Charities and Government: Modernizing the Relationship
So what might help the charitable, nonprofit, and social enterprise sectors rev up? Constraints, hot topics, and fresh ideas were just some of the reasons to get leaders together to discuss common issues at the Open Caucus hosted by the Liberal Senate Forum on February 8.
The Open Caucus initiative is about opening the doors to Canadians to discuss issues of national importance. Representatives from the charitable sector and Senators offered informed opinions and recommendations under the banner Charities and Government: Modernizing the Relationship.
Comments from the roundtable and from the floor were impassioned, insightful, and occasionally humourous. Reflecting on the fact that Canada has 86,000 registered charities that contribute to the economy and to the quality of life, forum leader Senator Art Eggleton acknowledged that a number of organizations have challenges in achieving their mandate and asked, what role can the government play in supporting a socially minded role for Canadians? To synthesize the discussion, I’ve organized a number of ideas and themes into six key ideas.
The Slowly Intensifying Crisis
Brian Emmett, Chief Economist at Imagine Canada kicked off the discussion by connecting projections of a slow-growing economy to an anticipated increase in demand for services, leading to what is termed, a “social deficit.” That gap will show itself in small ways: sector worker fatigue and long waiting lines as organizations struggle to keep pace, for example. To put that in economic terms, as Emmett did, this means that by the year 2026, the social deficit will amount to $23B CAD (in 2016 dollars). In other words, donations from Canadians would need to triple overnight in order to meet the demand. These effects will begin to add up and it’s important that the sector be seen for the value it creates in terms of ameliorating social problems, creating jobs, and contributing to economic growth. Policymakers need to keep this in mind.
Would it make sense to have a minister responsible for the sector in the way that we have a minister that is responsible for the small business portfolio? Post-event discussion offered mixed opinion on this recommendation made by Emmett, panelist Leah Eustace, and others. Does it mean more clout or more regulation? For many on the panel, the idea of having an official champion appeals. Brian Emmett noted that , “too often, charities are not brought to the table when governments meet about economic policy.” Having a voice for the sector offers the ability to contribute to meaningful policy that will keep the sector innovative, vibrant, resourceful, and sustainable.
Studies and Data
Good decisions can’t be made on old data, and most studies on the sector date back more than a decade, and many others are from pre-personal computing days. The Muttart Foundation’s Bob Wyatt noted that Canada is behind the rest of the world in how we regulate charities. “Benign neglect has not served us well.” He illustrated the point by noting that you can find out how many asphalt tiles are produced in Canada or where every egg in the country was laid and that this data refreshes regularly—sometimes every 30 days. Still, sector data is out of date, but still forms the basis of policy decisions. Maytree president Elizabeth McIsaac pointed out that data and evidence are also needed to understand the social issues, such as poverty, that the sector addresses. She suggested that the government create a Canadian Institute for Social Information (CISI), similar to the Canadian Institute for Health information. The institute could anchor a renewed approach to the collection, analysis and dissemination of data relevant to social policy for policy-makers, the community sector, researchers and the public.
A number of roundtable members, including Senator Kim Pate, noted that there needs to be a focus on encouraging and not restricting rules around political engagement. If problems are complex and systemic, then those at the front lines who are best positioned to realize change should have the right to engage in policy to see systemic change, as noted by Anouk Bertner, director of business operations at EcoEquitable.
A Sustainable Sector
A number of participants noted that fewer and fewer funding bodies support core costs. “No one wants to pay for rent or leadership,” as one person put it. This leads to precariousness in the sector loss of talented employees, and the attendant effects. In order to enable the sector to do better, there needs to be resources to provide living wages, job security, pensions, and benefits, as noted by Elizabeth McIsaac. Also, sector leaders noted the administrative burden of paperwork for small grants that keeps people away from their mission. Easing the bureaucracy would help with that.
New Terms, New Models
Do most people know the difference between a charity, a nonprofit, a social enterprise, or hybrid models? Outside of the sector, there may be some confusion as to what these terms mean. It can also wreak havoc on sector administrative staff who are trying not to run afoul of the Canada Revenue Agency. It would be helpful for the government to support a number of funding models and relax restrictive rules on earned income so that, perhaps, if a social enterprise earned too much or turned a profit, they could donate the means to other organizations who may not have earned income streams, an idea expressed by Ellen Martin, co-founder and chief operating officer at SoJo. Former Senator Landon Pearson noted that the word charity itself is becoming outdated and that the sector needs a new name that emphasizes the role of volunteers and of civil society. “Charity is a deficit, the voluntary sector and philanthropy are an asset.” Finally, the Income Tax Act is the defacto instrument to regulate charities, and it is very limiting, according to panelist Carl Juneau, a director at the Pemsel Case Foundation. The act’s wording poses a challenge to charities in terms of compliance and and the ability to keep pace with current issues and discussions that help society.
About the Author
Fateema Sayani works on digital editorial initiatives at Carleton University. She has a master’s degree in philanthropy and nonprofit leadership.
Guest contributions represent the personal opinions and insights of the authors and may not reflect the views or opinions of Imagine Canada.