Nonprofit Sector: Loans Will Not Solve “Serious” Financial Problems – The Royal Gazette

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The 2021 Speech from the Throne: David Burt, Prime Minister (file photo by Akil Simmons)

An association of charitable leaders said loans were not the answer for strained third sector organizations.

The Bermuda Nonprofit Alliance Outreach Working Group added that better data collection and information sharing could improve performance on the ground.

His comments came after the government announced its intention to work with the island’s lenders “to provide financial assistance, loans and mortgages to religious communities and third sector entities.”

A collective statement from the NAB task force said that “loans are not the solution that nonprofits are looking for, except maybe for unique needs or projects.”

He added: “Loans have to be repaid, which has the effect of diverting future funding from the management of programs and services.

“It is even more difficult if the financing is to be oriented towards servicing the debt, which donors are unlikely to finance. “

The statement added, “Nonprofits benefit from flexible multi-year grants that support their ability to plan and manage financially for sustainability.

“It could also be extremely valuable for the entire third sector, including nonprofits, donors and government, to have better data on the third sector landscape.

“The Registrar is currently regulating nonprofits and capturing important data on how the sector operates.

“There is a great opportunity for nonprofits and the Registrar to collaborate on how to improve the functions of data collection and information sharing so that we can all better understand the state of the industry and use this data to seek opportunities for improvement across the industry. “

The group supported comments by Major Rob Kerr, the Salvation Army’s commanding officer for Bermuda, who said last week that help providing loans or mortgages to the third sector would not be “too helpful.” to his charity.

Rena Lalgie, the governor, who delivered the Speech from the Throne on behalf of the government last Friday, said “Third Sector charities have filled the void in people’s lives and, along with frontline healthcare workers , have brought relief to many people “.

She added, “This mission has been carried out with love and with genuine care and concern, masking the fact that these organizations themselves are in dire financial straits. “

The Nonprofit Alliance is a group of leaders of nonprofit organizations committed to working together to improve the impact of nonprofits and promote their value.

Its NAB Awareness Working Group said: “Bermuda’s nonprofits have been at the forefront of the pandemic, helping, supporting and uplifting the community when people needed it most.

“The government has further noted the pressure on the sector, which accurately reflects the current state of the non-profit sector.

“In some cases, nonprofits face significant financial pressure that should be of concern to Bermuda.

“Our non-profit organizations provide essential services that contribute to Bermuda’s basic social safety net and enhance the well-being of the community.

“They provide services which in some cases should be the responsibility of government and which in other countries are funded by government contracts and service charges.”

His statement added: “Currently, the government provides less funding to nonprofits than in other countries such as the UK, US and Canada.

“In the United States, about 30 percent of the nonprofit sector’s revenue comes from government-funded grants, contracts or service fees.

“In the UK, government contracts and grants account for almost 40% of industry revenue.

“In Canada, the government accounts for 20 percent of the sector’s revenue sources.

“In Bermuda, Wavecrest data for 2020 showed that only 8% of revenue came from government sources.

“Overall, nonprofits in Bermuda are less supported by the government than in other countries, so it is good news that the government is keen to support the financial sustainability of the sector more. “

David Burt, the prime minister, said Monday he will work with the board of directors of the Bermuda Economic Development Corporation to see how he can support religious communities and the island’s third sector.

He added: “Some churches and charities are in trouble.

“The very people that the pandemic has affected are at the heart of these institutions, and the donors who have historically supported them have reduced capacity to do so.

“During curfews and shelter-in-place, many congregations drew their strength from broadcasts and other new forms of outreach.

“The dedication of these sectors must be respected and supported.

“By working together, we can help them get through this time and, like others receiving help, come out stronger. “

The government has been contacted for further comments.

* To read the full comments from the Bermuda Nonprofit Alliance Outreach Working Group, click on the PDF under “Related Media”. For more information on the Nonprofit Alliance, seethis www.iacbermuda.org/nab.

* To read the 2020 State of the Nonprofit Sector report from Wavecrest, an advisory group, click on the PDF under “Related Media.”


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