An ONN policy paper series

Protecting community assets through nonprofits

We often take community assets for granted- until they are gone.

In Canada, we have an effective partnership between the nonprofit sector and government to build and service community infrastructure. Community assets, such as hospitals, seniors homes, child care centres, recreation facilities, affordable housing and friendship centres, serve people locally and are accountable to communities through their volunteer boards of directors.

However, over the past two decades, large for-profit chains have persuasively presented themselves as better-positioned to provide these local services and the facilities that house them.

The results are alarming.

Countries such as the United Kingdom and Australia have begun massive transfers of community assets to the for-profit sector, as well as here in Canada. These private sector partnerships with government to build and deliver essential services have failed. In Ontario, the growth of corporate chains in the long-term care system had been happening largely out of the public eye until COVID-19 illuminated the devastating impact of profit over quality and safety of services.

Privatization takes profit out of communities and sends it to shareholders. Service quality plummets and job quality suffers with the push to increase business earnings. In many instances, private investors operate these facilities with operating funds from the government. This makes a great investment opportunity, and opens the risk of a for-profit company being leveraged for debt and abandoned by its parent corporation as a write-off. Clients are left in the lurch, like seniors or those in assisted living, and governments have to scramble to maintain vital services.

At the core of their business model, nonprofits serve communities and stay in communities, reinvesting any surpluses to strengthen local economies, labour markets, and community connections.

This three-part series focuses on what we risk losing in our communities through the privatization of community services and assets. We also provide policy solutions and alternative models to for-profit corporate chains.

Government must channel precious public dollars toward nonprofit coordination and delivery in our local communities, not for shareholder dividends. Nonprofits have the local knowledge, track records and mandates to deliver.

Read the first and second policy papers in the series by clicking on the links below. The third policy paper to be released soon. Stay tuned!

Not for Sale: The case for nonprofit ownership of community infrastructure and services
Keeping human services in community hands: Why nonprofits deliver better
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