Foundation for Rural Living

A Portrait of the Rural Voluntary and Non-profit Sector

An Expanded Summary

Background

The Foundation for Rural Living (FRL), in partnership with the Imagine Canada (Formerly the Canadian Centre for Philanthropy), has launched a formal research project designed to aid in understanding the trends and patterns affecting the rural voluntary sector. The Government of Canada, through the Canadian Rural Partnership, The Co-operators, and The Laidlaw Foundation aided the Foundation for Rural Living in completing the research study. The Rural Charitable Sector Research Initiative is a full-scale study – the first of its kind in Canada – involving several phases that will aim to describe the current situation in the rural non-profit sector, rationale for it, and establish a baseline to measure change. The focus of the initial phase is Ontario although some of the description and analysis is relevant to the nation and beyond.

A preliminary research study completed by FRL in August 2002 clearly identified a serious level of immaturity in Ontario’s rural charitable sector. Working closely with Statistics Canada, a consistent definition of rural and urban was used to analyze data from lead charitable organizations and activity at a cursory level. This material was complemented by interviews with select community and rural agency leaders.

In the spring of 2003, CCP researchers began Phase 1 of the full-scale research initiative - a review of existing literature on the rural voluntary sector; a comparative analysis of the 2000 National Survey of Giving, Volunteering and Participating (NSGVP); and an analysis of voluntary organizations registered as charities with the Canada Custom and Revenue Agency (CCRA) in 1999. Their findings have been compiled into a 77-page report on The Nonprofit and Voluntary Sector in Rural Ontario, the essence of which follows:

Setting the context:

Rural is changing. Demographic trends and economic restructuring have combined to alter the fabric of many rural communities. Rural areas account for over 95% of land in Ontario but overall, rural populations in Canada and Ontario declined between 1991 and 2001.

Manufacturing is the biggest employer in rural and small town (RST) Ontario, followed by the retail and wholesale trade, primary sectors, health sector and construction. Agriculture and the family farm are key community assets and an occupation of many rural Ontarians.

According to the Rural Health Research Summit (1999), rural Canadians have a higher annual death rate, higher infant mortality rate and lower life expectancy, than urban Canadians, particularly in Ontario. Rural Ontario is challenged by inadequate health facilities and technologies and a shortage of health professionals, e.g. in 1999, there was an estimated shortage of over 500 physicians in rural Ontario.

Rural is home to more older people, with a high proportion of youth under the age of 15. Youth out-migration is a concern – there is an under-representation of youth between 15 and 24. Rural is home to fewer newer Canadians and its residents generally tend to have lower incomes than those living in urban areas.

Rural has a rich and diverse heritage and an abundance of natural resources. It is a significant driver of the economy and the well being of all citizens.

Speaking of rural, however, the researchers mention several times in this report that one of the difficulties they ran into was establishing a definition of “rural”. Depending on the definition used, from 13% to 24% of people in Ontario live in rural. Also, there is as much variation within rural as between rural and urban. For instance, the characteristics of the voluntary sector in a rural area adjacent to a large metropolitan centre would be quite different from that of a rural area in a more remote part of the province. In 2001 the majority (about 80%) of RST Ontarians lived in areas considered to be strongly or moderately influenced by a local metropolitan area.

Rural organizations appear to have fewer resources than urban; however, branches in urban often serve rural as well. For instance, urban charities appear to spend a greater proportion of their revenues on health programs than rural. This may be because medium-sized health institutions are located in small cities surrounded by rural areas and are therefore categorized as urban organizations although they serve rural communities. So a definition of rural programs based on physical location rather than program reach/orientation is a drawback to the analysis.

What the researchers found from their analysis of existing literature:

There is not a great deal of literature on the subject at the moment; however, the researchers found the following:

Rural voluntary organizations tend to be smaller and receive proportionately less revenue from government sources;

In Saskatchewan in 1991, researchers found that most important sources of income for rural voluntary organizations were user fees and fundraising.

Many rural organizations suffer from an inability to use more effective fundraising methods and to compete effectively for government grants and contracts.

Rural voluntary organizations employ fewer full-time staff with specialized skills, they have a higher staff turnover than urban charities, and it’s more difficult for them to use their volunteers to their full potential.

In rural organizations, a small number of volunteers put in longer hours than in the cities, and there are concerns over both retaining these volunteers and recruiting new ones.

Rural charitable networks appear to be relatively informal, lacking the technology to establish more effective networks.

The rural voluntary sector has apparent training needs, particularly in the areas of technology, strategic planning, program evaluation and fundraising.

What the researchers found out about rural donors and volunteers (from their analysis of the 2002 NSGVP):

Ontario contains almost half the top donors in Canada; relatively more of these top donors live in urban rather than rural areas.

Rural residents volunteered more and directly helped someone at a higher rate than urban residents.

More rural individuals made donations in 2000 (85%) compared with 76% of urban residents, and they donated more frequently: an average of 4.1 donations verses 3.8 in metro areas. However, the average annual donation in rural was lower than urban: $280 verses $322.

Both rural and urban donors gave the bulk of their donations to religious and health organizations, followed by social services.

More than in urban areas, rural donors were motivated to give to a cause or volunteer for it because they or someone they knew personally was affected by it because of a sense of religious obligation, and out of sense of obligation to help and of community obligation.

Rural volunteers were more likely to be motivated by the possibility of gaining skills and employment contacts, and more likely to report gaining skills and knowledge from their volunteer experiences.

Rural volunteers were more likely to say they didn’t volunteer because of health problems or because they were physically unable, while urban residents were more likely to say they didn’t volunteer because they didn’t know how to get involved.

Urban volunteers were more likely to be members of work-related organizations like unions or professional associations; rural more likely to be involved in community-based organizations like school boards and service clubs. These local organizations are smaller on average and probably rely more on community-based fundraising methods such as door-to-door solicitation. (Note: Door-to-door appears to be more successful in rural communities, where people know and trust each other. However, donating via door-to-door solicitation is an indication of a less strategic donor.)

Aging and burnout of volunteers, and the challenges associated with recruiting and managing sufficient new volunteers and members, is creating a concern about the future sustainability of rural charitable organizations.

Volunteers reported insufficient expertise, time and infrastructure to be able to adapt to change and growth.

Barriers to technology use included lack of skills and equipment, cost and lack of awareness or conviction about the benefits.

Rural organizations reported a general feeling of isolation from broader policy exercises.

Rural charitable organizations face the following funding challenges:

Problems with government funding relationship: Organizations experienced trouble getting information they needed to identify funding opportunities and trends; funding criteria sometimes specified population levels that limited ability of rural areas to participate; process too lengthy, cumbersome and unclear; funding came with too many restrictions; difficult application process had to be repeated annually; relationship with funding officials became too impersonal, more top-down, or simply non-existent because of amalgamations and cutbacks.

Insufficient human resource and structural capacity to fundraise: Urban organizations have more professional staff, systems and structures in place to facilitate fundraising; efforts made by rural voluntary organizational staff to manage perpetual funding crunch time found to be extremely energy-consuming; few organizations used technology to access information from the government about funding opportunities, reflecting a potential structural barrier to financial capacity.

Relatively small pool of funds available to organizations in rural areas: Non-metro agencies more likely than metro to experience challenges in expanding their funding sources; rural charities cannot raise enough money to be sustainable from within their small communities.

What the researchers found from their analysis of the charitable sector in rural Ontario (from CCRA) – most recent data from 1999:

Some 25,000 registered charities were located in Ontario in 1999, with nearly 5,000 found in rural areas. These charities had combined revenues of over $38 billion, with $1.6 billion going to organizations in rural areas. Yet between 14% and 17% of Ontario residents live in rural.

A greater proportion of rural than urban charities are religious organizations (59%); religious charities traditionally tend to have relatively small revenue bases.

Just over 1 in 5 (21%) rural charities receives government funding, while just over 1 in 4 (26%) urban charities receives government money. BUT…

If you take religious organizations out of the mix, rural charities receive proportionately more of their revenues from government funding than urban charities do.

Rural charities are more likely than urban to report that they engage in religious endeavors and “other community benefits” – agricultural societies, animal protection organizations, community halls, libraries and volunteer fire departments.

Rural charities spend half of what their urban counterparts spend on fundraising; part of the explanation is that a higher proportion of rural charities are religious organizations, which collect gifts and donations in a relatively cost-effective manner.

Rural charities rely on fewer paid staff – nearly 82% have 4 or fewer paid staff.

Rural charities derive 27% of their total income from gifts while urban charities derive 15% of total income from this source.

Rural charities engage in more fundraising activities (36% of rural charities vs 30% of urban charities).

97% of rural charities reported revenues under $1 million compared to just 24% of urban charities.

Only about 5% of rural charities in Ontario are foundations, compared to about 13% of urban charities. All else being equal, charitable foundations are larger than charitable organizations, so this would help to explain why urban charities report a higher level of revenue on average than rural.

Conclusions:

In 1999, Ontario’s charitable organizations took in revenues of more than $38 billion; $1.6 billion of that went to organizations in rural areas. Yet between 14% and 17% of Ontario residents live in rural. Why the discrepancy? This is where the researchers appear to be uncertain – more research is needed. We do know the following, however:

Volunteering in rural Ontario appears to be more evenly spread among the population than is the case with urban Ontario. More people volunteer in rural than in urban areas. Yet rural organizations consistently report problems recruiting volunteers. This finding suggests that the vulnerability of rural volunteering is not because of an aging core of overworked volunteers but might relate more to the activities and skills required. Voluntary organizations in rural areas may have difficulty finding volunteers with skills and abilities they need, e.g., web development.

It’s probably fair to say that rural charities, with fewer paid staff than urban organizations, rely more on volunteers to carry out their programs. Levels of volunteering have been declining since 1997; if they continue to decline, rural charities could be hard pressed to deliver programs given the constrained funding environment facing the entire charitable sector in Ontario.

Rural charitable organizations need to get “plugged in”; technological training is a key element to allow the sector to move forward in the area of financial capacity. Besides technology, there is a need for skill development in proposal writing, strategy development, and program evaluation, so that program impacts and outcomes can be described in funding applications.

Rural voluntary organizations must improve their ability to use networking, processes and infrastructure. In terms of structure, a kind of informal networking exists among rural organizations because so many volunteers work for more than one organization, but there are few formal connections between rural voluntary groups.

The issue of structural capacity goes beyond the organization and into its connections with community: what are the skills that rural volunteers can bring to voluntary organizations? Can a rural charity board member tap into human and capital resources through a corporate connection? Can a rural nonprofit mount a professional fundraising campaign without such skilled and connected volunteers?

At any rate, the research does point to the need to improve the structural capacity of rural voluntary sector. Using the Southern Research Development Initiative (SRDI) as a model for best practices, an association of rural voluntary organizations can act as a “web of institutions” to develop, for example, programs to train volunteers and to improve the financial capacity of voluntary organizations.

What’s next?

This report represents Phase I of the Rural Charitable Research Initiative. Phase 2 will include an analysis of results from the National Survey of Voluntary and Nonprofit Organizations (NSVNO). Consultations will take place with key representatives of the rural voluntary sector to complete the assessment of the rural voluntary sector in Ontario, and to identify specific policy instruments to improve structural capacity.

CCRA data only includes registered charities, which represent only about a third of all the voluntary organizations in the country; although they are most likely indicative of voluntary organizations, it is open to discussion as to what extent we can generalize our findings to the entire voluntary sector.

Further information will be forthcoming from the 2003 CSGVP (formerly NSGVP), which has increased its sample size. This should allow the use of a more precise definition of “rural and small town” for subsequent analysis.

View the full report here. (Requires Adobe)