Canadian charities hit by double whammy of rising costs, more demand
Recession fears are the latest headwind hitting the not-for-profit sector as inflation spikes
The school year may be over, but a team of staff and volunteers at Brown Bagging for Calgary's Kids is sorting granola bars and other snacks for children attending summer camps in the city.
Like many charities across the country, demands on the organization have never been higher as inflation costs put a squeeze on many families who are already on a limited budget. During the last school year, the number of kids requiring food from the charity rose almost 20 per cent from September to June to about 5,400 children everyday.
At the same time, those rising prices are impacting charities themselves.
Brown Bagging for Calgary's Kids receives some food donations, but still spends more than a million dollars a year to provide nutritious lunches.
Even at wholesale prices, the organization says many costs have soared such as celery up 114 per cent, carrots up 29 per cent, and turkey up 12 per cent.
"Kids need fruit and veggies and protein and whole grains. Our costs went up for those items across the board. We're committed to continue to purchase those," said Bethany Ross, the organization's executive director, during an interview at its kitchen in downtown Calgary.
"We know that gas prices, utility prices, food prices, housing costs, all of those things are up and that just creates a lot of pressure on families."
Pressures mount, donations lag
Charities are facing financial pressure on multiple fronts as inflation drives up expenses. Demands on the not-for-profit sector are increasing, yet donations are lagging and the economy could fall into a recession in the year ahead.
Some organizations are having to pullback on the services they provide as they weather the financial storm.
For more than three decades, Vancouver-based Acts for Water has provided clean drinking water in Uganda. The organization was set to build its 25th water system in September, but that project is now suspended as costs swell and donations are uncertain.
"Today I got a call, literally just before this one, where our second largest donor has paused their giving. They didn't give a reason, but we're starting to see the chill here with monthly donors starting to pause as well," Jeff Golby, the organization's chief executive, said during a video call interview.
In Uganda, the cost of iron pipes is up 25 per cent, diesel is up 70 per cent, and cement is up 37 per cent, Golby said, among other increases.
"What the future holds really is determined by how aggressive the inflation rises and what happens with our recession," he said. "How the fall goes will determine how many people we provide clean water to."
Canada's economy is generally in pretty good shape, experts say, pointing to many factors such as an unemployment rate that has never been this low. Still, interest rates are on the rise in a move analysts consider necessary for combating inflation. This is also expected to cause further affordability issues for many Canadians and small businesses.
CanadaHelps, an online charitable fundraising platform, raised about $450 million in 2021, a two per cent decline from the previous year. It was the first time in the organization's 22-year history that donations decreased from the previous year.
"Canadians have always been very generous, but it is definitely unprecedented times," said Shannon Craig, CanadaHelps' chief marketing officer.
The Southern Alberta chapter of Habitat for Humanity has faced rapid changes in the cost of building materials over the last few years. It has tried to cope by searching for lower-cost alternatives for flooring and tiling, among other products.
Despite financial headwinds, the organization is moving ahead with a new housing project in northeast Calgary, which will break ground this week in response to an increase in applications by families searching for affordable housing.
"We have a large number of applications," said Jody Moseley, a spokesperson for the organization. "You see people in the rent-cycle where rent continually goes up. Home ownership is even more challenging than ever before for people to get into their first home."