The period of April 1, 2020 to March 31, 2021 was a very active one for our organization.
Not only did this year feature our response to the COVID-19 pandemic and increased investments in community, it also saw the implementation of pre-planned operational changes. As a reflection of these activities, our financial statements look a bit different than they did last year. We’ll explain each of the key elements in more detail below.
The timing of our fiscal year has changed
We changed our fiscal year to better align with our fundraising and funding cycles. Previously, our fiscal year ran from January 1 to December 31. In 2020, we moved to a March 31 year end. This change resulted in a three-month stub period, also disclosed in the financial statements.
Our community investments included pandemic relief
One of the ways we create lasting social change is by providing funding. This time last year, we reported on three types of community funding: 1. Program funding to address short-term community needs, 2. Project funding to help create long-term solutions to local poverty, and 3. Community investments chosen by our donors (designations).
This year, we added a fourth type of community investment to that list: emergency COVID-19 relief funding, which was disbursed on four separate occasions between April and December 2020. We’re proud to have been able to fulfill our mission of bringing donors, partners and volunteers together, even in the most unexpected circumstances.
Together, we helped provide healthy meals, safe shelter and crucial connection to those who needed it most, as urgently as ever.
Our operating costs temporarily decreased
Based on our 2020-21 audited financial statements, 86 cents from every dollar raised is invested in community programs and supports. The remaining 14 cents is allocated to operations, making sure our impact, local expertise, donor experience, and financial management continue at a high rate of excellence.
This ratio is different than what it has been in recent years, with lower operating costs as a percentage of revenue. The main reasons for that are:
- We received $4.2 million from the provincial and federal government for COVID relief. This was unprecedented and the total amount includes: community investments; between 5-10% allocation to our operating costs, so we could manage, invest and evaluate the impacts of those investments; and, the Canada Wage Subsidy.
- COVID impacted the way we work. Even though we made new investments in taking everything we do online, we still saved money because the year was so different than what we had planned.
Our accounting practices changed
In 2020-21, we moved to cash-based accounting in the recognition of our donations. This means we only counted donations that were received (rather than pledged or anticipated) by the end of the fiscal year. We previously used pledge-based accounting. This means that when people made pledges (like gifts through their payroll deduction for the upcoming year), we counted those dollars in anticipation of using them to fund programs.
Cash-based accounting is becoming a more common practice for non-profit organizations because it helps mitigate financial risks and improve the stability of the organization. That’s why we made the change. This type of adaptability is one of the reasons donors have trusted us for decades – and can continue to do so.
We improved the sustainability of our organization
Because of the reduced operating expenses and government funding mentioned above, we ended the fiscal year with a surplus. We took this as an opportunity to improve the sustainability and reduce the risk of our organization, by allocating those funds to our funding commitments for the period of April 1, 2021 to March 31, 2022.
Having adequate funds on hand to meet upcoming commitments improves our cash flow and sustainability. This makes us an even stronger community partner and reliable, trustworthy funder.
We are always fundraising to invest as much in poverty solutions as we can. And now we have a longer sightline on our financial projections, risks, opportunities and commitments.
The impact of our Neighbourhood Kitchen Fund is underway, and will continue for years to come.
A creative fundraising initiative helped bridge the digital divide for people in HRM during the pandemic.
Every year we create opportunities for community members to be heard. We can't imagine ourselves working without them.
United Way Halifax was a proud partner in North-End Halifax's Every One Every Day pilot project.
We promise to be excellent stewards and investors of your donations. Let's look back at how that happened in 2020-21.
The next few years at United Way Halifax will be shaped by our next strategic plan.