April 30, 2021
Dear Grantees and Stakeholders,
RE: ANNUAL FUNDING GUIDELINE
Continuing Impact of the Pandemic
At this time last year, we were facing the initial impact of the Coronavirus pandemic. Now, a year later, we are still dealing with the economic and social restrictions put in place to curb the spread of the virus. With vaccines rolling out, there is hope that we will soon be in a position to resume our regular activities and regain some sense of normalcy.
The past year has been extremely challenging for individual Albertans and for the agencies such as yours that serve them. We thank you for your perseverance and willingness to adapt to the ever-changing landscape during these difficult times.
Agencies working in the justice sector across the province have come together to share their experiences – both challenges and successes – and the Foundation appreciates grantees supporting one another as well as the clients they serve. The Foundation will continue to facilitate opportunities for sharing and learning to cope with the new realities, including the need to provide services remotely. Drawing on the experience and expertise of our grantees and other organizations across Canada and the US, our aim is to advance our collective knowledge and understanding of access to justice issues today, and strategies to address them.
The additional challenges brought on by the pandemic have provided further impetus for collaboration and innovation in the justice sector. While the familiar ways of doing our work may now be less feasible, the implementation of ideas that were just surfacing has been accelerated by necessity. Promising new practices are emerging and being adopted and accepted by organizations and clients alike. We urge grantees to embrace these new opportunities and continue to look for ways of applying them to sustain and enhance services to the people you serve.
Last spring, the Foundation assured grantees that it would honour grant commitments made to date. We have done that. Despite the severe reduction in annual revenue from interest on lawyers’ trust accounts, the Foundation has drawn on reserves to sustain continuing program and project grants to the end of 2020.
We appreciate efforts by grantees to exercise fiscal restraint in their grant applications submitted to the Foundation in the last year for funding in 2021 and 2022. We recognize that program delivery details remain fluid as pandemic restrictions are adjusted over time and that programs may require some adjustments in response. However, grantees are reminded that, as provided in the Foundation grant agreement, any material program or project changes and potential budget adjustments are to be discussed with Foundation staff prior to implementation. This assists us in following programs between reporting periods and managing our resources over the course of the year.
Outlook for 2021 and Beyond
Over fiscal 2020-21 the Foundation’s revenue from interest on lawyers’ pooled trust accounts has declined by approximately 80% compared to fiscal 2019-20, reaching its lowest level since 2010. While balances in trust accounts have been maintained at levels similar to the last year, the 1.5% reduction in interest rates by the Bank of Canada in March 2020 has taken a significant toll on Foundation revenues.
To meet the $16.4 million in grants committed in fiscal 2019-20, and to meet its commitment to Legal Aid Alberta, the Foundation has drawn down its reserves in 2020-21 by approximately $16 million. We have developed a five-year revenue forecast to guide our decision-making over the next few years. While the economy is expected to recover slowly over the next few years, interest rates are forecast to remain at current low levels until at least 2023. Accordingly, the Foundation’s revenue is expected to remain flat for the next two years and increase very gradually after that. As a result, the Foundation will have to continue drawing heavily on reserves between 2021 and 2025 solely to keep total grant funding at the same or a slightly lower level compared to recent years.
As noted last year, the Foundation takes a long-term approach to its decisions. To be able to sustain grants for the most vital programs and support innovative developments in access to justice, the Foundation Board is facing difficult decisions about granting funds to new applicants and existing grantees. Some of these decisions have been made in 2020-21, with some grants being reduced compared to past years, and some grant requests being denied. These decisions have not been made lightly and have been guided by the Foundation’s legislated mandate, and board priorities in the context of the legal needs of Albertans and available resources in the sector.
In view of our revenue forecast, to be able to maintain the Foundation’s mandate beyond the next five years, we anticipate that the total level of grant funding will likely have to be reduced further. We therefore encourage grantees to continue exercising fiscal restraint in their operations, and continue efforts to improve access to justice and find cost savings for the future through innovation and collaboration with others in the justice sector.
Yours truly,
Stephanie Dobson, Chair
