April 4, 2011

By Ingrid Zacharias

Non-profits travel through several stages as they grow. Most non-profits, at some point endeavour to get Federal funding.

While Federal funding often means significant growth in an organization’s funding, it also results in many woes and pitfalls. They are:

• Detailed funding proposals – The funding proposals created usually need to be very detailed covering every activity and financial expenditure that the organization plans to do.
• Very specific budgets – The non-profit’s budgets for such funding must foresee every possible occurrence during the funding year and include resources in the budget for it.
• Some Federal Project Officers micromanage – Some of the project officers that you will encounter when you acquire Federal funding can be micromanagers and can actually abuse their position of power by making the organization jump through hoops and change the direction of the project according to their personal opinions, not necessarily an interpretation of government policy.
• Monthly Reporting – To the best of my knowledge the Federal government is the only funder who demands monthly anecdotal and financial reports. These reports are time consuming and tedious. They are also the only ones who will disallow something that is a miniscule amount of money because they feel it doesn’t fall into their designated mandate.
• Funding Decisions are slow to be made – Funding decisions take a lot of time to process. Often the Federal government requires you have your funding request in 6 months in advance of the funding start. This is not so bad if it is your first time funding, but it is problematic when the non-profit has to provide a yearly report when they are only half way through their funding year.
• Significant turn over in project officers – The Canadian government has tried to put in place stop checks to ensure that public’s funds are not being abused. For this reason, the person who reviews your funding proposal is not the same person who monitors the project during the funding year. This often makes relationship building with project officers difficult, as it is possible to have a different project officer for each funding year.
• Changing the rules midway – Government is notorious for changing the funding rules while the funding is still active. As the government makes changes to their policies, it directly impacts non-profits funded by them, because it is possible for rules to change during the funding year and this can have a negative impact on the non-profits project overall.

Question of the Day: What pitfalls have you experienced when your non-profit acquired funding from your Federal government?

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