Innovation by necessity: How non-profits can thrive in a new world

To thrive, Canada’s non-profit organizations need to get future-ready. The stakes are high. The health of Canada’s non-profit sector is critical to both our social fabric and economic prosperity.

Non-profit institutions contributed 8.3% of Canada’s GDP in 2023 and employ some 2.8 million people, according to Statistics Canada. These workers provide social services, work in hospitals and research institutes, and run literacy programs, art festivals, and sports clubs.

At this time of economic uncertainty, non-profits face significant challenges. While demand for frontline services like housing assistance and food security is rising, donations (of both time and money) are falling. This makes it more difficult for non-profits to retain talent, as burnout rates spike among staff members, who leave in search of greater pay and less stress.

“Those of us in the social purpose sector are innovating all the time. But innovation becomes more essential the farther we feel we are from the reality that we want. And that’s why I think there’s so much talk of innovation right now,” says Danya Pastuszek, who works with social purpose organizations across Canada as the president and CEO of the Tamarack Institute.

Build resilient teams

Nonprofits are built to serve their clients, but they mustn’t lose sight of their own people along the way. In Canada, one in four non-profit workers is experiencing burnout “often” or “extremely often,” according to a 2024 report by YMCA WorkWell. Furthermore, one in five non-profit employees said they are considering leaving their role in the following six months.

Turning this trend around is possible, by emphasizing a culture of connection and recognition. Some employees have been with the Vegreville Association for Living in Dignity (VALID) for more than 35 years, supporting individuals with developmental disabilities. VALID is one of the largest employers in Vegreville, Alberta, with up to 75 staff members.

Lana Syms, VALID’s executive director, attributes these decades-long careers to a strong administrative team that focuses on recruitment and retention strategies. In her role, she makes sure to be on-site and get to know the employees and their responsibilities.

“We want to make sure that our staff feel supported. We have good benefits. We provide training. We make sure that our doors are always open,” she says.

Sometimes, a burnt-out staff member will approach Syms to talk about quitting; she makes sure they know all their options.

“I tell them, there are a lot of options besides quitting. You can get a doctor’s note. You can go on medical leave. There’s short-term disability, there’s long-term disability. Sometimes they don’t understand how those things work, or they’re afraid to ask.”

With this type of counseling, even employees who need to leave their job temporarily know the door is open to return. After all, non-profit workers are a particularly dedicated group.

“People who come into this sector come for purpose. They come because they care,” Pastuszek says. “Helping people see their contributions goes a long way.”

Have your financial house in order

To have room to maneuver in an uncertain economy, every non-profit should have its financial house in order.

Pastuszek sees this push toward long-term, results-aligned fiscal strategy happening with local non-profits across Canada. Unfortunately, many are stymied by a lack of resources that’s all too common in the sector: talent and technology are expensive.

“If we could support nonprofits to have better, more affordable tools and skillsets around financial management, it could be a big unlock for the durability of organizations.”

Syms recalls that many years ago, VALID was overspending and struggling financially.

“It took a huge effort on the part of many people to turn that around, and I fortunately inherited a very strong financial organization, and I’ve kept it strong.”

Invest for the future

When VALID achieved a strong fiscal position, it became possible to make strategic investments to strengthen its long-term position. For example, it now owns the group homes that it operates. VALID also shifted from paper to electronic systems.

Syms says, “These types of innovations create efficiencies within the operational side of things, and it frees up our time to then focus on supporting the individuals instead of doing administrative paperwork.”

The Ontario Nonprofit Network has found adoption of AI is growing significantly in the non-profit sector, with 83% of participants using AI tools in 2025. The accessibility of free-to-use AI systems has facilitated this growth; the majority of people use but only a few leverages AI for advanced functions like donor prospecting or behaviour prediction, with generative AI dominating usage.

“I see people using it for daily productivity, and to address the underlaying causes of poverty, in its many forms,” Pastuszek says. “In Chatham Kent, for example, Vision Us – a long time Communities Ending Poverty member – is using AI for community engagement, to address systemic barriers to employment, and more.”

Explore new revenue sources

Non-profit leaders should think outside the box to address the decline of traditional fundraising and grant support. This could mean offering corporate training sessions or leveraging real estate assets like an underused parking lot. It’s not one-size-fits-all.

For Tamarack, over a third of its revenue now comes from earned revenue via consulting and skill-building courses that individuals and groups can sign up to attend.

“Recurring revenue creates the predictability that offers the freedom to innovate and the freedom to pursue complex work on the timelines that are actually required,” Pastuszek says. “The work is figuring out, given your relationships, your goals, your context, what’s the revenue strategy and what’s the amount of recurring revenue that you can anticipate today for that work?”

VALID owns and operates a thrift store and 22 local vending machines, which bring in cash without asking for a donation. This approach is a good fit for them, because as part of their work with individuals with developmental disabilities, they now have built-in work opportunities for them.

“It helps offset some of the expenses that the government doesn’t cover,” Syms says.

Not surviving, but thriving

Canadian non-profits that take the time to review their situations and reinvent will be best placed to serve their people and their community. When non-profits meet the moment and thrive, it will lead to broader economic benefits for the whole country.