Report to/Rapport au :

 

Health, Recreation and Social Services Committee

Comité de la santé, des loisirs et des services sociaux

 

and Council / et au Conseil

 

12 January 2006 / le 12 janvier 2006

 

Submitted by/Soumis par:

Steve Kanellakos, Deputy City Manager / Directeur municipal adjoint, Community and Protective Services / Services communautaires et de protection 

 

Contact Person/Personne ressource: Colleen Hendrick, Director / Directrice

Cultural Services and Community Funding / Services culturels et financement communautaire

(613) 580-2424 x24366, colleen.hendrick@ottawa.ca

 

CITY-WIDE

Ref N°: ACS2006-CPS-CSF-0001

 

 

SUBJECT:

Community funding framework POLICY– Phase Two

 

 

OBJET :

CADRE STRATÉGIQUE SUR LE FINANCEMENT COMMUNAUTAIRE: ÉTAPE NO 2

 

REPORT RECOMMENDATIONS

 

That the Health, Recreation and Social Services Committee recommend that Council:

 

1.         Approve the Community Funding Framework Policy outlined in this report.

 

2.         Include an investment of $300,000 for consideration in the annual operating budget submission each year for 10 years, beginning in 2007, with a review after 5 years, resulting in a total cumulative base budget increase of $3M by 2016, to help address identified agency staffing and operating cost budget pressures related to existing programs.

 

3.         Invest unallocated funds on an annual basis, as available, giving first consideration to those organizations not currently receiving renewable funding that have established a track record through 3 year project funding, subject to specific annual priorities. 

 

 

RECOMMANDATIONS DU RAPPORT

 

Que le Comité de la santé, des loisirs et des services sociaux recommande au Conseil :

 

1.         d’approuver le cadre stratégique sur le financement communautaire décrit dans le présent rapport;

 

2.         d’inclure, à partir de 2007, un investissement de 300 000 $ par année pendant dix ans pour examen lors de la soumission du budget de fontionnement annuel, sous réserve d’un réexamen de la situation au bout de cinq ans, afin de régler les problèmes associés à la dotation des organismes et à la budgétisation des coûts d’exploitation liés aux programmes existants, ce qui signifie que le budget de base aura été relevé de 3 millions de dollars en 2016;

 

3.         d’investir annuellement les fonds non attribués, le cas échéant, en accordant la priorité aux organismes qui ne perçoivent pas actuellement de crédits renouvelables mais qui ont déjà fait leurs preuves en menant à bien des projets de financement triennaux, sous réserve des priorités annuelles établies ponctuellement. 

 

 

EXECUTIVE SUMMARY

 

In 2006, the City of Ottawa, through the Community and Protective Services (CPS) Community Funding Division, manages funding contributions totalling $20.4M, including $15.6M for funding to social services, health and recreation organizations, $510,500 for Project Funding and $4.3M for National Child Benefit (NCB) Reinvestment.  Funding contributions were made to 330 programs and projects provided by 200 non-profit organizations through 28.2 million client contacts.  The City's funding represents an average of 9% of the agencies' total budgets*.

 

The core business of the Community Funding Division is to invest in viable non-profit community-based organisations in order to sustain a strong community infrastructure that supports equal access to basics in the area of community services.  Access to Basics references social inclusion and active participation in civic life as well as poverty reduction, and is consistent with the CPS Strategic Plan.

 

The Community Funding Framework provides a comprehensive policy framework governing all mechanisms for funding to external organizations within the Community Funding Division.

 

The City's Audit Report, February 2003, recommended the establishment of a comprehensive corporate policy framework.  A framework responding to the Community Funding mandate only has been developed in two Phases.  Phase One, Community Funding Review, September 2004 responded to the Audit recommendations by focusing on administrative and management practices (Coflin Associates).  Phase One introduced harmonization of the amount and type of information required from legacy funding programs (pre-amalgamation) by introducing a single, consistent, enhanced Funding Submission within the Community Funding Program.

 

Phase Two, Community Funding Framework Policy, responds to the Coflin and Audit recommendations by:

·        Reflecting the priorities of Council by ensuring the Community Funding Program's ongoing alignment with the Community and Protective Services (CPS) Strategic Plan, approved by Council September 28, 2005

·        Introducing service agreements that are renewable subject to review, thereby ensuring sufficient flexibility in the Community Funding program to make ongoing alignment with the Strategic Plan feasible

 

The Community Funding Framework Policy and the recommendations in this report respond to the challenges facing the non-profit sector, as identified in Funding Matters, September 2003, and as heard in consultations with the community, by:

 

·        Decreasing budget pressures on agencies over time until the overall sector is stabilized by committing a base budget increase of $300,000 each year for 10 years

·        Clarifying the purpose and priorities of the Community Funding Program

·        Providing groups that do not currently receive renewable funding contributions with potential access to this funding envelope by investing unallocated funds to organizations with established  track records in the project funding envelope

·        Increasing funding stability by moving to three-year service agreements

·        Increasing organizational stability by establishing that core operational costs as well as specific program costs may be considered for funding

·        Introducing multi-year Project Funding to increase flexibility for start-up and completion of projects; and to increase opportunity for emerging groups to establish a track record.

·        Streamlining reporting processes to reduce the administrative burden on agencies

 

A summary of recommendations from these guiding reports with comments on the Community Funding Framework response to each recommendation appears in Document 1.

 

The Community Funding Framework's focus is on enhancing accountability for Community Funding contributions, improving sustainability of community organizations and establishing funding priorities as well as developing tools and procedures to support funding processes. 

 

Where existing organizations and programs do not meet the funding priorities, organizations will, in all cases, be realigned to more appropriate City funding streams or Community Funding staff will work with organizations to ensure their services are realigned to better fit with Community Funding priorities.  No organizations will lose funding as a result of this policy framework.  However, organizations that stay within the Community Funding envelope must continuously align with community funding priorities to retain funding contributions over time.

 

 

RÉSUMÉ

 

En 2006, la Ville d’Ottawa gérera, par l’entremise de la Division du financement communautaire de Services communautaires et de protection (SCP), 20,4 millions de dollars en financement communautaire : 15,6 millions serviront à financer des organismes de services sociaux, de santé et de loisirs, 511 000 $ iront à des projets communautaires et 4,3 millions seront consacrés au réinvestissement de la Prestation nationale pour enfants (PNE). Des crédits de financement ont été versés à 330 programmes et projets offerts par 200 organismes sans but lucratif par l’entremise de 28,2 millions de contacts avec la clientèle. Les crédits octroyés par la Ville représentent environ 9 p. 100 du budget total des organismes*.

 

La Division du financement communautaire vise avant tout à investir dans des organismes communautaires sans but lucratif viables afin de maintenir une infrastructure forte qui favorise l’accès égal aux services communautaires essentiels. L’accès aux services essentiels comprend l’inclusion sociale et la participation active à la vie urbaine ainsi que la réduction de la pauvreté, conformément au Plan stratégique de SCP.

 

Il est maintenant proposé d’adopter en matière de financement communautaire un cadre stratégique clair et exhaustif qui régira l’ensemble des mécanismes de financement des organismes externes au sein de la Division du financement communautaire.

 

En février 2003, un rapport de vérification de la Ville recommandait l’établissement d’un cadre stratégique municipal exhaustif. Un cadre axé exclusivement sur le mandat de financement communautaire a été mis au point en deux étapes. Tout d’abord, à la demande de la Ville, la société Coflin Associates a réalisé en septembre 2004 un examen du financement communautaire dans lequel elle a répondu aux recommandations du rapport de vérification en dirigeant son attention sur les pratiques administratives et de gestion. Cette première étape a donné lieu à une harmonisation du volume et du type de renseignements requis pour les programmes de financement existants – ceux des anciennes municipalités – en proposant un modèle unique pour la soumission de demandes de financement dans le cadre du Programme de financement de projets communautaires.

 

La deuxième étape de la mise sur pied du cadre stratégique sur le financement communautaire répond aux recommandations du rapport de vérification de Coflin Associates:

 

·        en proposant une politique de financement officielle qui précise l’intention et les objectifs du cadre, les critères d’admissibilité, les priorités en matière de financement, les critères d’évaluation des risques et les mécanismes de financement du Programme de financement de projets communautaires;

·        en concluant des ententes de services qui soient renouvelables sous réserve d’un examen, de sorte que le Programme de financement communautaire soit suffisamment souple pour pouvoir être harmonisé avec le Plan stratégique;

·        en prévoyant une évaluation des risques qui touche tous les aspects des risques recensés dans le rapport Coflin.

 

Le cadre stratégique sur le financement communautaire et les recommandations que renferme le présent rapport proposent des solutions aux défis que doit surmonter le secteur des organismes sans but lucratif, lesquels ont été définis au cours de séances de consultation avec la communauté et sont décrits dans l’édition de septembre 2003 de Le financement, ça compte ::

 

·        réduire petit à petit les pressions budgétaires qui s’exercent sur les organismes jusqu’à ce que ce secteur soit stabilisé et, à cette fin, augmenter le budget de base qui lui est consacré de 300 000 $ chaque année pendant dix ans;

·        préciser l’objet et les priorités du Programme de financement communautaire;

·        offrir aux groupes qui ne bénéficient pas à l’heure actuelle de fonds renouvelables la possibilité d’avoir accès à cette enveloppe budgétaire en investissant les crédits non attribués aux organismes qui ont fait leurs preuves;

·        augmenter la stabilité du financement grâce à des ententes de services conclues sur trois ans;

·        accroître la stabilité des organismes en rendant les coûts opérationnels de base et les coûts relatifs à chaque programme admissibles au financement;

·        permettre le financement pluriannuel de projets communautaires afin d’augmenter la souplesse du financement pour le lancement et la réalisation des projets et accroître les possibilités données aux nouveaux groupes de faire leurs preuves;

·        rationaliser le processus de reddition de comptes afin de réduire le fardeau administratif des organismes.

 

Le Document 1 fait la synthèse des recommandations que renferment ces rapports d’orientation et présente des observations sur la réponse donnée par les responsables du cadre stratégique à chaque recommandation.

 

Le cadre stratégique sur le financement communautaire vise principalement à accroître la reddition de comptes à l’égard des crédits versés au titre du financement communautaire, à améliorer la stabilité des organismes communautaires, à établir des priorités de financement et à concevoir des outils et des procédures à l’appui du processus de financement. 

 

Les organismes et programmes existants qui ne satisfont pas aux priorités de financement seront, dans tous les cas, orientés vers d’autres voies de financement municipales mieux adaptées à leurs besoins ou collaboreront avec le personnel de Financement communautaire pour que leurs services correspondent davantage aux priorités établies par la Division du financement communautaire.  Ce cadre stratégique ne fera perdre à aucun organisme sa source de financement. Les organismes qui continueront de bénéficier des enveloppes budgétaires allouées au financement communautaire devront s’adapter continuellement aux priorités établies pour continuer de toucher des crédits.

 

 

BACKGROUND

 

Enhancing Corporate Accountability

 

The City's Audit Report, February 2003, recommended the establishment of a comprehensive corporate policy framework governing all mechanisms for funding to external organizations.  The Community Funding Framework has been developed in two Phases based on the recommendations of the Coflin report.  Phase One, Community Funding Review, September 2004, responded to the Audit recommendations by focusing on administrative and management practices.  This resulted in additional reporting requirements being included in annual Funding Submissions from community groups to the Community Funding Division.  Phase One introduced harmonization of the amount and type of information required from legacy funding programs (pre-amalgamation) by introducing a single, consistent Funding Submission within the City of Ottawa's Community Funding Program.  The new Funding Submission captures increased and essential agency information with clear reporting requirements and outcomes.

 

Phase Two further refines the Funding Submission by adapting the submission and reporting requirements for agencies commensurate with amount of contribution (in 2005, under $25,000) as well as for organizations run entirely by volunteers or organizations receiving funding contributions for the sole purpose of facility management.  Reporting requirements are also streamlined for organizations in year one and two of 3-year Service Agreements. 

 

Phase Two introduces Risk Assessments, Service Agreements, Eligibility Criteria, Funding Priorities, and Review, Allocation and Appeals Processes.  The introduction of Risk Assessments assesses all aspects of risk identified by the Coflin report.  The introduction of service agreements that are renewable subject to review ensures sufficient flexibility in the Community Funding program to make ongoing alignment with the CPS Strategic Plan feasible.

 

Role of the Non-Profit and Voluntary Sector

 

The non-profit and voluntary sector is defined as a sector of self-governing organizations that exist to serve the public benefit, generate social capital, do not distribute private profit to members, depend to a meaningful degree on volunteers and are independent from the formal structures of government and the profit sector (Voluntary Sector Initiative, May 2001).

 

The non-profit and voluntary sector plays a key role in the community by:

 

·        Addressing needs and issues of the most marginalized members of the community;

·        Promoting active citizenship and building bridges among communities and cultures;

·        Attracting financial investment and talent; and

 

The investment of City funding contributions in this sector is an important way that the City helps with the development of the City's most important asset:  the citizens of Ottawa.  It enables organizations to create a solid base to deliver services that play a critical role in addressing the needs and issues of the most marginalized members of the community.  They engage individuals and neighbourhoods and thus contribute to ensuring the highest possible quality of life for all members of the community. This investment reduces poverty, improves health status and reduces barriers to participation in recreational activities.

 

The City invests in targeted programs and services such as food programs, supporting recreation through local community associations, providing a safe place for vulnerable people, providing programs for children, youth and seniors and supporting individuals and families in crisis.  The City also invests in a coalition of Community Health and Resource Centres to provide city-wide coordination of services that helps ensure effective use of resources, and community development, to help communities identify resources to build on their strengths and improve self-sufficiency.

 

The non-profit sector helps the City, and the community as a whole, further its larger social and economic development goals such as strengthening individuals, families and neighbourhoods, improving service planning and coordination, supporting community volunteers*, leveraging funding from other levels of government, foundations and the private sector, contributing to the local economy by providing a range of employment opportunities and helping the community remain viable and attractive to financial investment and talent based on Ottawa having - and being seen to have - a high quality of life.

 

Current Situation and Challenges Facing the Non-Profit and Voluntary Sector

 

There are several key challenges facing the non-profit sector that emerged from the literature review and community consultation.  These include:

 

1.      Organizations are struggling with financial instability because of increased unpredictability of funding, inability to offer competitive wages and benefits and limitations on what costs can be covered;

2.      New groups and equity-seeking groups responding to the specific needs of newcomers, visible minorities, aboriginal people as well as to the needs of francophones, women and emerging issues are seeking equitable ways of accessing City funding contributions;

3.      The current one-year limit on project funding may not be realistic for all projects (e.g. insufficient time to start-up and report on outcomes depending on the nature of the project);

4.      Reporting requirements need to be streamlined (for example, currently all organizations must comply with similar reporting requirements regardless of the amount of funding contribution received).

 

Recent national and local reports describe the financial instability and resulting struggle with high rates of turnover and burnout that the non-profit sector is currently facing.  The reports Funding Matters:  The Impact of Canada's New Funding Regime on Non-profit and Voluntary Organizations[1] and Funding our Future:  A Community Consultation on the Voluntary Sector in Ottawa[2] document the reluctance on the part of funders to recognize and fund administrative or core organizational costs, such as rent, utilities, staff and volunteer training and supervision, multi-year planning and financial management.  The preferred model of funding in recent years is project-based, for shorter periods of time and increasingly unpredictable. The resulting financial instability of organizations undermines the viability of programs.  Organizations struggle with high rates of staff turnover and burnout due to the inability to offer permanent positions and/or competitive wages and benefits.

 

Organizations have made the case for allowing expenditures for core operational costs and for the introduction of multi-year funding agreements.  They have made the case for stabilizing the overall sector by increasing City contributions directed to staffing and operating costs.  These solutions enhance organizations' stability and their capacity to retain staff, to apply enhanced accountability standards and procedures and to undertake longer-term planning.  Organizations have also made the case for having a clear way for new groups to have access to funding contributions and for more flexibility in length of projects eligible for Project Funding.

 

The Community Funding Framework Policy and the recommendations in this report respond to the challenges facing the non-profit sector, as heard in consultations with the community, by:

 

1.      Decreasing budget pressures on agencies over time until the overall sector is stabilized by committing a base budget increase of $300,000 each year for 10 years, beginning in 2007, with a review after 5 years, resulting in a total cumulative base budget increase of $3M by 2016, to address staffing and operating costs related to existing programs;

2.      Clarifying the purpose and priorities of the Community Funding Program, including Renewable Funding and Project Funding Envelopes; 

3.      Providing groups that do not currently receive renewable funding contributions with potential access to renewable funding by investing unallocated funds on an annual basis, as available, giving first consideration to those organizations that have established a track record through 3 year Project Funding, subject to specific annual priorities;

4.      Increasing funding stability by moving from year-to-year funding to three-year service agreements based on risk assessment;

5.      Increasing organizational stability by establishing that core operational costs as well as specific program costs may be considered for inclusion in Community Funding Service Agreements and Project Funding Terms and Conditions;

6.      Introducing one and three year Project Funding, with possibility to receive funding for one-year projects for a second year, to increase flexibility for start-up and completion of projects and to increase opportunity for emerging groups to establish a track record.  Three-year project funding will be limited to organizations not currently receiving renewable funding contributions; and

7.      Streamlining the reporting process to reduce the administrative burden on agencies receiving less than $25,000 (2006), or organizations run entirely by volunteers or organizations receiving funding contributions for the sole purpose of facility management.  Streamlining interim annual reporting requirements for organizations with 3-year service agreements.

 

This report also addresses the role of Parks and Recreation Branch related to Community Associations and recreation programs and the mandate and priorities of the National Child Reinvestment Program.

 

 

DISCUSSION

 

Community Funding Framework

 

Sustainability and Agency Budget Pressures:

 

The issues facing the non-profit sector cannot be addressed by the City alone.  The City of Ottawa has joined with other local funders, including Services Canada (regional offices), United Way, Community Foundation, Trillium (provincial) and the private sector to create a local Grantmakers Forum.  The purpose of the forum is to explore opportunities and identify strategies to increase collaboration and partnerships among local funders in order to leverage funds in the community and make funding processes as user-friendly and coherent as possible for agencies.

 

In November 2005, the Social Planning Council and the City of Ottawa collaborated on a small survey to gather a picture of salary and benefit pressures in Ottawa's community organizations.  Seventy-nine valid surveys from diverse community agencies were analyzed.  The findings of the survey indicate that the community agency sector in Ottawa is experiencing serious labour force challenges which, in many cases, negatively affect service to the community.  The survey reveals a heavy reliance on part time staff.  Less than 45% of the workforce in responding agencies was full-time. 50% of responding agencies indicated having difficulty attracting appropriately qualified staff, citing low wages and benefits and instability of the positions due to short term funding.  Over 40% of responding agencies reported having difficulty retaining staff due to too many part-time positions and uncompetitive salaries and benefits.  70% felt salary pressures had impacted on service delivery, specifically through interruptions in services due to high staff turn-over, termination or reduction of programs due to reduced or inadequate funding, time taken from programming to fundraise to cover staffing and benefit shortfalls and fewer clients serviced because of downgrading from full to part-time jobs and delaying of hirings.

 

The City is committed to demonstrating leadership on the important issue of sustainability.  The 2006 Funding Submissions identified $3.8M in budget pressures facing 117 community agencies.  Of this 65% related to staffing costs, 12% for occupancy costs and the remainder for office administration, program and other expenses.  The majority of budget pressures relate to existing rather than new programs. 

 

In 2005 and 2006, agency budget pressures were considered through the City's budget process and approximately $300,000 was committed to the base budget for each of those years.  Based on the information gathered through the 2006 Funding Submissions, the Salary Pressures Survey and community consultations, the City has concluded there is a need for a commitment to an annual increase to the base budget of approximately 10% of the identified budget pressures each year for 10 years to help stabilize the non-profit sector.

 

This report recommends a base budget increase to the renewable funding envelope of $300,000 each year for 10 years, beginning in 2007 (with a review after 5 years) to address sustainability issues.  Funds will be directed to agency staffing and operating costs related to existing programs.  This would result in a cumulative total of $3M added to the base budget by 2016.  The purpose of this new money will be to decrease budget pressures on agencies over time and build up the overall sector to achieve greater stability.  Staff will report back with a separate strategy to manage pressures related to growth.

 

Annual cost of living increases to agency budgets are in addition to the commitment of funds to stabilize agencies and will continue to be considered through the City's annual budget process.

 

Community Funding Core Business:

 

The core business of the Community Funding Program is to invest in viable non-profit community-based organizations in order to sustain a strong social infrastructure of community services that supports equal Access to Basics in the area of community services.  Access to Basics references social inclusion and active participation in civic life as well as poverty reduction, and is consistent with the Community and Protective Services (CPS) Strategic Directions as described in the CPS Strategic Plan.

 


Community and Protective Services Strategic Plan:

 

The Community and Protective Services Department (CPS) aims to make a difference in the community. In order to have the most impact on residents and on our communities, Community and Protective Services has developed a focused plan that follows many of the 20/20 guiding principles and strategic directions as identified in the Human Services and Arts and Heritage Plans.  In turn, the principles and strategic directions identified in the CPS Strategic Plan inform and guide the goals and priorities of the Community Funding Program.

 

CPS Guiding principles

o       A caring and inclusive City

o       A responsible and responsive City

o       A green and environmentally sensitive City

o       A City of distinct liveable communities

o       A healthy and active City

o       An innovative City where prosperity is shared among all

o       A creative City rich in heritage, unique in identity

 

CPS Strategic Directions

o       Have equal access to services

o       Have access to the basics

o       Enjoy safe and healthy surroundings

o       Adopt a prevention first approach

o       Access employment and lifelong learning

o       Experience a rich culture

 

CPS Service Delivery Approaches

o       Build collaborative communities

o       Focus on prevention

o       Focus on continuous service improvement

 

 

Community Funding Program Goals and Priorities:

 

Community Funding has been provided to non-profit community organizations providing health, recreation and social services.  The current Community Funding Program consists of a legacy of a range of programs and services from a number of former municipalities and regional government.  Funding contributions total $15.6M, not including Project Funding and NCB Reinvestment Fund (Document 2).  Generally, programs were funded on a year-to-year basis as needs arose but were not tied to the City's long-term or strategic planning processes.  Some of the former Regional Social Services programs had purchase of service agreements.  There has been limited turnover of agencies and in recent years, due to fiscal restraints, limited opportunity for new or emerging groups to be included in the funding program.

 

The City has built on the CPS Strategic Plan as well as the Basic Needs Strategy, March 2005 and the People's Hearings II Report, September 2005 to define the strategic priority of Access to Basics for the purpose of the Community Funding Program.

 

The goals of the Community Funding Program are to support, through viable non-profit community-based organizations, the provision of community services and programs that increase Access to Basics by:

 

·        Supporting inclusion of people who are low-income, at risk, isolated or otherwise marginalized

·        Promoting quality of life for the full diversity of citizens

 

A key priority is improving Access to Basics for people who face barriers to participation or to access to services, reducing poverty and increasing self-sufficiency. The focus on improving access to basics for people who face barriers reflects the equity and diversity statement included in the City Corporate Plan.

 

A second key priority is including all citizens in community life and active participation.  Community Associations and other recreation programs play a unique and valued role in addressing Access to Basics for the general population, particularly in rural areas.  Recreation is an integral part of community services.  Research such as the Gina Browne study When the Bough Breaks (McMaster University) demonstrates that reaching out to provide opportunities for involvement in recreation for families, children and youth reduces social costs in the long run.

 

Within the overall priority of Access to Basics, specific annual funding priorities will be set based on the CPS Strategic Plan and emerging needs identified by the Community Funding Division.

 

Where existing organizations and programs do not meet the funding priorities, organizations will, in all cases, be realigned to more appropriate City funding streams or Community Funding staff will work with organizations to ensure their services are realigned to better fit with Community Funding priorities.  No organizations will lose funding as a result of this policy framework.  However, organizations that stay within the Community Funding envelope must continuously align with community funding priorities to retain funding contributions over time.

 

The CPS service philosophy is "How Can We Help?"  In this spirit, the City, through its Community Funding Division, invests in a network of non-profit groups that has the experience and expertise to reach out to include those with barriers and is responsive to both rural and urban communities, recognizing that one size does not fit all.

 

Funding Envelopes:

 

The Community Funding Program comprises two funding envelopes:  1) Renewable Funding Envelope, and 2) Project Funding Envelope.  Each of the funding envelopes is described below.

 

1.      Renewable Funding Envelope

 

The renewable funding envelope will provide one and three-year funding contributions through negotiated Community Funding Service Agreements, based on risk assessment.  The introduction of three-year funding agreements provides agencies with the ability to undertake long-term planning based on a three-year commitment of funding.  At the same time, the introduction of a specific timeframe to funding contributions, followed by a review process, introduces a formal process for the City to ensure ongoing alignment of the Community Funding program with Council priorities.

 

There will be formal recognition that both core operational and/or program specific expenditures can be considered. Funding contributions to core operational costs are expected to increase organizational stability.  It is recognized that without adequate funding for core operational costs, programs and services are at risk.  Core operational costs are defined as direct costs to run programs including staffing, volunteer coordination, staff training, outreach, community development, marketing and promotions, evaluation, planning and ongoing development, transportation costs related to programs and expenses such as electricity, heat, gas, insurance, rent and supplies. 

 

The length of the service agreement (one or three years) will be determined through Risk Assessment criteria.  Agencies that have a lower score on the Risk Assessment criteria may still receive funding, but will be deemed a higher risk and therefore will enter into a one-year service agreement.  City staff will monitor and support community groups to make progress on identified areas that need improvement.

 

Funding contributions are renewable but renewal will depend on the results of a review that will be held in the final year of the service agreement term.  Renewal is not automatic.  Funding will be aligned on an ongoing basis with the funding priority of Access to Basics, with a primary focus on people with barriers to participation and access to services, and with the CPS Strategic Plan.

 

Unallocated funds will be invested on an annual basis, as available, giving first consideration to those organizations that have established a track record through 3 year Project Funding.  Organizations will be considered for up to 2 years following completion of their 3-year project. 

 

The Renewable Funding Envelope includes an emergency fund limited to $50,000 annually (2006 dollars) to address extraordinary, unexpected contingencies that may arise. The availability of emergency funding is limited to organizations receiving renewable funding to address emergency needs affecting directly their ability to deliver services.

 

2.      Project Funding Envelope:

 

The Project Funding Envelope provides contributions totalling $511,000 (2006) annually to respond to new and emerging needs and build the capacity of organizations.  Contributions are non-renewable, however, one or three year City project funding contributions will be considered.  While many projects are viable within a one-year timeframe, the new policy also allows for projects that require a longer investment in time and resources by allowing for the possibility that one-year projects may  receive funding for a second year.  Through 3-year project funding, the policy allows groups/agencies to establish a track record, leading to easier access to other funding.

 

It is important to note that commitment to longer-term projects reduces the amount of money available for allocation in subsequent years until the longer-term project is complete.  For this reason, the City heard through consultations that the community supported the introduction of the one, two and three-year timeframes but also supported limiting the amount of funding available for longer-term projects.

 

Community Funding will limit three-year project funding annually to one or two groups that are not currently receiving renewable funding contributions in order to give new groups an opportunity to build their capacity and/or to demonstrate their impact on an emerging need.  At the end of the three-year project, organizations will be able to be considered for unallocated renewable funding.  As well, the community group would be in a position to apply for alternate funding from sources other than the City.

 

Related Issues:

 

Recreation and Community Associations

 

The Parks and Recreation Branch will negotiate Community Funding Service Agreements with 31 community associations and Community Funding will administer the funds. There will be streamlined reporting requirements for community associations that receive funding contributions for the sole purpose of facility management and/or are run entirely by volunteers and/or are receiving funding contributions of less than $25,000 (2006).

 

Currently $1.6M of renewable funding is invested in a range of recreation and leisure programs, including community associations.   The Parks and Recreation Branch will determine future allocations or re-allocations within this dedicated area of the renewable funding envelope.

 

National Child Benefit Reinvestment

 

Launched in 1998, the National Child Benefit (NCB) is a Federal/Provincial initiative with the objective of preventing and reducing the depth of child poverty, promoting attachment to the labour market and reducing administrative overlap and duplication.   The City of Ottawa's role in

 

 

the NCB program is to manage an NCB Reinvestment Fund.  The Fund totals $4.3M and is invested in three priority areas:  Building Community Capacity to strengthen families and meet the developmental needs of children and youth, Child Care and Employment Supports (Document 2).

 

The Province froze the level of the NCB Reinvestment Fund for one year beginning in June 2004, and extended the freeze for another year beginning in June 2005, pending the outcome of a review of the program.  When the provincial policy review is completed and the province makes an announcement with respect to the future direction of the program, CPS staff will formulate a plan, including a mitigation strategy if required, and bring it forward to Health, Recreation and Social Services Committee for consideration and approval.  Municipalities are working through associations such as the Association of Municipalities of Ontario (AMO) and Ontario Municipal Social Services Association (OMSSA) to bring municipal concerns to the policy debate during the review period.  These concerns include adequacy of income support for low-income families and continuing support for community programs now receiving funding contributions through the NCB Reinvestment Fund.

 

Community Funding Framework Implementation Plan

 

The proposed implementation plan is as follows:

·        Report to Health, Recreation and Social Services Committee on January 19, 2006; Council on February 8, 2006.

·        Refinement of tools and processes with anticipated date of completion April 30th, 2006.

·        Implementation of Risk Assessment for one third of agencies in 2006, pending review and approval of Risk Assessment by Legal Services.

·        Implementation of Service Agreements to same one third of agencies in 2006.

·        Launch of 2006 Project Funding Program in March/April 2006

·        Allocations process for 2006 Project Funding Program in May/June 2006

·        Implement discussion of feasibility of joint electronic application system with United Way in 2006.

·        Software upgrade targeted for 2007.

 

 

CONSULTATION

 

The document Funding our Future:  A Community Consultation on the Voluntary Sector in Ottawa, November 2004 was reviewed as well as other relevant literature.  Small focus group sessions and key informant interviews were held with community agencies, funders, City staff and subject matter experts in May and June 2005.  Community consultations in French and English were held in September 2005 with 120 participants and representatives of community agencies in attendance.  A separate consultation session was held in September 2005 specifically for Advisory Committees.  The following Advisory Committees were invited to send two representatives to this meeting:  Poverty Issues, Health and Social Services, Seniors, Parks and Recreation, Arts and Heritage, French Language Services, Equity and Diversity and Accessibility Advisory Committees.    Eleven individuals registered for the meeting, including representatives from PIAC, Seniors Advisory Committee, Parks and Recreation Advisory Committee, French Language Services Advisory Committee, Equity and Diversity Advisory Committee and the Accessibility Advisory Committee. 

 

 

FINANCIAL IMPLICATIONS

 

Approval of recommendation 2 of this report includes a base budget pressure of $300,000 each year for 10 years, beginning in 2007.  Inclusion of the pressure will be subject to review annually during budget deliberations.

 

 

SUPPORTING DOCUMENTATION

 

Document 1 – Summary of Recommendations from Guiding Documents

Document 2 – Community Funding Budget Summary

Document 3 – Funding Eligibility Criteria

 

 

DISPOSITION

 

Following Council approval of the Community Funding Framework Policy, the Community Funding Division will begin implementation of the policy in 2006.


 

Document 1

COMMUNITY FUNDING FRAMEWORK

Summary of Recommendations from Guiding Reports/ Draft

 

J. Coflin & Associates’ Recommendations

 

Recommendations Phase 2

Policy Development and Process Refinements

Addressed

(Y or N)

Comments

1.        That, at the earliest opportunity, the City adopt a basic policy framework for sustaining contributions, one modelled on the frameworks established for the community projects and for arts and heritage funding programs. The framework may include specialized policies, eligibility criteria and reporting requirements for individual categories of program/service (e.g., Neighbourhood Recreational Services, General Counselling and Support Services, Seniors Support Services, etc.)

Yes

The policy framework will be presented to HRSS and Council in January 2006.

The Community Funding Service Agreements are based on the Arts and Heritage Service Agreements adapted for Community Funding.

Reporting requirements are streamlined for organizations receiving funding contributions of less than $25,000 (2005), organizations run entirely by volunteers and organizations receiving funding contributions for the sole purpose of facility management.

2.        That the City of Ottawa implement a procedure, modelled on policies adopted by the Arts and Heritage Organizations Operating Funding Program, whereby organizations and/or programs assessed as being low-risk according to criteria established during the policy review be subject to a full application and assessment every three years, subject to the satisfaction of annual interim reporting requirements. 

That the implementation of the triennial review policy be staggered to establish, over three years, a rotating review schedule to evenly distribute the workload of agency reviews over time. Implementation of the triennial review over the 3 year period would be as follows: one third of the agencies that are assessed as low-risk during the review of their applications for 2006 funding would be scheduled for a full review for 2009 funding, a third would be scheduled for 2008 and the balance for 2007

The determination of the level of risk would be based on an evaluation of factors such as:

·          The organization’s financial performance (deficits, unrestricted reserves, observations contained in audits or management letters from auditors);

·          Demonstrated capacity to deliver services of an acceptable quality;

·          Evidence that the organization’s program or services address a continuing need and reflect a priority of the City of Ottawa;

·          Complaints from the public; and

·          The organization’s governance, accountability and management structures.

Yes

The Community Funding Framework Policy establishes one and three year service agreements based on risk assessment for organizations receiving renewable funding.  All organizations will be subject to full review in the final year of their contract as well as subject to the satisfaction of annual interim reporting requirements for those with 3-year agreements.  A rotating review schedule for organizations receiving renewable funding will be staggered to reduce administrative burden.

 

The risk assessment criteria relate to the following:

·         Financial capacity and performance/level of funding

·         Operational/program capacity

·         Demonstrated ability to address identified needs

·         Plan to address and resolve any outstanding issues or complaints

·         Governance capacity, accountability and management structures

·         Number of years in operation

·         Collaboration with other related service providers and establishment of links and partnerships

 

Risk assessment criteria is streamlined for organizations also eligible for streamlined reporting requirements (see above).

The framework policy will be implemented beginning in 2006.

3.        That any recipient of sustaining funding assessed as presenting a risk based on previous performance, the innovative nature of their services they provide, or other factors, be subject to annual reviews until the level of risk is reduced.

Yes

Organizations that have a lower score on the Risk Assessment may still receive funding, but will be deemed a higher risk and therefore will enter into a one-year service agreement.  City staff will monitor and support community groups to make progress on identified areas that need improvement.

4.        That the City establish standard conditions for sustaining funding that would be accepted by the applicant at the time that the application is submitted.

Yes

The terms of conditions will be included in the Community Funding Service Agreement.

5.        That the City retain the right to specify additional or special conditions to address issues identified in the assessment of the organization’s application and that these conditions be set out in an appropriate letter of understanding signed by both parties before any funding is released.

Yes

The Community Funding Framework introduces a Service Agreement for renewable funding and Terms and Conditions for Project Funding that will be signed by both parties before any funding is released.

6.        That organizations entering into multi-year sustaining funding arrangements be required to submit annual interim reports consisting of a copy of their most recent audited or independently reviewed financial statement, a copy of their most recent annual report, a copy of the minutes of their most recent annual general meeting, a financial statement for the year to date, a budget for the coming year and a program performance report.

Yes

Phase One of the Community Funding Review introduced a single, consistent, enhanced Funding Submission within the Community Funding Program.

Phase Two introduces interim reporting requirements for organizations with one and 3-year agreements and streamlined reporting requirements for organizations identified above.

 

Audit of the corporate grants and funding programs – Corporate policy and management framework Report’s recommendations

 

That management establish a clear and comprehensive corporate policy framework governing all mechanisms for funding to external organizations, to ensure:

 

Recommendations

Addressed

(Y or N)

Comments

1.        An appropriate control environment exists for funding programs

Yes

This is addressed in the Policy/Framework

2.        Corporate consistency in the use of funding mechanisms

Yes

Ongoing discussion and review

3.        Clear roles and responsibilities are established across the City administration

Yes

The Community Funding Framework establishes the role and responsibility of Community Funding Division, Director, Cultural Services and Community Funding and Council with regard to community funding.

4.        Clear direction and guidance is provided to departments in establishing, managing and monitoring these programs

N/A

N/A

5.        The timely, accurate and complete capture of all related information

Yes

Funding Submissions and Community Funding Service Agreements will ensure timely, accurate and complete capture of relevant information.

6.        The identification and resolution of any systemic problems

Ongoing

Continuous improvement will be supported by the database software upgrade targeted for 2007.

7.        That funding allocations accurately reflect Council priorities

Yes

There will be ongoing alignment of annual funding priorities with the CPS Strategic Plan approved by Council. 

 

 

FUNDING MATTERS:

The Impact of Canada’s New Funding Regime on Non-profit and Voluntary Organizations

 

The purpose of the study was to identify current sources and mechanisms of funding for non-profit and voluntary sector organizations and to explore the differential impacts affecting sustainability.

 

The study found that on the funding side:

Addressed

(Y or N)

Comments

1.        There has been a marked shift away from a core funding model, which funds organizations to pursue their mission. The new model is project-based and is characterized by contracts that give funders increased control over what the organization does and how it does it.  Funders are reluctant to fund administrative costs that cannot be directly tied to a project or a program.

Yes

The Community Funding Framework Policy increases organizational stability by establishing that core operational costs as well as specific program costs may be considered for inclusion in service agreements.  Core operational costs are defined in the policy document.

2.        Funding is being provided for shorter periods of time, and is increasingly unpredictable.

Yes

The Community Funding Framework Policy increases funding stability by moving from year-to-year funding to one or three year service agreements based on risk assessment.

3.        Reporting requirements have increased.

Yes

The Community Funding Framework Policy streamlines the reporting process to reduce the administrative burden on agencies receiving less than $25,000 (2005 dollars), or organizations run entirely by volunteers or organizations receiving funding contributions for the sole purpose of facility management.

The Community Funding Framework Policy streamlines the interim annual reporting process for organizations with three year service agreements.

4.        Funders are increasingly requiring organizations to make joint submissions with project partners and to demonstrate that they have secured funding from other sources (financial or in-kind contributions) before extending their support.

Yes

Three-year project funding increases the opportunity for emerging groups to establish a track record by limiting 3-year project funding to organizations not currently receiving renewable funding contributions.  It increases potential access to unallocated renewable funding for emerging groups by giving first consideration to the pool of organizations that have established a track record through 3-year project funding.

 

Document 2
2006 Community Funding Budget Summaries

# of Agencies

BUDGETS/ENVELOPES

 2006 BUDGET

COMMUNITY FUNDING

HEALTH

 

 

SUB-TOTAL HEALTH FUNDING

 125,352

RECREATION, COMMUNITY AND LEISURE

 

Community Association and Recreation Boards

 1,056,518

 

Special Events

 84,569

 

Senior Services

 31,084

 

Sports

 65,779

 

Other Recreation

 416,488

 

SUB-TOTAL RECREATION/COMMUNITY and LEISURE

 1,654,438

SOCIAL SERVICES

 

Community Houses

 870,907

 

Counselling

 2,824,992

 

Community Health and Community Resource Centers

 6,434,856

 

Day Programs

 1,561,885

 

Food Programs

 541,607

 

Seniors Services

 939,403

 

Other Social Services

 398,917

 

Poverty Initiative Fund

 208,284

 

SUB-TOTAL SOCIAL SERVICES BUDGET

 13,780,851

 205

GRAND TOTAL 2005 SUSTAINING FUNDING BUDGET

 15,560,641

NCB FUND

PORTFOLIOS MANAGED BY COMMUNITY FUNDING

 

 

Sub-Total Community Funding

 1,854,776

PORTFOLIOS MANAGED BY OTHER BRANCHES

 

 

Sub-Total Other Branches

 2,431,006

92

TOTAL NCB BUDGET

 4,258,394

COMMUNITY PROJECT FUNDING

35

TOTAL COMMUNITY PROJECT FUNDING

 510,500

 


 

Document 3

 

Funding Eligibility Criteria

 

Funding is limited to community-based non-profit organizations that:

 

·        Have a community service mandate addressing CPS Guiding Principles, Strategic Directions and Service Delivery approaches as well as emerging needs identified by the Community Funding Division

·        Are registered as a non-profit organization, or are sponsored by an incorporated organization, and operate in a non-discriminatory manner, as set out by the Ontario Human Rights Code.

·        Are governed by a Board of Directors*

·        Are located in and serve the residents of Ottawa

·        Demonstrate efficiency and effectiveness

·        Demonstrate fiscal responsibility

·        Remain in good financial standing with the City

·        Have been in existence for a minimum of five years for renewable funding, or two years for project funding, unless sponsored by an organization that has been in existence for more than five years.

 

The City will not fund the following types of organizations/requests through the Community Funding Program:

 

·        For profit organizations or ventures

·        Non-profit organizations sponsoring for-profit organizations

·        Organizations of political affiliation or for political activities

·        Organizations which act primarily as a funding source for other groups

·        Faith organizations where the services/activities include the promotion and/or required adherence to a faith

·        Hospitals, clinic-based services or medical treatment programs

·        School boards, primary and secondary schools, post-secondary institutions

·        Sports clubs (unless programs/services focus primarily people who face barriers to participation or to access to services)

·        Programs within the legislated mandate of other governments or City departments, such as child care services, first year settlement services, drug treatment programs, shelters for women victims of violence

·        Provincial/national organizations, unless a local chapter/branch exists to serve the residents of the City of Ottawa

·        Special events and festivals

·        Sponsorships

·        Capital expenditures

·        Land maintenance



*Other important sources of revenue for community agencies are:  fundraising, donations, rentals, user fees, other government funding, United Way, Community Foundation and Trillium.

*Les organismes communautaires disposent aussi des importantes sources de revenu suivantes : campagnes de financement, dons, droits de location, redevances, autres crédits publics, Centraide, Fondation communautaire et Fondation Trillium.

*Organizations reported that 70,611 volunteers contributed a total of 1.9 million hours in 2005 to enable the delivery of services in their community.

[1] Canadian Council on Social Development, 2003

[2] Social Planning Council of Ottawa, November 2004

* Groups, which are volunteer run, without paid staff, may be governed by a less formal structure than a Board of Directors (i.e. Steering Committee)