3.1 Funding and Sectors
FACT: Securing the funds to enable organizations to offer excellent programs and events is frequently at issue for those offering exclusively recreation and leisure-based programs and services. Simply put, there rarely seems enough money for the ‘fun’ stuff. The pervasive theme across the three major sectors – nonprofit, public and private – is “doing more with less”. This is especially evident in the nonprofit and public sectors.
Agencies in the nonprofit sector rely heavily on funds from grants, donors and sponsors to maintain (or expand) existing programs, and to support the creation of new programs. Additionally, the high cost of staff wages often requires nonprofit organizations to engage volunteers rather than paid staff in coaching, instructing, facilitating, and leading recreation programs and events. Although nonprofits might ideally prefer to have paid staff in these positions as a quality control measure, the reality is that relying on the expertise, talents and skills of volunteers is often the only feasible way to go, as this will dramatically offset the cost of wages by reducing the number of hours to be compensated.
Helpful Tip
- Many nonprofit charitable organizations, like Canada’s YMCAs and Boys & Girls Clubs, receive millions of dollars in donations and grants each year.
- This does NOT, however, make them rich!
- Not-for-profits and charities are required to ensure that a certain percentage of the money that comes is funnelled back into the organization to fund programs, capital projects, staff wages, research, staff development, special events, special initiatives and essentials, like heating and electrical expenses.
Agencies in the public sector rely either partially or solely on funding from the Canadian government – frequently municipal, often provincial, occasionally federal, and in rare occasions all three – which can change from year to year depending on what’s trending among community stakeholders and the priorities of the political party/ies in power. Some recreation-based services, like those found in clinical healthcare settings, for example, are often deemed by the government as essential to public health and are therefore prioritized for funding. Other public recreation services, like public parks and swimming pools, are more often deemed non-essential and often face uncertainty when it comes to receiving reliable, sustainable funding.
Agencies in the private sector rely on revenue generated from user fees, memberships, ticket sales and merchandise. As private sector organizations tend to be less reliant on the whims of government, grant-writers or donors to support their programs/services financially, there may be less financial insecurity for recreation or leisure programs run in this sector. That is not to say that staying financially viable is not an issue for private-sector businesses, however. For-profit organizations are under constant demand to ensure their marketing and promotion strategies generate sufficient public interest and participation in their programs/services, thereby securing consistent and steady cash flow into the organization. For many, there is often an additional requirement to create and innovate new programs in response to constituent demands and desires; a tall order for organizations concerned with turning a consistent profit.
Food for Thought
Fact: Every program plan begins with a vision…but ultimately ends with a budget.
Fact: There are only a limited number of dollars to go around, so the need to financially justify your program or event idea, regardless of what sector you are planning for, is critical to receiving funding.
Definitions
Revenue: Money that comes into an organization, business or agency for the provision of goods or services.
Expenses: The cost or money required for the provision of goods of services, often with a view to generating revenue.
Profit: The financial gains or benefits enjoyed by an organization, business or agency after the expenses are paid.
The Magic Equation
Revenue minus (−) Expenses Equals (=) PROFIT
