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Monthly Archives: May 2012

How Gambling is Good for Charities

We all know of the negative effects gambling can have on individuals and on society. However in our ceaseless quest to bring you the most relevant and interesting information, we would like to share how revenue from gambling in British Columbia is used to support community organizations. While most of the data was available from the province’s website, there were some inconsistencies that needed to be addressed as well as some organizing of the data before we could analyze it.

The BC Lottery Corporation

The BC Lottery Corporation conducts, manages and operates most commercial gaming in the province including casinos, lotteries, commercial bingo halls and community gaming centres.  For the 2010/11 fiscal year, total revenue from commercial gaming in BC was $2.68 billion.  After expenses, including prize payouts, total revenue to the government from gaming was $1.1 billion. Of this amount, about 60% is deposited into the province’s Consolidated Revenue Fund and the rest is allocated across various programs, communities and sectors of the economy.

How Gaming Benefits Community Organizations

We found two ways in which community organizations benefit directly from the gaming industry:

  1. Community organizations gain revenue by conducting independent gaming events.
  2. Community organizations receive provincial grants.

Of the government’s revenue from the gaming industry, approximately $135 million is distributed to community organizations each year. Grants distributed by the government account for 80% of total gaming revenue for charities, and earnings from independent gaming events represent the other 20%.  Combining both grants and independent earnings, community organizations received $168.8 million in revenue from the gaming industry last year.

How is Revenue from Independent Gaming Activities Earned?

The distribution of revenue earned independently by community organizations from various gaming activities is illustrated below. Independent gaming activities include ticket raffles, which account for 89% of revenue, as well as bingos, casinos, poker and wheels of fortune.

Organizations apply for a license from BC’s Gaming Policy and Enforcement Branch to conduct independent gaming events. More information on available licenses and application guidelines can be found here.

What Types of Organizations Receive what Distribution of Grants?

The provincial government distributes funds to programs that fall under one of the following categories: Arts and Culture, Sport, Environment, Public Safety, Human and Social Services, and Parent Advisory Councils and District Parent Advisory Councils (PACs and DPACs). PACs and DPACs exist to benefit students by enhancing extracurricular opportunities available to them. 50% of funds, approximately $67.2 million, were allocated to organizations in the Human and Social Services sector with a median grant amount of $24,000. This is down from $76.6 million in 2010/2011. Human and Social Services and PACs and DPACs are the only two sectors which have seen decreases in the amount of funds allocated. Organizations in the Public Safety sector tend to receive few grants but of large sums, accounting for 3% of the total number of grants with a median amount of $29,650. The distribution of grants across sectors is illustrated in the graphs below.

How are the Grants Distributed Geographically?

Each year over 5,000 grants are distributed to community organizations in 283 BC cities. The chart below provides an idea of the regional distribution of these funds. Approximately 59% of BC’s residents live in the Lower Mainland which receives 58% of the total gaming grant distribution.

Grant Eligibility

To be eligible for a government gaming grant, the program being funded must fall under one of the above listed categories. Only programs which have been operating a minimum 12 months are eligible for government gaming grants. More information on eligibility and on how to apply can be found here.

New Faces for New Data

This month, we’ve been joined by a new face in the office: a shiny, new member of our communications & research team. Welcome to the club, Sophia!

Sophia Maizel is a recent graduate from McGill university, with a major in Economics and a Minor in Finance. She is a big fan of social finance, and just recently was attending a workshop on Social Finance and Community Bonds held in Toronto at CSI. Her role here is to help us analyze the huge amount of data that our developers and research team have been gathering, and present it to you, dear reader, to show you some of the patterns in the sector and keep you and your organizations informed.

With the amount of data that is beginning to open up and become accessible, , a number of opportunities for non-profits exist to ask and answer important questions in their sector. Huge datasets on non-profit fundraising are coming online on the federal and the provincial level, as well as other datasets that Ajah actually gathers on social media use and web presence. The exciting part is that while these datasets are – for the moment – “siloed” and isolated, Ajah is now able to start combining and analyzing them together. By doing so, we can now examine important issues that were impossible (or extremely difficult) to study before now.

This information and analysis is incredibly valuable. Researchers have used it to spot fraudulent charities, fight human trafficking , and even track epidemics. While Sophia won’t be doing anything like that, she will be examining important aspects of financial data in the sector, such as new fundraising strategies and sources. Her inaugural post is on gaming and gambling activities as revenue sources for non-profits, and is coming out this week. Check back soon!

By |May 21st, 2012|About Ajah|0 Comments|

3e partie: Êtes vous prêts à solliciter une fondation?

Si vous n’avez jamais sollicité de fondations privées pour le financement de votre organisme de bienfaisance, cela peut paraitre une tâche insurmontable. Où commencer? Qui approcher? Pour quel projet? Comment présenter votre demande? Comment déterminer le moment idéal pour déposer votre dossier? Voici plusieurs questions auxquelles vous ferez face en vous lançant dans la sollicitation de financement auprès des fondations. En réalité, ce n’est pas aussi complexe que vous le pensez, pourvu que vous établissiez une stratégie, que vous soyez organisé et surtout que votre recherche préliminaire soit des plus exhaustives.

La réussite de votre sollicitation auprès des fondations est une question de marketing, c’est-à-dire qu’il est essentiel de bien cerner le positionnement de votre organisme et de cibler les bons donateurs. Alors, avant de planifier votre collecte de fonds, vous devriez déjà avoir identifié :

  • l’identité de votre organisme de bienfaisance
  •  sa niche
  •  l’unicité de ses programmes et services
  • ses besoins financiers ainsi que les programmes et services auxquels ceux-ci sont rattachés

Essentiellement, vous devrez préparer un argumentaire structuré. Ce document-clé facilitera la rédaction de vos demandes de subvention et vous aidera à focaliser sur l’essentiel, soit les besoins de votre organisme. Si vous n’avez pas déjà un argumentaire, prenez le temps d’en écrire un. Vous serez agréablement surpris de constater à quel point les étapes subséquentes sembleront faciles!

En acquérant une meilleure compréhension de ce qui rend votre organisme unique, vous pourrez dresser une liste de fondations susceptibles de soutenir vos programmes et services. Soyez sélectifs et assurez vous d’allouer suffisamment de temps à la recherche de donateurs potentiels, car l’appariement entre vos programmes et les intérêts philanthropiques d’une fondation peut s’avérer être tout un défi. Le prochain article de cette série se penchera sur la recherche de donateurs potentiels et vous donnera quelques astuces pour cibler plus efficacement les vôtres.

Ligia Peña, M.Sc., CFRE, présidente de Diversa Consultants, a plus de 10 ans d’expérience en collecte de fonds et en communication. Elle a collaboré avec une grande variété d’organismes parvenant du secteur communautaire jusqu’au développement international. Son entreprise, Diversa, se spécialise dans le soutien des OBNL de petite et moyenne taille petite en matière de collecte de fonds et de communications.

(Ce billet apparaît aussi sur le site Diversa.ca)

Billet précédent de cette série

Part 3: Are you ready for foundation fundraising?

Are you ready for foundation fundraising?

If you’ve never solicited family foundations before, it can seem like a daunting task. Where to begin? Who to approach? For which project? How should the proposal be presented? When is the right time? These are some of the questions we face as we embark upon foundation fundraising. The truth of the matter is that it isn’t as difficult as you think, provided that you are organized, strategic and most importantly, you have done your research.

Raising money from foundations is all about marketing, i.e. clearly positioning what your charity does and targeting the right group of funders. So before you plan to solicit funds from foundations, you should already know:

• What is your charity’s identity
• What is its niche
• What is unique about the programs and services it provides
• What are its needs in terms of financial support and for which programs and services

In essence, you need to have a clearly defined case for support. Your case for support will be the key document that will make grant writing easier and help keep you focused on your organization’s needs. If you don’t already have a case for support, take the time to write one and you’ll be amazed at how much easier the next steps will seem.

Once you have a clear understanding of what makes your charity unique, you can then draw up a list of foundations likely to support your charity’s unique programs and services. Be selective and make sure you allocate enough time for prospect research because matching your programs with the philanthropic interests of a foundation is not always easy. The next article in this series will be about prospect research and will give you some pointers on how to determine whether a foundation is a good match for your charity’s needs.

Ligia Peña, M.Sc., CFRE, President of Diversa Consultants, has more than 10 years of experience in fundraising and communications and has collaborated with a variety of charitable and non-profit organizations ranging from the community to international development groups. Ligia’s company, Diversa, specializes in helping small and mid-sized charities with their fundraising and communications.

(Cross-posted at Diversa.ca)

Previous post in this series

Turning Social Networks into Financial Assets with Community Bonds

Here at Ajah, we make it our business to know about all the financing options available to the non-profit sector, including the emerging field of social finance.  So last Friday,  we were very pleased to be able to attend a workshop on Community Bonds held by the Centre for Social Innovation (CSI) in Toronto and led by CSI’s CEO, Tonya Surman. The workshop was very well attended, drawing about 60 people from across Ontario, representing community organizations, the financial services commission of Ontario, lawyers and banking sector representatives.

The workshop introduced Community Bonds and explained how this innovative financial instrument made it possible for CSI to purchase a building while having close to no financial assets. So what is a Community Bond? A Community Bond (CB) is an interest bearing loan that is accessible to unaccredited investors and can only be issued by a nonprofit organization. The idea of the Community Bond is to help nonprofit organizations with little to no financial assets but with a strong community presence, turn their social capital into financial capital. The CB addresses a key issue for nonprofit organizations who want loans but lack collateral. Instead of depending solely on wealthy philanthropists, corporate sponsors, foundations and the government, the Community Bond provides a way for nonprofits to obtain loans from regular citizens and community members who act as investors. In addition to providing funding for nonprofits, the Community Bond engages citizens with community organizations by allowing them to make investments in ideas they believe in.

While no two Community Bond stories will be the same, it was useful to understand what made this idea a success for the Centre for Social Innovation. CSI is a Toronto-based nonprofit organization that leases work spaces to social entrepreneurs with a goal of bringing together ideas and contributing to the development of social innovation. For CSI, the Community Bond idea came from the desire to obtain a building due to the rapid growth in demand for their shared office spaces, yet a serious lack of financial assets. So, CEO Tonya decided to see if it would be possible to leverage CSI’s primary asset – its relationship with its community, in order to obtain funding to purchase a building.

For CSI, there were three crucial elements which contributed to making their Community Bond idea a success:

  1. CSI board of directors invested: Having the support of their board acted as a signal, boosting investor confidence and reducing problems of asymmetric information by making clear that insiders endorse the idea.
  2. They received a loan guarantee from the City of Toronto: This also acted as a signal and boosted investor confidence, which allowed CSI to obtain a larger mortgage with a better rate.
  3. The asset they were financing was real estate: Investors tend to feel more comfortable investing in tangible assets. In case of default, a tangible asset can be repossessed and liquidated so debt-holders may be at least partially reimbursed. The lower risk involved in investing in a real-estate asset allowed CSI to offer a lower interest rate to its investors.

While this could be a great way for nonprofits to obtain loans and fund projects,  Tonya stressed how important it is, particularly in the growth stages of this instrument, that the quality of investment ideas are adequately high and that the initial projects succeed, so as to maintain the credibility of this new type of funding. Community Bonds require significant resources to implement, and bear risk. Any organization considering this form of financing should ensure that they are prepared to raise, manage and repay loans, and that they understand what this entails.

For a detailed account of how CSI made Community Bonds work for them, see their guide “The Community Bond: An Innovation in Social Finance” available for purchase online for $85. If you think this idea may work for you, be sure to visit the CSI website in the coming weeks as they will be making their legal agreements available for purchase. Some other organizations worth checking out who are adapting the Community Bond idea to their projects include West End Food Coop, Zooshare, SolarShare.

A big thanks to CSI for hosting an informative workshop which brought together a variety of inspiring organizations and communities, and for contributing to expanding the financing possibilities for nonprofit organizations!