10 Case Studies

marilyns@ca.inter.net 

Table of contents

The last decade has been a time of change in funding and resourcing practice for the sector. The Financial Capacity Task Group of the Voluntary Sector Initiative (VSI) launched a nine-week process to identify and document case studies of organizations illustrating financing/resourcing “best practices” - that is ways of resourcing that “enhance the ability of the organization to meet its mandate efficiently and effectively”.These ten case studies, illustrating the resourcing practices of ten Ontario organizations, will form the Ontario section of a national inventory of resourcing “best practices”.The purpose of the inventory is to help organizations and funders to learn about resourcing practices emerging in voluntary organizations across Canada.

Ontario, has experienced dramatic changes in the funding environment for not-for-profit organizations over the last ten years.In addition to the cut backs at the federal level, municipalities have been amalgamated to reduce their numbers and the “who does what” map of provincial-municipal relationship has been dramatically re-organized.The Ontario government has pursued an ongoing course of funding cut-backs, effectively re-shaping the landscape in which the not-for-profit sector operates.In response, many, if not most, organizations in the Ontario have repositioned their funding relationships to government and corporate sectors, and many are also exploring more entrepreneurial forms of resourcing.

There are a number of larger conversations underway in the charitable sector that have shaped the development of resourcing practices in these case-study organizations.These conversations include: the withdrawal or reduction of funds from government sources and the shift from core to project funding; pressure to incorporate business concepts into financial practices ; a focus on outcome measurement; the ability to take an entrepreneurial approach ; and the vigilance required to prevent “mission drift” – a shift in the intention of the work in exchange for resourcing.

Research Method

In order to locate resourcing practices that could provide insight for others, I interviewed sixteen key informants, and had less formal conversations with another sixteen people who work in sector organizations, in universities, or who are funders or consultants.In search of something more specific on which to base the selection of case studies than the very broad VSI definition, I reviewed a rudimentary framework of resourcing practices with key informants and asked them to identify “best practice” organizations, and to help to refine the framework of possible practice.

In working toward a framework from which to select “best practice” organizations, it quickly became clear that there is little well developed language to talk about resourcing practices, particularly across the diversity of sports and recreation, culture, environmental and social service organizations.While the key informants and practitioners were eager to talk about what they have discovered about resourcing practices and models over the last five years of financial repositioning, they were less certain about how to articulate and name them.The exception is in the area of fundraising practice in the traditional sense of obtaining gifts from donors, bequests, direct mail campaigns, lotteries and so on.While many of the case study organizations have active fundraising programs, I did not pursue these stories because there is ample literature in this area.

Naming resourcing practice began to resemble looking through a kaleidoscope of constantly shifting patterns.Yet together, even these ten stories begin to create a picture that emerges as more than a sum of its parts.The framework below evolved as a list of “generic” resourcing practice that guided the locating of the case-study organizations and framing their stories.Each practice represents an ability to mobilize resources, including time, money, or in-kind resources, and each opens into a myriad of possible resourcing strategies.

Guided by the emerging framework, I looked for organizations with activities that met the VSI’s broad definition of a “best practice”, were thriving, and that a key informant suggested exemplified one or more resourcing practices.In addition, organizations were selected for diversity of location across the province, size, sector and approach to the work they do. While the ten case studies cannot represent the range of practice within the sector, nor locate the best of the “best practices” in Ontario, they do tell diverse stories of successful practice.Although a case-study may point to a particular resourcing practice, or combination of practices, each of these case-study organizations has also developed a unique constellation of practices that create a resourcing model.

 Introduction to case studies

Two of the smaller of the ten case studies organizations, the Niagara Symphony and the Owen Sound Satellites Gymnastics Club tell stories of repositioning following financial crisis.Two others, EcoSuperior Environmental Programs and the Consumers Council of Canada have their genesis in the loss of government funding to provincial or national organizations.Their resourcing models are a deliberate repositioning of their work and resourcing practice to more entrepreneurial models, to enable the work to continue.Three others, the Heart and Stroke Foundation, Evergreen and the Niagara Symphony share a common focus on offering a high degree of practical thought to a particular aspect of corporate sponsorship, partnership and alignment at the national and community level.

The Newmarket Soccer Club case-study demonstrates how participatory organizing practice yields a high degree of the most traditional resource of the sector, volunteer time.Voluntary participation in the Club also creates access to both financial resources and savings, through cost avoidance practices.The Catholic Family Counseling Centre and the Ontario Federation of Indian Friendship Centres are organizations with long histories and rich cultures.They have built highly successful models by considering core funding quite differently,while sharing a well-developed entrepreneurial way of thinking, deeply embedded in organizational culture.The Federation’s model includes a small amount of core funding used to leverage substantial program resourcing.The Centre’s model is based on leveraging a wide diversity of funding streams to resource their core.These two organizations and a third, 1 Community Place describe three alternative routes to property ownership as a cost avoidance practice.

Each of the ten organizations have accomplished impressive increases in revenues within the last five years, in the period marked by the heaviest government cut backs.All believe they have found or are close to developing a stable resourcing model, that will ensure their future.

Several of the case-studies make reference to funding from the Ontario Trillium Foundation. This agency has received $100 million per year since 1999 to grant to the not-for-profit and charitable sector from lottery revenues through the Ontario Gaming Commission.The Foundation makes about fifteen hundred grants a year, making it difficult to finding organizations in Ontario who have not benefited from its granting program.Most of the organizations documented have received Trillium funds.Four have used a Trillium grant specifically to assist them in launching a resourcing model to achieve financial independence and sustainability.

As the framework of resourcing practices was important to be able to see across field of case-study choices, so four clusters of organizational attributes have emerged that have contributed to the success of the case-study organizations. Each organization has developed a resourcing model where there is a high degree of congruence with its governance structure, and the kind of work it is built to do. That is, there is a good “fit” between how revenues/resources are generated, who is on the board, and the role they play, and the work the resourcing is sought to support. In the strongest organizations, these three elements are deeply embedded in an organizational culture that links and supports all three elements in a particular synergy.

The second attribute these organizations share is that they have each become very specific about the niche that they have chosen to occupy in the range of work of their sector.They are focused and very clear about what their work is, the outcomes they work toward, and more importantly what their work is not.This clarity more readily permits organizations to locate a convergence of interest between their mission and a source of resourcing.The phrase win/win was often used to describe these arrangements of mutual value.

Thirdly, the boards of these organizations have undertaken the project of developing a model of resource sustainability.They have focused thought and resources on long-term planning, coupled with a genuine belief that the organization has a long-term future, and have set out a specific goal of achieving financial independence.Finally, the governance practice of each of the organizations includes oversight on the mission in relation to resourcing practice.This function includes building elements of organizational culture that support resourcing decisions that are congruent with mission, and in some cases, creating “firewalls”, structural or practical checks and balances that protect the organization from undertaking activity in exchange for resourcing that compromises its mission.

Finally the overarching impression left after talking with people in these organizations, writing their stories, checking the facts and negotiating language is of their vibrancy.They are determined, they are thinking hard, they are imagining and they are struggling.These are organizations that do not stay the same for very long.Their stories are of some project under development, some new vision grown out of the last, a picture painted of what is newly possible and not yet within reach.It is heartening to think that what they have learned, it may be possible for their stories to teach.

Organization: Ontario Federation of Indian Friendship Centres

Address:219 Front St. E. Toronto M5A 1E8

Contact person:Sylvia Maracle Executive Director

Phone:416-956-7575

Fax:416-959-7557

Email:smaracle@ofifc.org

Web site:www.ofifc.org

Background and Overview of Organization:

The Ontario Federation of Indian Friendship Centres was established in 1971.It now supports twenty-eight Friendship Centres in Ontario in their efforts to improve the quality of life for Aboriginal peoples in an urban environment.A Friendship Centre is a community-based organization that provides programming in the areas of social cultural, recreational, economic and community development.The Federation’s role with the Centres includes: negotiations with government on behalf of the Centres, assistance with cultural awareness, information, programming, community development, funding and management.The Federation also assists with information and communication to and between Centres and with the development of new Centres.

Fifty-two people work at the Federation, supporting more than four hundred who work in Friendship Centres across the province.Most of these Centres now have core funding from the federal government, although some have only been recognized recently.The Federation has played an important role in lobbying the federal government for core funding, and in the development and management of program funds that the Centres spend to address specific issues.Sylvia Maracle, long-time Executive Director notes that this kind of lobbying is essential particularly for Centres in small communities, who do not have the lobby reach of organizations in metropolitan centres, and who face a higher degree of racism.The Federation has an annual budget of $29 millionbuilt around core funding of $368,000 from the Ontario Native Affairs Secretariat (ONAS).In 2002 it managed fifty-four programs and services on behalf of governments and the Friendship Centres. 

Summary of funding arrangement

Using the ONAS core funding of $368,000 to staff core positions, the organization leverages additional core support of $1.6 from management fees, purchase of services, administration fees, interest income and rental of meeting rooms to complete a core budget of $2 million.The Federation holds an additional $27 million worth of program contracts on behalf of Ontario Friendship Centres with federal and provincial governments.

The Federation obtained its own core funding agreement from the province in the early 1980’s.In addition to this core, the organization can be seen to maintain three other areas of financial activity:program & service contracts that directly fund the work of the Centres, economies of scale, ventures that enable the Federation and the Centres to reduce overhead costs and entrepreneurial activities that enhance the Federation’s and Ontario Friendship Centres’ ability to meet their mandate over the long term.

Core funding from the province pays for seven staff positions:the Executive Director, financial officer, a policy analyst, a trainer, an executive assistant, a secretary, and a receptionist.The organization uses this 1.2% of its core budget to raise and spend the other 98.8%, an astonishing rate of resource leveraging.Sylvia notes the importance of core funding in helping organizations make long term plans.“In the nonprofit world, lots of people are afraid maybe in five years I am not going to be here – it is getting them over their fear,- if you think that way and behave that way absolutely you are not going to be here”.

The $27 million in programs and services that the Federation manages are in the form of program funding contracts administered to the province’s Friendship Centres on behalf of the provincial and federal governments.They offer funding for programs such as:alcohol and drug workers, HIV/AIDS advocacy and training, youth Centres, problem gambling, child povertyand alternative justice.These programs have often been lobbied and negotiated for by the Federation, recognizing emerging need in the urban Aboriginal community.Some programs have been effectively “downloaded” to the Federation to administer on behalf of government as governments downsize and streamline.Sylvia notes that the Federation can both do the work more efficiently without the overhead of bureaucracy, but also do it better, because they are recognized as experts in the Aboriginal context of the work.

Economies of scale ventures include negotiated services such as banking and staff benefit packages.Core funding, Sylvia suggests, provides the stable platform from which organizations can search for efficiencies, because they know they will be in existence over time. Collaborative arrangements between organizations are a key place to look for savings on economies of scale, but with fiscal uncertainty, under-funded organizations are often reluctant to venture.“If you don’t know if you are going to be here April first, you don’t want to drag your friends down with you.It’s that isolation that has really attacked some of the ways that we could take care of each other a little better.”With enough stability to plan, Friendship Centres now bank together, taking advantage of better than average deals on interest rates.In Ontario, the Federation has negotiated a staff benefit package using the combined volume of Centre staff, at an estimated cost savings of 50%.

With an extraordinary leaning toward long term planning, the organization is fifteen years into a twenty-year strategic plan.This long-term vision, in part created by having access to core funding, has enabled the organization to consider its future well past the five year window of many strategic plans in the not-for-profit sector.Entrepreneurial investing has enabled the organization to develop a capital equity of $2.8 million, over its thirty year history.Its offices are in its own building on Front St. in Toronto.Revenues from room rental supports a quarter of the mortgage payments.

In the 1970’s, money from bake sales and other small fundraising ventures at the Centres launched the Federation’s first entrepreneurial investment project, raising enough money to purchase land for a children’s camp.In mid-sale, the vendor died and the land became part of an estate in probate, neither bought nor sold.Although the Federation eventually came to own title to the land, they had, by then realized that it was not what they wanted.They invested the original funds and $16,000 profit from the sale and created a First People’s Fund, an investment which eventually grew to $360,000.The Federation used the funds to buy a building in Toronto.Capitalizing on the building boom, they later sold it for $1 million, to buy their current building.The acquisition project helped the organization understand the value of long-term financial planning, revenue diversification and an entrepreneurial approach to financing.

In the same vein, the Federation has established the Villages Equity Corporation.Rooted in the traditional integrated and interactive economic model of Aboriginal communities, the corporation is incorporated with share capital, and has its own board of directors, many with community economic development experience.Freer to invest that a not-for-profit corporation, the Villages Equity Corporation now holds $280,000 worth of shares that have been purchased by the Centres for a minimum of five years.

This case study points out the innovation and leveraging potential ofa proportionately small amount of core funding.As governments have pulled back the degree of financial support to the sector, core funding has become more difficult to obtain, and retain.Project funding is seen as a mechanism to reduce dependence and cost, yet as this case study demonstrates, core funding may be a better mechanism to reach those outcomes.As the Voluntary Sector Initiative, and other tables in the sector, talk about the need to return some programs to core funded support from government, Sylvia makes some compelling arguments for funders to consider how small amounts of core funding can create leverage and innovation within sector organizations.What makes it a best practice?

Core funding, even in very small amounts can offer organizations a sense of stability, and the belief that they are going to be around to develop the vision of their work over the long-term.In the case of the Federation, the Friendship Centres have developed a depth of shared purpose and a collaborative ability that marks years of work together.A sense of longevity provides the impetus to plan and to establish funding mechanisms that develop over decades rather than months.Sylvia says of Federation twenty-year plan: “ Whether or not it’s a dream it doesn’t matter.It was motivating.It gave us a sense that we wanted to be more than we were.”

She speaks of a “failure to thrive” induced into the sector by a style of government funding that creates very short and unstable windows of opportunity for development and growth.“I think the way governments has done financing in the last few years is absolutely dreadful in terms of the non-profit sector.I think that if people can count on you - and I think that we are going to be the social safety net because government isn’t going to be it anymore - then non-profit organizations have got to be safe.I think that core funding is absolutely vital in that scheme of things.”

Beyond long-term planning capacity, she suggests that there are other benefits of core funding.The stability enables the organization to retain staff on a career path and so support the development of expertise within the organization andthe sector.Stable staffing helps the organization to develop an “imprint”, to have the capacity for corporate memory.It creates the potential for relationships with government and others.This increases the potential for partnership and negotiation, and it allows the development of corporate profile and public identity essential to leveraging resources.

Could other organizations adopt or adapt this practice?What modifications, if any, would need to be made?

While other not-for-profit organizations many not have access to core funding, Sylvia points out that core funding to both the Federation and Centres resulted from a lobbying effort.In this case study, she provides the rational to support those efforts and offers advice to funders on how funding can be flowed to maximize an organization’s abilities to use even small amounts of government funding to leverage both other resources and savings.

Long-term planning, entrepreneurial investment and efficiencies of scale are all practices that, while enhanced the long-term thinking supported by core funding, can be undertaken without it.She notes that what the Federation has done, by linking Centres across Ontario to achieve the scale necessary to negotiate an affordable benefit package, could by done on a community basis across different organizations.“You don’t need an umbrella group.There is nothing stopping you in a small northern town where there are only four or five nonprofit organizations.E.D.’s meet each other all the time.What can we do about printing costs?What can we do about mail or courier costs?What can we do about employee benefits?There are economies of scale, there are savings to be made.”

Lessons learned 

Sylvia points out that the umbrella organizations must learn to be creative aboutresourcing.She predicts a “quick demise for organizations who are the umbrella [and] whose member organizations see the core getting bigger and bigger at the expense of the programs.This first principle has lead the Federation to be creative in their search for diverse funding sources.Using available dollars to best advantage and often entrepreneurially has been a theme for Sylvia and her board in the management of funds.She offers these lessons to enhance organization’s abilities to leverage resources, to people who structure government funding programs.

About core funding:

Consider growth in core funding recognizing that costs increase over time, even without program growth.

Recognize and reward leveraging of resources using government funding.She notes the disincentive built into messaging about her own core funding.“I am not essentially rewarded for parleying $368,000 into $1.6 million [for the core], if anything, [they say], well you don’t need us.”

About program funding:

Be transparent about how much is available from the program for administration.The Federation uses a standard of 15%, which included a range of specific services from supervision to clerical support.The lack of transparency in many funding programs about what percentage of a program budget leads to guesswork and competition in the sector.

Annualize non-core program commitments for a three to five year window of development.This gives organizations time for program development and reduces the cost of funds seeking and negotiation.

Give not-for-profit organizations the benefits, not the expense, of cash flow equity.In transferring payments from receipts for funded programs to the Centres, the Federation in some cases can bank dollars received ahead and earn interest.In other programs it must flow the funds before they are received, effectively supporting the cash flow of government.She recommends payment at six-month intervals.Monthly payments hamstring organisations that need cash flow to begin the work.

Negotiate management fees to cover real core costs when sector organizations take on contracts to administer government programs

Outcomes and Evaluation

N|A

Partnerships and alliances

See above

Future plans

The Federation has two new enterprises.A Native Children’s Foundation has been created to help to address the needs of Urban Aboriginal children.A second venture, intended to access private sector resources and to shift government thinking about Aboriginal education, will develop a post-secondary institution called the Original People’s Learning Centre.The Centre will work to maintain the integrity of the indigenous knowledge and will become a knowledge broker.The Federation is often asked to develop training on Aboriginal andracial sensitivity issues for government.Training fees will be invested back into the Centre and the work of promoting the expertise of Aboriginal people.

For more information

Contact Sylvia Maracle

Supporting Organizational Infrastructure in the Voluntary Sector: A background paper prepared for the VSI Secretariat, Lynn Eakin, Lynn Eakin and Associates, May 2002.

Helping Canadian Help Canadians:Improving Governance & Accountability in the Voluntary Sector, Discussion Paper from the Panel on Accountability & Governance in the Voluntary Sector, May 1998

Charities Doing Commercial Ventures: Societal and Organizational Implications, Brenda Zimmerman & Raymond Dart, The Ontario Trillium Foundation and the Canadian Policy Research Network Inc., 1998; Enterprising Nonprofits: A Toolkit for Social Entrepreneurs, J.G.Dees, J. Emerson & P. Economy, John Wiley & Sons Ltd., 2001

Enterprising Nonprofits: A Toolkit for Social Entrepreneurs, J.G.Dees, J. Emerson & P. Economy, John Wiley & Sons Ltd., 2001