The Nonprofit Sector in Prince Edward Island – Policy Brief

Posted September 22, 2021

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Nonprofits are an important, successful and growing part of Prince Edward  Island society. They provide essential services and supports to individuals and communities and offer employees and volunteers broad-based job experience and rewarding career opportunities.   PEI nonprofits had a direct economic impact of $136 million and accounted for  1.8% of PEI’s GDP in 2019. The sector employs 3,350 people across 1,700  organizations.   There needs to be greater awareness and recognition of the important contribution that nonprofits make to Prince Edward Island’s economy and society. To improve awareness of the contribution and the obstacles that nonprofits are facing a survey was undertaken in early 2021.   Despite many successes, the survey and other data show that the PEI nonprofit sector is not growing as fast as the rest of the economy or the nonprofit sector nationally. PEI nonprofits face challenges securing stable funding and workers.   These difficulties have been exacerbated by the COVID-19 pandemic. The sector is working hard to overcome its challenges. However, innovation and support will be essential to achieve a strong recovery so these organizations can continue to serve  PEI communities.  Funding Challenges  Funding is the primary concern of nonprofits. Inadequate and uncertain funding impedes their ability to serve their communities. Many nonprofits find it difficult to secure the funding they need each year. This makes it challenging to deliver services, pay competitive salaries, and support training.   Funders need to consider whether existing levels and mechanisms to provide financial support are adequate to achieve the outcomes that they desire. The significant amount of time nonprofits spend applying to grants or fundraising is time not directly spent on achieving their mission.   Impact of COVID-19  COVID-19 has reduced nonprofit funding, made daily operations more challenging,  and accentuated mental health pressures. During the pandemic almost half (46%)  of Prince Edward Island nonprofits saw increased government revenues that helped to offset lost event, fundraising and other general revenues. These organizations will need continued support to ensure a full recovery of this important segment of the economy.   The pandemic has had the biggest negative impact on staff mental health, achieving its mission and getting volunteers. The one positive note is that 61% of organizations saw a positive impact on their technology use.   Labour Force  In terms of diversity, 70% of employees and 65% of leaders are women. The share of employment of underrepresented groups is also above the PEI average.  Labour pressures and an aging population, however, are serious threats to the sustainability of the nonprofit sector. With lower salaries, fewer benefits and lower job security nonprofits struggle to attract and retain the skilled employees needed to run their operations and maintain the quality of their services. Their leaders tend to be older than senior managers in other industries but few nonprofits have a  formal succession plan. Stable and sufficient funding, and support targeted at HR  challenges, will be important to ensure the nonprofit sector can continue to serve  Islanders into the future.  Volunteering  Volunteers account for over 50% of the paid and unpaid hours worked at nonprofits. Prince Edward Island has one of the highest rates of volunteerism in Canada at about 48% of the population. Yet volunteerism rates and hours have been declining since 2007, with declines intensified by COVID-19.   Encouraging volunteerism will be crucial to the continued success of nonprofits.  Recent declines require targeted action at the individual nonprofit and the sector level. Without sufficient volunteers, non-profits will need to find funding to increase their paid staff.  Policy Priorities  More effective funding   Nonprofits are an important, successful and growing part of Prince Edward  Island society. However, they have been growing more slowly than the rest  of the economy and slower than nonprofits in the rest of the country. More  consideration is needed on the appropriate level of funding and the most  effective and stable funding mechanisms. Small nonprofits in particular, may  also require assistance applying for funding, accessing training and exper tise, and ensuring appropriate governance and internal policies are in place.  Targeted HR strategy  Labour pressures and an aging population are serious threats to the sus tainability of the nonprofit sector. With lower salaries, fewer benefits and  lower job security nonprofits struggle to attract and retain the skilled em ployees needed to run their operations and maintain the quality of their  services. Stable and sufficient funding, and support targeted at HR challeng es, will be important to ensure the nonprofit sector can continue to serve  Islanders into the future.   Respond to declining volunteerism   Volunteers account for over half of the labour resources available to PEI  nonprofits. However, volunteer hours have fallen over the last decade with  declines intensified by COVID-19. Policies to encourage volunteerism, espe cially for younger workers and new immigrants will be important. Increasing  employment in the nonprofit sector could also be part of the response to  declining volunteerism.  Accelerate the adoption of technology   The pandemic accelerated the adoption of technologies such as remote  working, cloud computing and e-commerce for many nonprofits. But oth ers are being left behind. Nonprofits need to examine technologies that can  enhance their productivity and effectiveness. Such investments can help  improve service delivery and data analysis, automate processes, strengthen  collaboration and better manage volunteers. Continued pandemic support  COVID-19 has reduced nonprofit funding, made daily operations more challenging, and accentuated mental health pressures for workers. There are several challenges that persist in the economy and much of the burden to help will fall on the nonprofit sector. These organizations will need continued support to ensure they can assist the industries and individuals that are struggling to recover. 

 

A full copy of the report and factsheet and policy brief are available below

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