PFC News Philanthropy’s Role in Supporting Canada Through an Existential Crisis: Some Reflections Jean-Marc Mangin PFC News 9 mins read March 3, 2025 News & Insights PFC News Philanthropy’s Role in Supporting Canada Through an Existential Crisis: Some Reflections With the second Trump Presidency, the post-world war order – already frail – is crashing down spectacularly. In talking to philanthropic leaders across the country, it is clear that they want to better understand the implications of these turbulent geopolitical waters. The scale of the dramatic and historic shock to Canadian-US relations cannot be understated. The Trump administration has turned its back on liberal rules-based order and its 80-year alliance between democracies. Canada’s prosperity, and sovereignty are under direct threat from our erstwhile friend and neighbour. The likelihood of a recession looms large, accompanied by tariff-induced inflation and a weakening dollar. Canadians rightly feel betrayed and anxious. Our governments will be focusing on Canada’s national and economic security, and rightly so. While they seek to maintain access to the US market, the need to accelerate market diversification is apparent to all, as is addressing domestic barriers to trade and innovation. Massive public expenditures will be required to support affected industries and their workers and to develop the infrastructure required for a more resilient economy. Federal and provincial governments, regardless of political affiliation, are likely to further cut back on public goods such as our social safety net, education, health, arts, environmental and climate protection, and foreign aid. As needs explode, frontline charities and non-profit organizations that are already under great strain will face even greater staff and volunteer burnout. Their revenue challenges will become even more prevalent. Canadians will directly suffer, and in all likeliness, become collectively poorer. What Can Canadian Philanthropy Do? Foundations can play a pivotal role by providing some counter-cyclical funding during this historic hour of need. Ongoing generosity will remain paramount. Some foundations may consider short-term erosion of their endowments (or a blended strategy in managing them) as Canada navigates this crisis. The 5% DQ is just a floor, not a ceiling. Grantmakers may want to recommit to COVID-like principles to better support partners and collaborators. Five years ago these principles were widely adopted by foundations. Many have maintained these practices as part of a trust-based approach to their philanthropy. 1. Be Flexible, Pragmatic, and Proactive in Grant-Making Simplify application guidelines and other administration. Consider converting restricted grants to unrestricted funds or, at a minimum, loosen restrictions on existing grants. Demonstrate flexibility on reporting timelines and deliverables. Accelerate payment schedules, regardless of market upheavals. Continue regular grant-making cycles whenever possible to protect the operational capacity of partners. 2. Collaborate on or Contribute to Emergency Funds Consider unrestricted emergency grants to existing partners and expanding funding scope. Pay attention to duplication and red tape challenges. Reach out to partners and look for practical ways to enhance funding on the ground. 3. Stretch and Deploy your Expertise and Funding Offer your expertise and funding tools, including endowment and assets, to support the capacity of partners to manage cash flow and preserve or augment operations during the crisis. Provide bridge funding, loans, equity investments, impact investments, and core funding for partners to reorganize operations. Expand support to Indigenous-led and serving organizations. Accept greater risks in investing in nonprofit organizations in new ways, with a goal to build and strengthen community-led infrastructure for a more inclusive and livable Canada. 4. Support Advocacy Leverage your grants and programming by investing in policy innovation. Support and amplify community-based organizations so that their needs are heard and met, particularly those led by and serving Indigenous communities, Black communities, people of colour, and queer and nonbinary people. Support the imperative for our democratically elected government to deliver inclusive programs that protect the most vulnerable among us. Our governments need our sector’s wisdom and experience to help ensure no one is left behind. 5. Take the Long View and Stay Engaged Remain open to addressing the unknown gaps and needs that will emerge. Invest time and energy to notice, make visible, and share with others new ways and norms of approaching our work that result in deep change and can be scaled up toward equity and justice in the months and years to come. These COVID principles have proven their relevance. However, more will be asked of philanthropy. Given the scale and urgency of the crisis, I do not think that “bailing out” philanthropic narrative is very useful. First, the math simply does not work. While foundations provide about $10 billion in grants every year, it is unrealistic to expect philanthropy to fill the gaps in all areas. The order of magnitude of the needs – especially as government expenditures shift away towards national defense, emergency economic funding and investments in critical infrastructure – dwarfs what foundations can contribute. All foundation assets represent about 36% -or about four months equivalence- of what Canadian governments spent on health in 2024. There will be increased and real tension between emergency response, protection of ongoing programs and investing in nation building and system change. Second, most foundations see themselves as complementary, not as a substitute for government funding and leadership. Given the size of the philanthropic foundations sector in Canada, the limits of a substitution model are very clear. With limited resources to face this historic crisis, it is even more important for foundations to be clear and nimble about the strategic goals being pursued in partnership with communities and the relevant governments. This also applies to emergency funding. During COVID, a group of foundations came together to support the public health response of community groups in the poorest and most vulnerable communities of Montreal. This rapid and nimble response was described as highly successful when evaluated by Université de Montréal researchers. It was also meant -right from the start- to be temporary. Unfortunately, the Quebec government largely failed to continue supporting these community organizations during the recovery stage. The performing arts are facing a perfect storm across the country. Bailing out is also not a realistic option in this sector. However, there are promising discussions on how philanthropy through both its grants and impact investments could support deep transformation of more sustainable of cultural organizations as they re-invent themselves in telling Canadian stories to Canadian audiences. With our sovereignty under attack, the arts are even more critical to our collective well-being and imagination. Philanthropy is unable to be a salvation that maintains the status quo. But investing in our partners and the communities they serve, and using policy support as a lever to achieve strategic goals could create real opportunities to make a difference. Over time, policy work can lead to deep and system-wide results. We have seen it in areas such as early childhood, disability benefits, and the transition to a lower-carbon economy. To do so, Canada will need more from its underfunded and modest think tank community (e.g. Institute for Research on Public Policy, Public Policy Forum, Century Initiative, Smart Prosperity Institute, CD Howe Institute, Fraser Institute to name a few) and from its public policy schools across the country. With modest new investment, foundations can help sustain evidence-based policy development as Canada attempts to reduce its long-term dependency on the US. To resist disinformation and propaganda, Canadians need a healthy local media ecosystem. The recent public inquiry on foreign interference and Canadian elections concluded that disinformation represents the greatest threat. The experience in Germany recently with their election may be a harbinger of what we will soon face in the coming weeks and months. A recent report released by the Public Policy Forum in partnership with the Rideau Hall Foundation and the Michener Awards Foundation highlights the critical state of local news in Canada and proposes urgent recommendations to revitalize a key industry that plays an outsized role in Canadian democracy. This sector has attracted some modest philanthropic funding in recent years. More needs to be done urgently. During these uncertain times, we cannot forget our commitments to equity-seeking communities, notably Indigenous Peoples, especially as Canada marks the 10-year anniversary of the Truth and Reconciliation Calls to Action this year. All Canadians are now experiencing a small slice of what Indigenous Peoples have lived for a long time: an imperial thirst for our resources, and a disregard and indifference to our culture, history and sovereignty. To meet this moment, it is also our collective responsibility to respond with appropriate risk-taking in an environment that has become – and will remain for the next four years at least – intrinsically riskier and uncertain. Several foundations are in the process of allocating all or a significant share of their portfolio to impact investment within Canada, and in many cases, towards affordable housing in particular. As part of a war-like response to this crisis, many will expect foundations to adjust their investment strategies towards impact. This will be challenging. Despite the rapid growth of market-ready impact investment opportunities, the market remains underdeveloped. Nonetheless, foundations are better positioned for risk than most charities. In the event of failure, we can also learn and pivot quickly. As an organization, PFC is considering its role in supporting philanthropy during this turbulent time. As a starting place, our goals will be to help to make sense of the crisis by convening relevant expertise and evidence-based perspectives, and provide platforms and venues for foundations to solve problems, learn and collaborate. Sharing, learning and collaboration do not mean uniformity. Philanthropic responses will continue to vary greatly. Pluralism is our strength as a philanthropic community serving a diverse and democratic society. Some foundations will address emergencies here and abroad; many will protect long standing and valuable programs and charities that will continue to critically serve Canadians; others will invest in finding long-term structural solutions for a resilient and prosperous Canada that remains true to its democratic values of decency and inclusion. This crisis will call on a spectrum of responses. Coordination and information sharing will become even more important. Regardless of the specific focus adopted by each foundation, wise practices for philanthropy will remain steadfast and critically important: working with partners with trust and respect, investing in their capacities (from governance, to operations, to advocacy), celebrating outcomes, learning from failures and, most of all, staying the course in building a strong and free Canada that we all cherish. Share This Article Facebook Twitter LinkedIn Email
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