During this morning’s address to the country, Prime Minister
Trudeau offered more important details on the Government of Canada’s Emergency
Wage Subsidy that was first announced on Friday of last week.
The following eligibility parameters and details were
Businesses that can show that their revenues
have decreased at least 30% since the start of the pandemic will be eligible
for the 75% wage subsidy.
The assessment of the 30% revenue drop will be
done after the fact. If the drop was actually not this low, the company will
have to repay.
The number of employees a company has will not
The subsidy will apply to non-profit and
charities, as well as companies that are both big and small (no cap).
The government will cover up to 75% of the first
$58,700 that employees earn. That means up to approximately $847 a week. This
will be backdated to March 15.
The subsidy will be a direct payment to the
company so they can pay employees.
Prime Minister indicated that there will be additional background documents and
details coming tomorrow, including the estimated fiscal cost of the new
program, from both the Minister of Finance and Minister of Small Business,
Export Promotion and International Trade.
In his remarks after announcing the new details of the
Emergency Wage Subsidy, the Prime Minister also made very clear that any
businesses that seek to take advantage of the new program, or game it, will
face strict consequences – expect those details tomorrow as well. He also noted
that should employers be able to cover the additional 25% of salaries not
covered by the subsidy, they should pay their employees that difference.
Supporting Arts Organizations with Operating Funds
October 28, 2019
One of the most important benefits to arts organizations who established endowments with the Ontario Arts Foundation under the Arts Endowment Fund program (AEF) (and new organizations continue to) is the fact that endowment distributions are unrestricted. Unlike most grant funding, which is directed towards particular programs, AEF income can be used by an organization where they choose. This allows arts managers and their boards to decide each year if the income will be applied to core operating costs (rent, salaries, overhead), or a particular production, outreach initiative, or an investment in something new.
The Chronicle for Philanthropy recently published an article highlighting how five of the US’ wealthiest foundations have decided to focus efforts on grant makers to join them in offering funding that can be directed to operating expenses. In doing so, they hope to set an example to encourage other funders to ‘stigmatize’ in the eyes of donors and granters operating costs and help funders understand supporting an organization in this way helps them thrive and grow and make wise operating decisions. The article identified six ways, a funder can consider supporting operating costs of a not-for-profit:
Flexible enterprise support – overhead, allowing arts managers to decide how funding is to be used
Targeted growth support– directed at salaries, or building a new facility/physical need or invest in developing a new program
Outcomes funding – improving a mission ( arts ) in a specific way. The applicant for funding agrees to success/outcome measures and how much funding is needed to attain that goal
All in one project pricing - funding for anything project specific related – the distinction is that the grant recipient doesn’t have to specify if the money is used specifically for the project itself or overhead
Indirect cost rate-based project funding – funding to cover a initiative, plus a %age of project expenses such as overhead
Flexible program support- e.g. rent and other costs that go beyond a projects projected budget
All the approaches are intended to give an organization much needed flexibility to carry out their mission, potentially on a multi-year basis. This approach, which we endorse can be a valuable tool in the range of financial support options pursued by arts organizations, allowing to produce, explore and create.
Return on Investments - 2018 a Challenging Year for Foundations
September 04, 2019
A recent report from the U.S. based Council on Foundations on investment returns for community and private foundations in 2018 is an interesting read. We monitor these reports as one way to confirm how the Foundation investment performance compares to similar size foundations.
The report articulates how 2018 was a challenging year. On average private foundations earned a negative -3.5% for one year and community foundations a negative -5.3%. The OAF achieved a better, but still negative one-year return of -1.9%. All of these results are reported net of all investment management costs.
One would caution that December 2018 was a particularly challenging year end, and markets recovered strongly in the first quarter of 2019. (The Foundation earned 8.1% for the year ending March, 2019.)
Endowment spending and annual disbursements averaged 4.6% for community foundations. Spending rates declined slightly across the sector in light of the lower returns.
Most organizations’ long-term reporting (10-year performance) no longer includes the 2008 market downturn. When looking at 10-year returns, community foundations with assets below $100 million generated annual returns of approx. 8%. The OAF 10-year return is similar at 8.2%.
One of the factors we monitor is the asset allocation strategy of comparable size foundations. During 2018, changes in asset mix were minimal for both private and community foundations. The most significant difference between the OAF and private and community foundations is the larger allocation to alternative strategies and a lower allocation to fixed income by the OAF.
The Foundation board has been lowering direct fixed income as a part of asset mix, as we feel that higher returns are available from equities on a long-term basis.
It is not our intention to follow the strategies of other foundations. The OAF charts its own strategy which focuses on the long-term and protects capital, ensuring annual returns that allow for disbursements to support the arts.
Nonetheless, it is helpful to monitor what is happening in the charitable sector as a “reality check” and assurance that our strategies are doing well.