Staffing, retention, and government funding: A case study

Abstract This study analyzes the implications of government‐contract funding on the staffing pattern of a nonprofit agency, the Canadian Red Cross, Toronto Region. Furthermore, the study explains the implications of the staffing pattern on services and on the agency's organization. Staffing is one area that the literature on nonprofit organizations has not adequately addressed. The findings indicate that contract‐based funding leads to the hiring of temporary staff and affects the retention of employees. Although contract funding has some benefits, temporary staffing is detrimental to the agency's services. It affects not only employee recruitment and retention but also training. The results highlight how change in government funding from grants to contracts resulted in the agency's new staffing strategy and ultimately reduced the effectiveness of the services the agency provided to the community.