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Canada’s Charitable Sector: Then and Now

Tuesday, July 7, 2015
Guest Writers
Patrick Johnston
Then and now: Clock face half black and half white

As Board Chair of CanadaHelps, I joined with Imagine Canada and other sector colleagues in mid-May for a Day on Parliament Hill. We were a diverse group with a common agenda; raise the profile of the charitable sector and build relationships with parliamentarians.

It was not the first time that I had participated in similar advocacy activities in Ottawa. In fact, this year’s event fell almost exactly twenty years to the day after I assumed the position of President and CEO of the Canadian Centre for Philanthropy — a predecessor of Imagine Canada.

This happy coincidence gave me pause to consider what had changed in the sector since 1995, and what hadn’t. The list on both sides of the equation is long so I’ll simply identify those I think are the most significant. First, I’ll pinpoint the three biggest changes.

Financing

Generating sufficient revenue remains the primary concern of sector organizations. But the discussion today is much richer, deeper and nuanced. In the past, we talked almost exclusively about “funding” — meaning government grants and charitable donations. Today we talk of “financing” and concepts such as social enterprise, social impact bonds and impact investing. Our understanding of the range of tools available to finance the work of sector organizations has broadened significantly.

Impact

The pressure to demonstrate impact is much greater today and it is often being driven by funders — whether individual, philanthropic or government. Twenty years ago, it was generally sufficient for a charity to list its outputs (e.g., number of clients served). Today, however, a charity is more likely to be asked to describe outcomes and how its work actually made a difference in the lives of individuals or a community.

Competition

Charities are, and always have been, competitive. They now face a much broader range of competitors, however. Large corporations, like McDonald’s and Canadian Tire, actively fundraise for their own charities closely linked to their brand. Social purpose businesses are being created with charitable sounding mandates. Perhaps the greatest challenge, however, is posed by the proliferation of crowdfunding sites like Indiegogo and Kickstarter. It is estimated that there are now 1,250 crowdfunding platforms globally (117 in Canada) that raised US $16 billion in 2014. Most of these sites are not charitable-at-law, but many promote causes that seem indistinguishable from the missions of registered charities.

So, if those are a few of the key sector changes since 1995, what has remained pretty much the same? I’ll highlight three, in particular.

Government ADD

For the past twenty years, the federal government has suffered from attention deficit disorder when it comes to engagement with the sector. When they do engage, the result can be very positive. But, as we have seen, it can also be negative. Policies like Bill C-470, regarding compensation in the sector, can be based on media-hyped anecdotes, rather than in-depth knowledge or understanding. Disagreements with charities on specific public policy issues can lead to a chill on charities getting involved in public debates.

By and large, however, the sector remains an afterthought and government engagement with the sector is episodic and ad hoc. This lack of a sustained, intentional relationship means that initiatives considered important by the sector can languish for years. A case in point is the Stretch Tax Credit for the Charitable and Nonprofit Sector — an initiative we were advocating during our May meetings. Those of us who are veterans in the sector remember having similar conversations with MP’s in 1997 when the notion of a stretch tax credit was first developed. And, we remember hearing much the same response, “it’s a worthy initiative but not now.”

Media Disinterest

Interest in the sector from the mainstream media also remains much the same as it was in 1995 — limited and predictable. Random events like the Ice Bucket Challenge tend to dominate coverage but positive events never generate as much media attention to the sector as does occasional whiffs of impropriety. Media interest still spikes temporarily before Christmas and New Year’s. Any, every few years, someone in the media becomes fixated on the topic of salaries paid to charity leaders. However, none of the major Canadian media outlets devote the kind of in-depth and sustained attention to the sector as does the Guardian in the UK, for example.

Charitable Definition

The need to modernize the definition of charity has never been greater but the prospect of any serious discussion of the issue remains as elusive today as it was twenty years ago. Archaic English statutes dating from 1601 continue to circumscribe Canadian charitable practice in 2015. This only serves to shackle charities and thwart social innovation. Other common law countries have managed to modernize charitable definition and practice to some extent but, in Canada, the topic is still considered a Pandora’s Box never to be opened.

Hopefully, current and future sector leaders will be successful in moving these last three issues onto the “changed” side of the equation.

 

About the Author

Patrick Johnston is Principal of Borealis Advisors, a consultancy supporting grant making foundations. He has had a long and varied career in the charitable sector since staring his first job as Executive Director of the Richmond (B.C.) Youth Service Agency in 1975.

Guest contributions represent the personal opinions and insights of the authors and may not reflect the views or opinions of Imagine Canada.

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