Why Won't Social Services Talk About Money?

There are plenty of reasons a strategic plan can stall in implementation. In social service organizations, one of the more overlooked ones is that the financial implications of the strategy were never really brought into the conversation.

I want to be specific about the organizations I’m talking about here. My experience is primarily with social service organizations that receive significant government funding, alongside some combination of fee-for-service revenue, fundraising and donations. That creates a different financial context than an organization funded mainly through charitable giving because there is real accountability for public dollars, often with very specific expectations about how those dollars can be used.

And within that context, money can become an uncomfortable conversation.

Why Money Gets Complicated

I’ve spent much of my career working in leadership roles inside social services, and I’ve seen this tension repeatedly.

Leaders are usually very comfortable talking about quality, access, outcomes, staffing and the needs of the people they serve. Conversations about surplus, margins, pricing or whether a program is actually covering its costs can be much harder.

I once had a leader say to me, “We’re not a corporation here. We’re not in this to make money.”

The problem was that the program we were discussing couldn’t cover its costs.

I understood the concern. Social service organizations should be thinking carefully about stewardship, accessibility and the responsible use of taxpayer dollars. Nobody wants to be perceived as making money from vulnerable people or prioritizing revenue over mission.

But financial sustainability and profiteering are not the same thing.

If a program costs more to deliver than it brings in, the difference has to come from somewhere. Another funding source may subsidize it, fundraising may cover part of the cost, or the organization may decide that absorbing the loss is justified because the service is central to its mission.

Any of those can be reasonable decisions, but they need to be deliberate ones.

I’ve seen the same tension show up when fee-for-service rates need to increase. Senior leaders may understand that wages, benefits and operating costs have gone up, while managers or frontline staff see the increase as “jacking up the price” or trying to make money from families.

Accessibility absolutely belongs in that conversation. So does another question: what does it actually cost us to provide this service responsibly?

Financial Thinking Is Part of Strategy

There is evidence that the information nonprofit leaders use matters. A national study of several hundred U.S. nonprofit social service organizations found a positive relationship between the range of performance measures organizations used and the effectiveness of their strategic decision-making. Funding diversity and effective governance were also associated with stronger strategic decisions.

I don’t take that to mean another dashboard will fix your strategy.

Financial planning isn't a separate appendix — it's what turns a wish list into an executable strategy.

The more useful point is that leaders make better strategic decisions when they regularly look at information that tests whether their assumptions still hold. Financial information needs to be part of that.

Research on the “nonprofit starvation cycle” is also relevant here. Nonprofits have long operated under pressure to demonstrate low overhead, even though underinvesting in staffing, systems, infrastructure and organizational capacity can weaken the organization’s ability to deliver its mission.

That tension matters because frugality can easily become confused with good stewardship.

They are not always the same thing.

Some of the Pressure Is Structural

It’s also important not to imply that every financially stressed social service organization simply needs to make better decisions.

Ontario’s nonprofit sector is under significant pressure. The Ontario Nonprofit Network’s 2025 State of the Sector data showed that 85 per cent of organizations were experiencing increased demand for programs and services, while only 20 per cent reported being able to meet that demand. Seventeen per cent had discontinued programs or services, and roughly two-thirds had scaled services back.

Sometimes organizations have avoided difficult financial conversations. Sometimes government funding genuinely has not kept pace with demand and the actual cost of providing services.

Often, both are true.

Better strategy cannot manufacture funding that doesn’t exist. What it can do is help leaders see financial pressure earlier, understand the trade-offs and make deliberate decisions before a funding change or deficit makes the decision for them.

What Should Actually Be in the Plan?

I regularly see strategic plans filled with priorities, goals and KPIs while the financial reality sits somewhere else entirely.

Those two things need to be much closer together.

For every major strategic priority, leadership should know what it is expected to cost, where the funding will come from, how dependent it is on a particular revenue source, and what assumptions are being made about staffing, demand and operating costs.

If a program is intentionally being subsidized because it advances the mission, say that. If a new priority depends on funding that hasn’t been secured, say that too.

The same goes for growth. If expanding a service increases demand faster than the organization can build staffing and infrastructure, that may not actually be responsible growth.

And organizations need criteria for saying no: no to funding that pulls them away from mission, no to programs they can no longer sustain, and no to growth opportunities that create more financial risk than capacity.

Those decisions are much harder when the criteria are invented in the middle of a crisis.

A Simple Test

If you’re wondering whether financial thinking is genuinely part of your strategy, choose one significant program and ask your leadership team what would happen over the next twelve months if its primary funding source dropped by 20 per cent.

• Do you know what the financial impact would be?

• Do you know what you would protect first?

• Do you know what could change?

• Do you know who would make those decisions?

If nobody can answer those questions, the problem isn’t that your organization cares too much about mission. It’s that financial thinking hasn’t made its way far enough into the strategy.