Charities hurt by economic downturn

First published: February 18, 2008

The gut-wrenching story of the people Camden County, New Jersey, is heartbreaking. According to a Toronto Star feature this past weekend, this place is one of those left behind. The crushing economic downturn has left this depressed city of about 80,000 people with a skyrocketing unemployment rate and drug dealers on every block. One area was so bad; the only solution was to raze the neighbourhood. All that is left are charred remains.

One part of the story describes the closure of the cash-strapped YMCA. A letter to members described the situations: “like other non-profit institutions in the community, (the YMCA) has fallen victim to the economic downturn, decreased donor support and declining membership revenue”.

It makes one think. Canadians are very worried about our economic future. Opinion polls show a 50 per cent increase in the number of people who expect an economic downturn in 2008. The spin-doctors are working overtime to convince us not to panic. A new CBIC report called An Island of Stability, is the most recent offering, pointing out Canada enjoyed a banner year in 2007. The economy created 400,000 new jobs and there were significant payroll increase in areas like computer services, oil and gas and public administration.

But, the truth is the Canadian story is a tale of two regions. In central Canada, particularly Ontario, the manufacturing sector is hurting badly. Meanwhile, western Canada is experiencing a boom, especially in the oil patches in Alberta and Saskatchewan.

Northumberland County is feeling this pain. The impending loss of the Kraft Canada plant in Cobourg will mean a loss of $640,000 in taxes, of which $220,000 goes into the town coffers. The rest goes to the school boards and the county. It also means the loss of 380 jobs, also people who pay taxes.

The obvious targets, like taxes, tend to grab headlines. But, the non-profit sector is also one of the silent casualties rarely get attention and yet are potentially the most damaging. In the 2006 United Way campaign, industry raised more than $421,000 or about half the total. This year, Kraft raised nearly $29,000 from its employees. Since 1969, the company’s workers have contributed in excess of $1 million. Beyond this, the corporation has contributed over $1 million worth of product to the Food 4 All warehouse. Without the nearly 500,000 pounds of food, the operation will be dramatically affected.

Another example is Collins and Aikman in Port Hope, which raised $30,000 in 2007, substantially less than the $55,900 in 2006. Over the past 19 years, employees have raised over $1.2 million.

These are only two companies, who are major contributors. There are many more who give to a host of causes. But as business slows down or revenues tighten, one of the first places to reduce expenditures are donations. The same is true of individuals. When going over the home budget, the easiest place to cut is money to charity.

What makes this worse is the lack of municipal, provincial and federal support given to non-profit groups. Finance Minister Jim Flaherty is expected to largely repackage his past tax cuts and spending program for the upcoming federal budget. The Tories refuse to provide any major help to the manufacturing sector in Ontario, leaving it to the province to mop up the mess. Meanwhile, both levels of government have reduced grants to non-profit organizations over the past 10 to 15 years that a large portion of the budgets depends on the largess of donors.

What will happen to such organizations as Northumberland Services for Women and its plans for expansion? Then, there is Keystone House and its aspirations to build homes for the mentally challenged in our community. These are two new initiatives. There are countless other organizations, stalwarts in the community that make up a list for too long to write down here.

Camden County is not Northumberland County. But, Northumberland could become a skeleton of its former self if politicians at all three levels do not take immediate action. Northumberland County MP Rick Norlock cannot let his government turn its back on the local economy. The paltry stimulus package it provided the Ontario government will do little, if anything.

And, it is not just saving local jobs that are so important. Many people commute to work in Oshawa, Peterborough and Belleville.

This same message needs to be heard by Northumberland MPP Lou Rinaldi.

But even more importantly, Norlock and his compatriots in Ottawa, along with Rinaldi and his buddies at Queen’s Park, must not turn their backs on the social agencies and non-profit groups that protect the most needy in our community.

It is far too easy to get lost in the number crunching of budgets. And, it is irresponsible to leave the future of organizations vital community organizations to the whims of donors. But without these, the heart and soul of Northumberland will be ripped out. And, while there will not be any razed buildings like those in Camden; the devastation will be felt nonetheless.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.