Nonprofits bracing for impact, again

By Esther Tung
Illustrations by Inma Hortas
Photos by Jamie Poh and Peggy Lam

As demand for nonprofit services reaches record highs, government grants are drying up. Nonprofits are left scrambling, being forced to shutter programs, lay off staff, or close their doors, just at the very moment they’re needed most. A report from Carleton University found that in 2024, only 12% of Canadian charities said they felt financially stable, a steep drop from 21% the year before.

“We’re in an austerity moment,” said Mebrat Beyene, the vice president of grants and community initiatives at Vancouver Foundation. “And it’s just the latest crisis layering on top of all the others.” From the climate emergency to growing inequality, nonprofits are holding the line on every major challenge facing our communities.

Nonprofits on the frontline are deeply feeling the compounding pressures. Vancouver Foundation received more than 1,200 applications for its new Transforming Systems Grants program, triple the usual number and a red flag for escalating need.

“We need to keep centering those made most vulnerable by systemic inequity,” Beyene said. After all, it’s those most marginalized, such as BIPOC (Black, Indigenous, People of Colour) communities who are hit the hardest, she observed.

Staff burnout, talent loss

Nonprofits are seeing a sharp rise in staff burnout, as they’re pressured to continue doing their job with diminishing resources. In the same Carleton study, 41% of nonprofit workers named burnout as the top reason for leaving, a sign that the sector’s future is increasingly precarious.

More specifically, Beyene warned, there’s an alarming leadership crisis brewing in the sector. She’s noticed unprecedented numbers of executive directors in her network — none of whom are near retirement — stepping down with no intention to return. And though new leaders from diverse backgrounds emerge to fill the vacuum, they’re often set up to fail in these under-resourced environments.

Stabilizing forces in uncertainty

As nonprofits hang on, funders have a critical role to play as the sector’s stabilizing force. “We’ve been saving for a rainy day, and that day is today,” said Beyene.

Vancouver Foundation is releasing more funding to meet the moment, including the Sustaining Resilience Grants which gave a boost to charities facing acute hardship. Vancouver Foundation’s team of grantmakers and expert community advisors does the legwork to identify those eligible and in need within its vast network of nonprofits and charities.

The focus is on restoring basic functions that often go overlooked, like staffing, legal supports, and financial governance. “We can’t do our job well unless these backbone functions are solid,” Beyene emphasized.

It’s an all-hands-on-deck moment. In addition to its new grant programs, Vancouver Foundation has implemented a new policy that enables half of estate gifts to go out into the community right away. This applies only to new estate gifts that come free from donor instructions.

“There’s more to do, and we want to move quickly, but thoughtfully. That’s the tension,” Beyene said. Vancouver Foundation is also exploring how it can collaborate with like-minded funders to ease the burden on grant-seekers.

Private funding can’t fill the gap

Beyene warned that the private sector won’t be able to fully bridge the gap left by government grants. Many nonprofits primarily, or even entirely, rely on public funding to operate, such as those offering immigrant and refugee settlement services.

In 2022 and 2023, the Province earmarked $90 million in funding for nonprofits, which Vancouver Foundation distributed to community in full through province-wide grant programs. These years ended up being record highs for Vancouver Foundation’s grant programs. Unfortunately, there’s no sign that this funding will be renewed for the foreseeable future.

“We’re doing what we can. We don’t have all the answers yet. But the urgency is real, and the stakes are high,” said Beyene.

Nonprofits need steady supporters

Economic hardship has hit nonprofits hard. It’s hit everyday people hard too, causing giving to decline. But how you give matters just as much as how much you give. Charities need stability and flexibility. Steady gifts, no matter how small, that come with no restrictions on how they’re spent, allow nonprofits to plan more effectively.

“It keeps the doors open. It makes sure that our level of excellence is where it should be,” said Rod Santiago, the CEO of Archway Community Services, a nonprofit offering a wide range of community programming for residents in Abbotsford and throughout the Fraser Valley. Archway received a multi-year grant without restrictions from Vancouver Foundation’s Lighthouse Organizations Fund to help sustain its operations. With that funding, Archway is able to implement tested ideas, strengthen its governance, and plan for the long-term, all while still delivering critical services at a high standard. “You can’t have great services without great operations,” said Santiago.

Funders like Vancouver Foundation are stepping up where they can. By working alongside the community and steadily funding the operations of nonprofits, we might just help them get through this difficult moment.

This story is featured in our 2025 Vancouver Foundation magazine. Read the magazine to explore other stories of courage, resilience, and generosity.