From shopping to social innovation: Getting public financing right in Canada

Governments are an important source of funding for the nonprofit and voluntary sector. Yet, the use of funding instruments is conditioned by the political and institutional context. This paper proposes three financing models – charity, welfare state and citizenship – which capture the link between the choice of public financing and the broader institutional context. The financing models are then used to examine the evolution of funding patterns in Canada. We argue that the evolution of financing models in Canada has gradually constrained instrument choice and more importantly, a market-oriented application of funding instruments has dominated the financing debates at the expense of a broader focus on preconditions of applying the instruments effectively. As a result, funding instruments in Canada are poorly suited for fostering innovation and investing in capacity development in the voluntary sector.