As the Canadian economy faces the challenges of a downturn, the role of human services becomes vital, particularly for nonprofit organizations. Economic recessions can lead to the following:
As a result, individuals and communities turn to human services for support. But when large volumes of people need the same help, yet financial support dwindles, strategic approaches and collaborative efforts are needed to ensure the well-being of Canadian citizens.
The economic landscape in Canada has seen its share of fluctuations, with recessions affecting diverse sectors and communities alike. Most notably, according to the Financial Post, major Canadian banks' stock prices have dropped due to the worsening economic outlook. Even though human services may not directly receive funding from banks, this financial setback could still indirectly impact them. Let's consider the reasons why.
Recessions often lead to a decrease in available funds. During the Great Recession, total social sector revenue saw a significant decline. Nonprofit organizations might receive funding from foundations, many with assets invested in the financial markets. An economic recession can reduce the value of these investments, resulting in smaller grants from those foundations. Additionally, banks tightening lending standards can make securing loans more difficult for for-profit entities. As a result, an economic recession can create a highly competitive environment for limited resources.
To make matters worse, a recession typically increases demand for human services. More individuals and families require assistance with basic needs such as food, housing, and healthcare. With reduced funding, it may be even more challenging for organizations to meet the growing service demand. It is essential to recognize this pattern and proactively prepare for the surge in demand by:
These are all crucial strategies for human services to navigate these challenges.
Partnerships with other organizations can be beneficial during a recession. Together, they can share resources, knowledge, and expertise, enabling them to pool their efforts and provide comprehensive support even in challenging economic conditions. Collaborative approaches can also enhance advocacy efforts and increase collective influence.
While the COVID-19 pandemic wasn't the result of a recession, its aftermath in job loss and mental health issues are similar. Many human services partnered with other nonprofit organizations during that time to provide relief. Here are a few collaborative partnerships that helped during this challenging time:
Relying on a single funding stream can make human services more vulnerable during a recession. To mitigate this risk, use a variety of different funding sources. Below are some ideas:
Government agencies at the local, provincial, and national levels often provide grants for human services. Contact Human Services (HHS) or the Canadian Social Development Department for grant opportunities.
Private foundations offer grants to support various causes, including human services. Canada.Grant.Watch, or FoundationSearch Canada, provide searchable databases of foundations and their grant opportunities.
Online grant directories and databases provide comprehensive listings of grants available to organizations. Imagine Canada's Grant Connect allows searching for assistance based on criteria such as focus area, location, or funding amount.
Access to different funding sources can ensure financial stability and reduce reliance on a single funding stream that may be affected by economic downturns.
Organizations need to use their limited resources wisely while proving their effectiveness. By emphasizing outcome measurement, they can prove their value and efficacy to funders and stakeholders.
Also, they need to identify their high-value-impact areas within their assessment. These metrics build a compelling case for continued funding, support, and strategic resource allocation. Additionally, they can yield significant cost savings by reallocating resources from less effective departments.
In times of economic uncertainty, human service organizations are crucial in providing support, fostering resilience, and promoting well-being in Canadian society. By recognizing the potential impact of economic downturns and adopting proactive strategies, they can better navigate the challenges and demands of recessionary periods. It is imperative to harness this knowledge, leverage available resources, and encourage collaboration to continue providing essential services to those in need.
Investing in a modern Enterprise Resource Planning (ERP) system can help enable better decision-making, and that's what human service organizations need during challenging times. For one organization, an ERP allowed them to report back to their funders and demonstrate the positive impact that funding had on their outcomes. Read their story here. This proof of efficacy is vital to maintaining continuity in funding for years.
As we embrace the challenges and opportunities within the human services sector, our commitment to empowering organizations to weather economic downturns and meet the growing demands of communities across Canada remains steadfast. By fostering collaboration, diversifying funding sources, and prioritizing effectiveness, Sparkrock 365 stands alongside human services organizations, enabling them to deliver essential support and make a meaningful difference in the lives of Canadian citizens.
Together, we can navigate the complexities of uncertain times and build a more resilient and compassionate future.
We want to help you prepare for challenging economic times and are happy to share what we've learned about your industry. An Enterprise Resource Planning (ERP) Tool can help provide accurate financial insights and help you evaluate your organization's performance with less effort.
Let us take you through the benefits of a fully-integrated, single platform for financial management, human resources, scheduling, payroll, and the key features we've built to help human services thrive. Reach out to us here.