What is the NFR 10-Year Grant for Indigenous NPOs?
The NFR 10-Year Grant, currently including 28 programs, is a funding mechanism that provides more flexibility and predictability in how an Indigenous NPO uses its funding to address its needs and priorities.
The NFR 10-Year Grant allows Indigenous NPOs to:
- better manage finances over a longer period to meet changing community needs,
- keep unspent funds (no claw-backs of surplus funds at year end), and
- reduce the amount of reporting and resources needed to manage finances.
How is the FMB Involved?
Indigenous Services Canada (ISC) and the Assembly of First Nations (AFN) co-developed the NFR 10-Year Grant based on recommendations from the report A New Approach: Co-development of a New Fiscal Relationship between Canada and First Nations. The FMB’s and finance practices were chosen as the framework for the grant.
Through a Memorandum of Understanding signed on November 6, 2018, the FMB agreed to assess whether Indigenous NPOs expressing interest in the NFR 10-Year Grant meet the eligibility criteria.
The FMB uses its NFR 10-Year Grant Eligibility and Guidelines to do this work. The final decision on whether a grant is offered to an Indigenous NPO remains with ISC.
How the FMB Supports Indigenous NPOs
The FMB:
- provides advice and support, as well as access to tools developed by the FMB, during the NFR 10-Year Grant funding application process;
- supports the development of policies on financial administration;
- confirms that the Indigenous NPO’s financial administration policies meet the grant eligibility criteria;
- analyzes the financial performance of Indigenous NPOs and confirms whether grant eligibility criteria is met;
- prepares and issues compliance opinion reports on grant eligibility to ISC;
- provides access to tools and templates developed by the FMB to assist Indigenous NPOs in developing policies on financial administration;
- provides Capacity Development services to Indigenous NPOs to support continued grant eligibility; and
- conducts procedures to determine the extent to which minimum provisions of financial administration policies have been implemented.
All of the FMB’s services are provided at no cost to Indigenous NPOs.
Pathway to New Fiscal Relationship 10-Year Grant Funding for Indigenous NPOs
To enter into a New Fiscal Relationship (“NFR”) 10-Year Grant agreement, an Indigenous Not-for-Profit Organization (“NPO”) must meet the eligibility criteria co-developed by Indigenous Services Canada, the Assembly of First Nations and the FMB. There are eligibility criteria to be met in the areas of:
- Policy on Financial Administration
- Financial Performance
The FMB will provide reports to Indigenous Services Canada confirming that the Indigenous NPO has met the NPO Policy on Financial Administration and Financial Performance eligibility criteria for the NFR 10-Year Grant. Indigenous Services Canada makes all final decisions on grant eligibility and whether to offer a grant.
NPO Policy on Financial Administration
In order to be eligible for the NFR 10-Year Grant, an Indigenous NPO must have a policy on financial administration that meets the grant eligibility on financial administration policies and that brings into force certain minimum provisions. More information on the minimum provisions can be found in Indigenous Services Canada’s sample Comprehensive Funding Agreement model.
Following signing of the grant agreement, Indigenous NPOs will be asked to demonstrate that these minimum provisions have been brought to life.
Sample NPO Policy on Financial Administration:
- the FMB will support your Indigenous NPO throughout the policy development process
- a sample NPO Policy on Financial Administration for the NFR 10-Year Grant is available for Indigenous NPOs to adopt
- the NPO Policy on Financial Administration only comes into effect if the Indigenous NPO enters into NFR 10-Year Grant agreement with Indigenous Services Canada
- the FMB’s sample NPO Policy on Financial Administration is intended to be a guiding policy for Indigenous NPO’s governing body to complement their existing policies and build out a sound financial management system
- the FMB’s sample NPO Policy on Financial Administration is not intended to replace or supersede Indigenous NPO’s existing policies and procedures.
How the FMB Supports Indigenous NPO During the NFR 10-Year Grant Journey
- provide advice and support, as well as access to FMB-developed tools, during the NFR 10-Year Grant funding application process
- support the development of NPO Policy on Financial Administration
- confirm that the NPO Policy on Financial Administration meets the grant eligibility criteria
- analyze the financial performance of Indigenous NPOs and confirm whether grant eligibility criteria is met
- prepare and issue compliance opinion reports on grant eligibility to Indigenous Services Canada.
All FMB services are provided at no cost to Indigenous NPOs.
How to Apply
To apply for an NFR 10-Year Grant, an interested Indigenous NPO must:
- provide a written “Expression of Interest” to your regional Indigenous Services Canada representative. Also send a copy to the FMB
- work with the FMB to adopt a Policy on Financial Administration; The FMB will confirm that the Policy on Financial Administration is consistent with NFR 10-Year Grant eligibility criteria
- provide audited for the past five years to the FMB. The FMB will evaluate whether the NPO meets five Financial Performance Ratios and the NFR 10-Year Grant eligibility criteria.
Please provide your written Expression of Interest and audited financial statements using the webform below.
Apply for a NFR 10-Year Grant
The FMB will provide reports to Indigenous Services Canada confirming that the NPO has met the Financial Administration and Financial Performance eligibility criteria for the NFR 10-Year Grant. Indigenous Services Canada makes all final decisions on grant eligibility and whether to offer a grant.
To ensure all NPOs have a chance to access 10-Year Grants over time, Indigenous Services Canada will issue annual calls for expressions of interest in the 10-Year Grants. NPOs who expressed interest in a previous year but did not complete the steps for qualifying, or who qualified but did not opt into the grant, must express interest again in order to be considered for next year. If the NPO met the eligibility criteria, but did not opt in, the FMB will work with the NPO to re-confirm eligibility to Indigenous Services Canada for the next year.
Indigenous NPOs: Implementation Testing and Grant Monitoring
The New Fiscal Relationship (NFR) 10-Year Grant Comprehensive Funding Agreement signed between an Indigenous Not-for-Profit Organization (NPO) and Indigenous Services Canada, requires certain minimum provisions of an Indigenous NPO’s Policy on Financial Administration to be brought to life. As part of the Memorandum of Understanding dated November 6, 2018 between the FMB, the Minister of Indigenous Services, and the Minister of Crown-Indigenous Relations, the FMB has agreed to perform testing of the implementation of these minimum provisions using an approach co-developed by Indigenous Services Canada, the FMB, and the Assembly of First Nations.
This implementation testing will be performed by the FMB, at the request of the NPO, 12-18 months after the effective date of the NFR 10-Year Grant agreement (or, exceptionally, as mutually agreed by Indigenous Services Canada, FMB and the Indigenous NPO). The approach involves the FMB conducting a set of standardized procedures that have been agreed upon with Indigenous Services Canada. FMB’s report on the findings from the procedures will allow both the Indigenous NPO and Indigenous Services Canada to determine to what extent the required provisions on the NPO Policy on Financial Administration have been brought to life. The results are intended to inform and contribute to meaningful capacity development discussions between grant recipients, Indigenous Services Canada, and the FMB.
Implementation testing will be conducted remotely and will require the FMB to collect a variety of electronic records and interview key management personnel. This work will be scheduled at a time that is mutually agreeable and in a way that minimizes any disruption to the Indigenous NPO.
Exemption to Implementation Testing for Indigenous NPO with a NPO Standards Financial Management System Compliance Opinion from FMB
Grant recipients with a NPO Financial Management System Compliance Opinion from the FMB will not be required to undergo the implementation testing. Indigenous NPOs who have a NPO Standards Financial Management System Compliance Opinion have already demonstrated implementation of their policies and procedures on financial administration and compliance with FMB’s NPO Standards. This exemption demonstrates the value of the NPO Standards Financial Management System Compliance Opinion and avoids duplication of testing.
The exemption from implementation testing for Indigenous NPOs with a NPO Standards Financial Management System Compliance Opinion will be subject to receipt by Indigenous Services Canada of a report from the FMB confirming details about the NPO Standards Financial Management System Compliance Opinion, along with a signed letter from the Indigenous NPO (to be collected by FMB) confirming that the financial management systems related to the grant eligibility provisions remain in place.
Annual Grant Monitoring
As part of the Memorandum of Understanding dated November 6, 2018 between the FMB, the Minister of Indigenous Services, and the Minister of Crown-Indigenous Relations, the FMB has agreed to provide NFR 10-Year Grant monitoring services to Indigenous Services Canada. This monitoring approach has been co-developed by Indigenous Services Canada, the FMB and the Assembly of First Nations.
On an annual basis, the FMB will perform a limited scope review of a grant recipient’s financial performance that will include:
- Review of the Indigenous NPO’s annual financial statements and accompanying ’s Report;
- Conduct a ‘roll-forward’ and recalculation of the five Financial Performance Ratios used for initial grant eligibility; and
- Calculate a preliminary risk rating to guide further discussions between Indigenous Services Canada and the Indigenous NPO.
By reviewing the annual financial statements and the corresponding Independent Auditor’s Report, the FMB has developed a model that will identify the existence of potential risk factors. These risk factors will allow a multi-tiered approach to be used when the FMB is communicating monitoring results to Indigenous Services Canada. These tiered risk ratings are intended to inform and contribute to meaningful capacity development discussions between grant recipients, Indigenous Services Canada and the FMB.
The FMB’s Monitoring Framework and Policies and Guidelines will be used to do this work.
Financial Performance Review
In order to be eligible for the NFR 10-Year Grant, an Indigenous NPO must demonstrate that it meets five selected Financial Performance Ratios.
The Indigenous NPO will need to send the FMB its most recent 5 years of audited financial statements. FMB staff will review the financial statements and use them to calculate the Financial Performance Ratios.
Financial Performance Ratios for Grant Eligibility
The FMB will look at five ratios during its financial performance review of a Not-for-Profit Organization (“NPO”) to determine grant eligibility. These ratios are calculated using information from the NPO’s audited financial statements for the past five years.
Fiscal Growth Ratio (FGR):
The FGR measures a NPO’s ability to sustain and grow its revenues.
Thresholds – The NPO demonstrates that its average FGR for the period under review is not lower than -5.0%.
Operating Margin Ratio (OMR):
The OMR measures a NPO’s ability to balance its revenues and expenses to maintain operations.
Thresholds – The NPO demonstrates that its OMR for the period under review is not lower than -5.0%.
Asset Maintenance Ratio (AMR)*:
The AMR assesses if a NPO is investing enough to maintain its existing capital assets and add new assets as they are required.
Thresholds – The NPO demonstrates that its AMR for the period under review is not lower than 100.0%.
*AMR applies only to NPOs where all its tangible capital assets have a total value exceeding $500,000 in original cost.
Ratio (NDR):
The NDR measures a NPO’s ability to manage its overall level of .
Thresholds – The NPO demonstrates that its weighted average NDR for the period under review does not exceed 60.0% or that its NDR for the most recent year of the period under review does not exceed 60.0%.
Interest Expense Ratio (IER):
The IER measures a NPO’s ability to manage the interest payments on its debt.
Thresholds – The NPO demonstrates that its IER for the period under review does not exceed 5.0%.
Contact
Please contact FMB at 1-877-925-6665 or send a message below for more details about the New Fiscal Relationship 10-Year Grant eligibility criteria and getting started.
For other information or questions on New Fiscal Relationship 10-Year Grants, reach out to your regional ISC representative.