Massive declines in donations to health charities could imperil research

Revenue at Canada’s national health charities has plummeted 50% as a result of the COVID-19 pandemic and the collateral damage to the economy. This comes as demand for their services is surging among Canadians with chronic diseases for whom the novel coronavirus presents a major risk. The revenue drop could hit the health research community hard as it grapples with widespread research disruptions. 

Underscoring this point, an open letter sent to the Prime Minister on May 21 and signed by more than 1,000 researchers is calling on policymakers to assist health charities in confronting the monumental challenges they face. The letter highlights the “important and complementary” role health charities play, alongside the Canadian Institutes for Health Research, in funding critical research and clinical trials across the country. 

It states: “Without immediate support, these setbacks will have lasting impacts on health research in Canada, affecting hundreds of researchers, undermining millions of dollars in investments already made, and contributing to poorer health outcomes for Canadians.”

The letter was prepared by the Health Charities Coalition of Canada (HCCC), a membership-based organization of 25 national health charities, including the Canadian Cancer Society, the Heart and Stroke Foundation and Diabetes Canada. According to CEO Connie Coté, HCCC’s members collectively invest $155 million annually in health research, which supports 1,300 primary investigators and more than 2,500 trainees, co-investigators, chairs and professorships.

"Everything we do is based on having excellence in research," Coté told Research Money. "We have to make sure that we're continuing to move forward, that we have new clinical trials running, that we have researchers investigating areas of interest that are important to patients."

Charities Contribute to Overall Research Pie

Canadian health research relies heavily on philanthropic funding. For example, hospital-based research institutes such as the University Health Network in Toronto and the Ottawa Health Research Institute are funded, in approximately equal parts, by research grants from the federal and provincial governments, private industry and charities, including local foundations, health charities and non-government organizations.

“The charities are really a vital part of the landscape. If we couldn't rely on them, it would create a huge problem in terms of providing sufficient resources for scientists to be able to continue to develop new opportunities like therapies, diagnostics and so forth,” said Dr. Duncan Stewart, executive VP, Research, The Ottawa Hospital.

Dr. Pamela Valentine (PhD), president and CEO of the MS Society of Canada (an HCCC member), said her organization funds approximately 50% of research on multiple sclerosis in Canada. In an interview with Research Money, she said the society’s revenue has dropped by 75%, largely due to the cancellation or postponement of face-to-face fundraising events—big and small.   

“The health charitable sector is part of the fabric of the health research ecosystem in this country. And for each of us to be suddenly impacted to the degree that we have been from a revenue perspective has consequences downstream in terms of the research we can support, and how quickly we can be moving forward on finding answers that are required,” said Valentine.

At the beginning of May, the MS Society announced more than $5 million in new grants to health researchers, which she called "an important signal from the leadership of the organization that research is a priority for us." But she said the future is uncertain. "There's a disruption that catches up at some some point."

Other health charities, including the Kidney Foundation of Canada, have been unable to fulfill some research grants. And, in a briefing to the parliamentary Standing Committee on Health in April on the impact of COVID-19 on hospital-based research, the Princess Margaret Cancer Foundation told MPs that "many of our charity funders have signaled they will reduce awarded funds and cancel future funding opportunities due to their own financial stress caused by COVID‐19."

A Call for Support

Health charities are a microcosm of the wider charitable sector. A new report by Imagine Canada, a national organization advocating for charities and non-profits, spotlights the sector's marked downturn in revenue and its knock-on effects, which include widespread layoffs.

"The size and scope of these shifts is beyond anything that we have seen before, far exceeding what we saw in the 2008/2009 financial downturn and with such broad effects even the most diversified revenue bases are seriously affected," according to the report, which summarizes data from more than 1,000 charitable leaders who responded to an online survey in April.

Imagine Canada is calling for a sector resilience grant program consisting of grant funding support to cover core operating costs, offset the collapse of revenue sources such as donations and improve the sector’s resiliency.

Similarly, HCCC members are requesting federal direct investment of up to $28 million per month to enable charity staff to focus on providing patient support, re-starting fundraising efforts and protecting investments in research. That figure represents monthly revenue declines among HCCC’s members.

“We're not asking for a hand out," said Coté. "We just need support right now so that we can continue delivering really important services and funding research because that's our Holy Grail.” 

Coté added that while the charities have been able to take advantage of some COVID-19 relief programs, such as the federal wage subsidy, other programs are difficult for charities to access.

In a letter to Ontario Health Minister Christine Elliott, the MS Society also appealed for support. Recommendations include: the creation of a non-profit sector stabilization fund; doubling of the provincial portion of the Charitable Donation Tax Credit through the end of 2021 and making it fully refundable; and, a commitment to matching donations from Ontario residents to charities across the province.

To meet the immediate needs of the charitable sector, more than 60 philanthropic foundations have taken the Give5 pledge to disburse 5% of assets in 2020 (instead of 3.5%). If the pledge is taken by all private foundations in Canada, it could make up to $700 million available to the sector, according to the Give5 organizers.

Health charities are also adapting, rushing to put in place digital communication strategies, fundraising campaigns and patient support programs, said Eileen Dooley, CEO of Health Partners, another umbrella organization for health charities.

"Canadians living with chronic disease are expressing greater vulnerability, more concern, the feeling that the impact of COVID-19 is going to be more severe for them than it is for most Canadians. Our charities are trying to respond to their needs," she told Research Money.

"My message to policymakers would be to recognize the enormous contribution that health charities play as part of the healthcare system," said Dooley. "Recognize the fact that every dollar they cannot invest in research on supporting Canadians at their most vulnerable moments, they're going to be increased demands on this healthcare system down the road."

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