament, and a handwritten not scrawled

on a funding recommendation made headlines.
This fall marks five years since government officials told KAIROS staff members they
werent getting the money theyd hoped for. It
was a 47 per cent cut to the groups revenue,
said executive director Jennifer Henry on
Oct. 14.
Yet the church group is still chugging along,
although with a reduced footprint. KAIROS
gradually shrunk staff and had to lessen funds
to partners overseas. It relied more on support
from its 11 member church groups.
It also doubled down on fundraising and managed to receive more than double its support
from individual donors, from about $153,000 in
2009 to $360,000 in 2014, said Ms. Henry.
I think people came to know about us
through the controversy or the crisis. And
I think that we were able to communicate
the value that we offered to our partners...to
Canadian international development. So we
had an opportunity to communicate that in
a clearer and stronger way to a larger group
of people, she said.
KAIROS is one of many Canadian non-governmental organizations working on international development that have lost key federal
funding over the last few years.
As the Harper government shakes up the old
ways of federal funding for foreign aid NGOs, many
of these groups are faced with asking traditional
donors for more money, and finding new revenue
sources. That may mean shifting resources from
crafting federal grant applications to crafting a
more concrete vision statement that any potential
new donor could understand.
It may also mean wrestling with the ethics
of reaching out to new funders without shifting away from the groups ideals.

NSI, just the latest

The latest example, the North-South

Institute, closed this fall after 38 years. It
was Canadas only independent think tank
devoted to researching foreign aid.
In the graveyard, it joins other groups
that once had strong government support
(if not official links) including the Canadian
Foundation for the Americas (FOCAL),
which closed in 2011; the Pearson Centre,
which did peacekeeping training for almost
20 years, until its closure in 2013; and the
democracy-promotion agency informally
known as Rights and Democracy, which the
federal government announced it would shut
down in 2012.
The government changed the way it funded foreign aid NGOs in 2010, leading to a focus
on funding projects rather than groups. Fewer
Canadian aid groups have been receiving core
funding: money that isnt tied to specific projects but rather is used to fund a groups core
programs. And the government has focused
on calls for proposals that pit groups against
each other as they bid for federal project
funding, rather than responding to groups
funding requests.
While the North-South Institute managed to
find non-federal funding sources for individual
projects, the federal grant helped cover the
institutes overhead costs, the kind of money
thats used to keep the lights on and rent paid.
[T]he Institute has not been successful in
diversifying and growing its funding sources
to the extent required to ensure financially
sustainable operations, read a Sept. 10 NSI
statement announcing its closure.
Not every foreign aid charity relies on
government grants to survive. An analysis
of 2011 tax data for the Canadian Council for
International Co-operation, an association
of international development groups, indicated that the largest revenue source for aid

Members of the United, Anglican and Catholic church communities on Salt Spring Island, BC rally to demand that the Harper government restore funding to KAIROS that was cut in 2009. KAIROS Photo

and development groups was tax-receipted

gifts, with just under 90 per cent of charities
reporting this revenue source. Only about
15 per cent of charities reported the federal
government as a revenue source.
In another report commissioned in part
by CCIC and based on a survey earlier this
year of 138 civil society groups, almost 60
per cent of those surveyed said revenue from
the Department of Foreign Affairs, Trade and
Development (CIDAs successor) made up less
than 25 per cent of all their money coming in.
Thirty per cent reported being dependent on
DFATD for more than 50 per cent of revenue.
The survey suggested that groups reliant
on the department for more than half their
revenue have been slower to diversify funding sources. Thats worrisome, said Julia
Snchez, CCICs president-CEO.
Were seeing the organizations gradually
lose their capacity to intervene to follow up
with their partners and their projects on the
ground as their grants expired, she said.
Her own group lost the biggest chunk
of its budget when CIDA cut funding to it in
2010, leaving CCIC to shed two-thirds of its
staff. The organizations saving grace was its
members, whose fees were doubled to make
up the funding shortfall.
The North-South Institute didnt have
membership fees to fall back on.
Ms. Snchez said members of the
Canadian foreign-aid community need to talk
about whether they want something like NSI
to exist as a public good, and how might they
fund it if they do. Ideas she said shes been
hearing included that such a think tank could
be housed at a university.
She also said shes keen to look deeper at
the funding model of the Canadian Centre for
Policy Alternatives, an Ottawa-based non-profit think tank that calls itself progressive and is
supported by individual members.

Youre trying to sell

Some of the NGOs that recently closed when

federal funding dried up were often closely
aligned with the civil service milieu, said Scott
Gilmore, founder of the Canadian non-profit
Building Markets. If they werent officially linked
or set up by government, their boards included
a heavy mix of former bureaucrats, judges and

generals and they were staffed by employees

with government ties.
Running an NGO is like running a small
business, he said. When theyre created,
staffed and run by people whove never lived
in that space, its difficult to change their
behaviours after so many years of government funding reliance.
They cant adapt, they cant cut costs,
they dont know how to sell, he said. When
youre running an NGO, when youre trying
to raise money, what youre really trying to
do is sell: youre trying to sell an idea, a service, a program, an impact.
His organization, which helps small businesses in poor countries get access to international
customers, finance and investment, has received
Canadian government funding off and on, he said,
but also money from other governments.
Its offered to do fee-for-service work for
international investors, tried to build relationships with private foundations in the United

States and Europe and wealthy benefactors,

tried online crowd-funding to support general
activities, which worked well, and did corporate sponsorship with mixed results.
Charities today seemingly have the pack
stacked against them. Traditional loyal
donors are getting older and dying, and the
question is how to engage younger people in
giving, said Peter Ward, who used to lead fundraising for World Vision Canada and after
leaving in 2013 became a private consultant.
Traditional media that used to work wont.
People wont just respond to pamphlets in
the mail. They are making choices online.
That makes standing out important. With
thousands of Canadian charities to choose
from, those that fundraise well know they
need to show their unique value, said Mr.
Ward. They need to clearly articulate their
mission in a way thats appealing to people.
Continued on Page 8

Fundraising tips
Go global

Given Canadas key role in the climate

change debate these days, there would
be many Europeans and American foundations happy to support a Canadian
environmental group, suggested Scott
Gilmore, head of the non-profit Building
Markets. Dont just look to Canadian
funders, he said.

give a bit of money, and a few will give a

lot. The fundraisers job is to try to move
the donors at each level of the pyramid
upward: convert one-time donors to
monthly giving, and ask the monthly
supporters to boost their gift. Its easier
to convert small donors into larger ones
than to find new supporters, he said. Talk
to them about giving more.

Dont wait for the crisis

Make it personal, specific

The North-South Institute worked hard

for years to get funders aside from the federal government. But even that may not have
been long enough. While non-profit fundraising expert Ken Wyman said hes not familiar
with the NSI details, struggling groups may
need to invest in fundraising staff and building relationships with new donors. That
could take five years or more, he said.

Upgrade your donors

Theres a donor pyramid, said Mr.

Wyman. A lot of individual donors will

Fundraising requires resources, but

it doesnt necessarily need to be cashintensive or even staff-intensive, said Mr.
Wyman. One low-cost method is to use
trained volunteers, like board members,
to talk to their friends face to face.
Make the pitch specific and purposedriven. Its never We want $100,000,
says Mr. Wyman, its We need to do
research on how oil is affecting global
politics, and our research plan is going
to cost $100,000. Will you be willing to
contribute to that?

EMBASSY, Wednesday, October 15, 20148

News Development

Cant just chase money because its on table

Continued from Page 4

A person will choose one organization

over another not because its been around
for dozens of years or is the largest. What
people say is that they work on something
that is important to me, he said.
International NGOs sometimes describe
themselves on their websites in vague, technical jargon, he said. It all sounds the same and
its not meaningful to the outside reader.
People need to be inspired, they need
to believe that this is an organization thats
doing something thats really important that
they want to be part of, and that they believe
that by being part of that organization they
can make a difference.
Groups have to do a better job of telling
powerful stories of whats at stake to draw
people in, he said. It has to be personal.
Telling someone that they can help end poverty because millions are suffering is so massive and impersonal that that person will feel
like the problem is too big for them to help.
Focusing on one child or family makes a much
stronger personal connection.
But theres a fine line between fundraising to help a poor person in need and trying to sell them like theyre toothpaste or
soap. Charities must respect their partners
abroad, uphold their dignity and not portray
the poor as victims, he said.

Some have it easier than others

Each fundraising method comes with its

own risks and rewards, and some groups have

it easier than others. Emergency relief groups,

for instance, may benefit financially from
strong imagery of disaster-affected places and
people, but that may prompt a flood of onetime donations for a specific cause that doesnt
translate into long-term support or money for
lower-profile emergencies. Child-sponsorship
groups have a more long-term, loyal donor
base of people giving $30 a month for years.
Without question, think tanks like NSI
have it toughest, said Ken Wyman, who
teaches fundraising management at Humber
College in Toronto. They are selling ideas and
sound policymaking.
They cannot say, Your donation will
save a childs life, or drill a well, he said.
Think tanks have to think about the
broader audience and go beyond their community of experts in communicating why the
public should care about their work, said
Mr. Ward. People want to know where their
money is going, he said.
Governments do too. That kind of behaviour
prompts a quest for all donor money to be
accounted for with results, leaving groups like
the NSI at a loss for covering operating costs.
Few donors want to give to general operating costs, said Mr. Wyman, so the answer is
to do what businesses do: dont tell the customer the pizza is $15 plus $5 to power the
oven and make sure the restaurant is clean;
build the overhead cost into the full price of
the product. The key is to be up-front with
donors and to impress upon them that the
results they want cant be delivered without
operating teeth.

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A North-South Institute meeting in July 2013

about global development goals after 2015, with
Canadian government, UN, diplomatic and NGO
representatives. Embassy Photo: Kristen Shane

Biting the hand that feeds

The challenge with having only one or two

big donors, whether its a corporation or government, is that the charity may feel beholden
to their big backers: they risk censoring themselves so as not to bite the hand that feeds.
Some corporate donors give unrestricted
funds, said Mr. Wyman with the understanding that even though they are supporting a
charity, that group may still criticize what

they do. Other groups throw money at charities to help scrub their image.
A charity doesnt want to be seen as helping
to cover up a companys bad behaviour, said
Mr. Gilmore. Whats guided his group in its work
with mining companies, he said, is setting up
a framework in advance. It would detail which
type of companies the non-profit would be willing to work with, in terms of their transparency
and accountability, for instance. That same filter
would apply to every company that comes
knocking, no matter how much money theyre
bringing to the table.
With any funding option, the group must
ask how they can maintain their independence, said Ms. Snchez.
Organizations cant just chase money
because theres money on the table, said
Mr. Ward. They have to make sure theyre
able to take money that is consistent with
their mission.
He said hes seen the temptation of taking money for an area that a charity doesnt
work on, and the group moving its mission
to fit the money. The group risks becoming
something its not, and not being able to
effectively get the results it set out to get.
Altogether, said Mr. Wyman, a former
fundraiser for Oxfam, not putting all your
eggs in one basket is good practice for a
foreign aid NGO like it is for a business.
Unfortunately for far too many NGOs, we
became dependent on government funding,
and that put us at risk.
kshane@embassynews.ca
@kristenshane1