Your 12-Step Guide to Addressing Charity Challenges

The Canadian Special Senate Committee on the Charitable Sector heard presentations this week. A lot was put forward, a significant amount of that having to do with fundraising, less so on how charities can have a more lasting impact. I don’t mind admitting that I wasn’t invited to appear and I confess to not knowing how one gets invited to a Special Senate Committee. But I plan to be more on top of that in the future. The Senate has helpfully posted some guidelines so perhaps I can figure it out. Nonetheless, I am now offering up a humble two cents worth of ideas for improving the sector’s health and effectiveness.

The good news is that instruments of improvement are all in front of us. The bad news? The tools are laying idle. But there’s hope. Here’s your 12-Step Guide to Addressing Charity Challenges, in no particular order:

1. Understand that charities are about more than donations. Look at the actual work charities do and how they can be supported to supply data on the issues the people they serve are confronting. Charities should be their voice. Use that empirical data to influence public policy for the common good.  Angus Deaton, a 2015 Nobel Prize recipient in economics has repeatedly written about how reliable data is vital in understanding inequity. “High quality, open, transparent, and uncensored data are needed to support democracy,” he says. Government can support charities in the collection of data, emphasizing the data that helps us get to root causes and the creation of better public policy. That means asking the right questions.

2. Engage in fostering political solutions by undertaking non-partisan political activity. Only 500 charities report undertaking political activities spending around $25 million a year. Given the urgent issues of the day, developing a plan on how to influence public policy, beyond tax credits that help wealthy donors, seems important. CRA guidelines allow charities to spend 10% of their annual revenue on political activities. They spend a small fraction of that. And allowing charities to spend an unlimited amount of money on political activity, as a recent Ontario court case decided, is unnecessary, and has profound and negative implications for the country.  Check out an analysis of the court case here.

3. Improve overall working conditions in charities. All charities are not created equal. If you’re working in a hospital foundation or for a university, your working conditions are, most likely, among the best in the country. Your salary is well above the national average, your benefits are good and part time work is the exception rather than the rule. But if you work further down the charity food chain, you are very likely working in an environment where up to 40% of your co-workers are part time (the national average is 19% part time workers). The average salary is just over $44,000. (The national average is $49,000.)  Staff development, annual professional development goal setting and enlightened management are more likely to be concepts rather than reality. Each individual charity needs to evaluate its workforce, determine if the structure is working for employees, beneficiaries of the charity and the overall mission. Are you making progress? “Doing good” for others by “not doing good” for your own employees is not making the world a better place. It’s using the concept of charity for exploitation.

4. Change the rules around endowment funds. Donors should not be able to get all the benefit of a tax credit while insisting the charity not spend their donation.  At the very least, in the case of endowments, donors should only get the tax creditable amount of the annual pay-out as it’s paid out.  As it is now, we’re now giving away public money in the form of tax credits to keep private money in a fund unused and unavailable.

5. Set the medical research priorities funded by tax-credited private donations  in a way that is more accountable to the Canadian public and is more reflective of public health needs. Let me be clear. People can donate to whatever they want in whatever amount. But receiving a tax credit for it is another issue.

6. Have government (and “charity standards” organizations) de-bunk the nonsense of 15% administrative costs once and for all. The definition should be opened up to include developing long term strategy, evaluation, data gathering, results sharing and staff development.

7. Require Board members of all charities to complete a course to ensure they understand the responsibilities of being a member of a board of directors and the basics of the sector they are operating in. It would be online and similar to “Smart Serve” for bartenders.

8. Have government issue a clear policy about the independence of international NGOs. Too many international aid workers are being killed. Helping to create an environment where they are not targeted as proxies for the countries they represent is critical.

9. Do as Mark Blumberg recommended in his 2016 Submission to the House of Commons Standing Committee on Finance and require charities to demonstrate annually in their reporting (as in the UK) that they actually have a “public benefit,” rather than the public benefit being assumed. As Blumberg says, it could help the sector tremendously by increasing public confidence and reducing the number of dormant charities.

10. Have the federal government fund a mechanism through which the charity sector can get a grip on its relationship to government and broader public policy goals (as opposed to boutique tax credits). A road map exists for this. In the early 2000’s a pact was signed between what was then called the National Voluntary Initiative and the Canadian government. It was called A Code of Good Practice on Policy Dialogue. The U.K. has a similar compact, The U.K. Compact, that was developed in 1998 and updated in 2010. In my book, Cap in Hand: How Charities are Failing the People of Canada and the World, I quoted that, “the commitment of the voluntary sector at that time was to continue to identify important or emerging issues and trends in communities, and act on them or bring them to the attention of the Government of Canada; and serve as a means for the voices and views of all parts of the voluntary sector to be represented to and heard by the Government of Canada, ensuring that the full depth and diversity of the sector is reached
 and engaged. From 2003—2005, some of the recommendations from Phase One were implemented, and reforms for registered charities were made, but by the end of 2005, the federal government was on an election footing and, as the new Conservative government came to power, the political will behind the project was lost, as was the will of the sector to claim the territory that went with its stated responsibility to bring issues to the attention of government.”

11. Support improved media coverage of the sector.Charities need to be covered like the business it is, reporting on it beyond press conferences about “miracle cures” and fundraising campaigns.

12. Understand that the growing gap between the rich and poor is buffeting the charitable sector in Canada and around the world. Wealthy charities are successfully influencing the direction of the sector through a keen focus on tax benefits and regulations that allows them to stay wealthy and attract more wealth. Philanthropy supplies 6% or 7% of the sector’s total revenue in Canada.  The power of philanthropists to direct sector priorities and use it as one of a selection of ways to reduce taxes, taxes which pay for services all Canadians need, leaves 99% of charities in increasingly difficult and stressful positions.

Gail Picco is an award-winning charity strategist widely recognized as one of Canada’s foremost experts on how to carve a path through the increasingly complex dynamics of the charitable sector. Civil Sector Press published her latest book, Cap in Hand: How Charities are Failing the People of Canada and the World, in 2017. http://www.gailpicco.com