Canada is home to over 170,000 not-for-profits. Just over half of these are registered charities. The vast majority of them are small – less than 10% of charities have 10 or more full time staff, and 79% of charities have less than $500,000.00 per year in funding.
From the perspective of open data there are two main challenges in the nonprofit sector. First, we have little data on the sector’s labour market and economic impact. Imagine Canada reports that the charitable and nonprofit sector contributes roughly 8% of Canadian GDP in a typical year, which is more than retail and close to the value of the mining, oil and gas sector. Two million Canadians work in the sector and more than 13 million people volunteer with charities and nonprofits. Beyond that, the data from the sector on its makeup and impact is fairly limited.
There have been some notable efforts to change that in recent years. Back in 2015, the Ontario Nonprofit Network released the report Towards a Data Strategy for the Nonprofit Sector, which identifies what they call the key principles that should guide a nonprofit data strategy:
- Effective use: Nonprofits should put data to effective use to serve their communities – not just collect it, but proactively use it.
- Responsible use: Data should be created, collected and accessed responsibly and ethically, with attention to power dynamics that could mar the use of data and with respect to the privacy and safety of those involved.
- For public benefit (not for profit): Nonprofits and governments should be committed and able to access data for public benefit use.
For ONN, the four essential components of a successful data strategy are:
- Skills & Resources
These components are necessary for any data strategy, and the charitable and nonprofit sector are no different.
Powered By Data is an organization funded by MakeWay whose mission is to maximize the availability and impact of data for public good. They’ve done some work publishing data about grants with MakeWay and the Ontario Trillium Foundation which we used in producing this month’s episode. Listen to the podcast to hear our interview with Michael Lenczner and Ben McNamee of Powered By Data.
The Federal Government Open Data portal has a data set listed that consolidates all the Grants and Contributions reports submitted by federal institutions for proactive disclosure. We decided to take a look at the grantees and departments, attempting to remove the subnational governments, in order to characterize NGO and private sector grants.
Here were the top grant recipients for everyone on that list that spans 2005-2020 with a couple of grants also listed from 2004.
The Canada Foundation for Innovation is an arm’s-length agency of the federal government that is responsible for a lot of the investment in technological equipment and facilities. Extranational organizations such as the world food program and world bank are also heavily featured. Interestingly Ryerson University and Norquest college also received a large amount of grants. ESL language training for immigrants looks to be the reason why. SUCCESS is another organization tied to providing new immigrants services. The now famous WE Charity Foundation grants are also listed, even though they were never paid in the end. If you are interested in some of the others on the list or want to know more about these grants, the federal government provides a searchable database for that too.
That’s just the grant amounts. What about the total number of grants? Here’s the top 20 for that:
A lot of educational institutions here. Most of this is related to grants that professors apply to. These are smaller grants but there’s a large number of them.
How about these together? If we take the value of grants and divide by the number of grants we can get an idea where the largest single grants were going to.
What about the value of grants given by each department? If you do that you can get a feeling for the changes in political priorities as time goes on. It’s interesting seeing the intensification of global affairs and immigration related grants in 2017.
Quite a bit of interest in immigration and global programs in 2016 and 2017, but the grant funding did not seem to be sustained. To try and gain an understanding of the nature of the grants that happened during spikes like those, we included a small tool at the site where the data and code for these visualizations is located. You can select the department in question to see a simple line graph of grant value:
And also see a trellised bar chart showing per-year distribution of total grant value and number of grants for various grant sizes.
Looks like that period of investment into immigration and refugee programs was concentrated in a large number of grants valued between one and ten million dollars.
As we mentioned earlier, Powered By Data worked with MakeWay to create a portal that provides data on the grants MakeWay issues. It’s got a nice user interface that you can use to sort, group and summarize their grants interactively, or you can download the information in CSV format for manipulation. We used the CSV to take a closer look and generate a few graphs based on 2020 grant data.
This chart shows the distribution of all grants in Canadian provinces and territories. MakeWay distributed over $4 million in 2020, mostly to charities BC and Ontario. This data was a little bit of extra effort to generate as the charity’s location is not provided in the CSV. We used Google’s geolocation tool to identify the location of the organizations by name, which covered about 95% of the entities identified and manually looked up the rest on the CanadaHelps index of charities.
That’s the raw distribution of money and here is the average size of a grant broken down by province and territory. Larger average grants in Ontario and Newfoundland.
Ontario Trillium Fund Grants
The Ontario Trillium Foundation also has an open data portal, providing information about the grants that they distribute in Ontario. They publish CSV files of their grants since 1999, and a geographic concordance file that maps Trillium catchment areas to Census Districts, which gave us a chance to build a nice digital map showing the per-capita investment in different regions in Ontario. We looked at the distribution of money in 2019, since we felt the oversized allocation of money through Trillium in 2020 might be a bit skewed compared to a more “typical” year.
How Can We Rank Charities?
Every year, Maclean’s publishes a top 100 list of Canada’s “best” charities. Charities included in Maclean’s Top 100 list must:
- Have a Charity Intelligence report updated for the 2016 tax year or more recent
- Have $2 million or more in annual revenue
- Be thought of as charities by most Canadians. For example, universities are registered charities that accept donations, but we exclude them from the ranking.
In 2020, the top charity on the list was the Calgary Food Bank. Maclean’s assesses charities based on the following criteria:
Financial metrics (60 percent)
- Overhead ratio: 15 percent. The proportion of a charity’s annual revenue that goes to administrative costs, awarding more points to leaner charities. The exception is when a charity reports spending less than 2 percent of its revenue on overhead, less than what is considered enough to operate productively.
- Fundraising ratio: 15 percent. Full points go to charities that keep the amount of every donated dollar spent on fundraising under 15 cents, with partial points awarded up to a maximum of 35 cents. Note: Not all charities separate administrative and fundraising spending in their financial statements – in these cases, the percentage of total revenue going to those two types of costs combined is used.
- Charity reserves: 15 percent. More points to charities that keep donor money circulating, with full marks going to those that keep savings accounts under the amount that would be required to fund program expenses for three years.
- Compensation of highest-paid employee: 15 percent. Points are taken from charities that pay their executive directors less than $80,000 a year, regardless of size, or overpay them by more than $100,000 compared to other charities with similar operating costs
Transparency (40 percent)
- Ease of access to financial statements: 10 points. Full points go to charities that publish audited financial statements on their websites covering at least two of the most recent fiscal years.
- Results transparency: 30 points. Points for charities that clearly demonstrate what they are doing with donors’ money.