Staying on message won’t change a thing

Wednesday, November 26, 2014
Chief Economist Commentary
Public Policy
Woman being interviewed by the press.

When asked how she managed to raise such perfect children, Miss Manners replied “a generation of constant nagging.” Nagging is such a negative term. I prefer its more polite equivalent – “staying on message”.  Both for-profit companies and nonprofit organizations know the importance of this.

But it’s time to change the message

Nineteenth century thinking that charities are simply groups of good people, largely volunteers – doing good things, somehow apart from what we think of as the productive economy – has to change. Let’s take an example from something that surely is top of mind to everyone: floor covering.

In 1994, Ray Anderson, the CEO of Interface, a U.S. carpet company, experienced a sudden and profound realization about what the petrochemical and waste- intensive carpet business was doing to the planet – he called it a spear to the chest – and became committed to change. 

Interface revised its mission, vision and values, business model and production methods, aspiring to be the first fully sustainable industrial enterprise.  Some changes were strikingly simple; others required new processes and new technology. 

The results of this rethinking have been striking – the company has grown to be the world’s largest carpet manufacturer; its environmental footprint has been dramatically reduced;  it is ranked by Fortune magazine as one of the top 100 companies in the U.S. and one of the top 100 employers. 

While doing good things, we’re growing faster than some economies

I believe that we think of charities in a way which is both factually wrong and unhelpful for the Canada we want and for the economy upon which we depend for jobs and prosperity. 

Charities and nonprofits are a big part of the economy. They account for 14% of employment – some 2,000,000 Canadians – almost as many Canadians as work in manufacturing and more than the construction industry for example. More than this, charities generate economic activity, just over 8% of gross domestic income! 

Internationally, Canada’s charitable and nonprofit sector is the 2nd largest in the world.

In addition, and this surprised me, over the last decade charities have grown more quickly than economies as a whole in most developed countries.

In part this has occurred because charities are service-oriented and services are growing faster than goods production in advanced economies. 

But it is also because charities are focussed in areas in which there is a growing need and demand among citizens – health, culture, recreation, social services, to name but a few. They are an important element of that fundamental but elusive element: the quality of life.

Funding not keeping up with growth

As economies become richer and population ages and changes, we can expect the demand for what charities provide will continue to grow more quickly than the economy as a whole. It is less clear that sources of funding will grow in the same way. 

The emerging picture is worrisome. With demand for the sector’s services likely to grow more quickly than the economy, and funding likely to grow at most as quickly as the economy, it is understandable that financing is an overriding issue for the charitable sector.

Doing good will no longer be enough

Small business and charities have a lot in common. Both are sources of jobs and growth. Yet small business is seen as a contributor to the economy with a responsibility centre in Industry Canada and a variety of support programs. Charities, a big economic actor, are seen as a problem in tax administration with a responsibility centre in the Canada Revenue Agency. With government thinking about the sector in this unhelpful way, charities miss out on programs and services to support their economic development and the benefits of good information and data collection to measure their importance and impact. 

We need to speak up. Canadians want a country which is economically successful, environmentally responsible and socially aware – in short, a high and improving quality of life. An important factor is the charitable sector. It provides many of the key components of quality of life – education and medical services, arts and culture, recreation and social services. But more than this, our charitable sector provides people with a community in which to live and participate, to volunteer and donate, and to make a difference in the country and world around us. As one critic put it, charities provide the opportunity to be fully human, the opportunity to participate in imagining what Canada can be. 

Staying on the new message

The example of Interface, the sustainable carpet manufacturer, shows that changing the way we think leads to changes in the way we act and the way we make the hundreds of decisions in our personal and working lives. Rethinking is a fundamental step in making charities the vibrant forces they can be in helping Canada continue to be a successful country in the 21st century. 

The charitable sector is a mature, essential part of the economy, a big employer, a source of high-value services and growth. In addition, it provides an important if intangible strategic value to Canada in a highly competitive world economy. For Canada’s charities our job will be to nag a little, to stay on this stronger message, consistently and persistently, year after year, emphasizing the benefits of thinking about us in the right way. So stay tuned. You will be hearing more from us. 

 

About the Author

Chief Economist for Canada’s Charitable and Nonprofit Sector, Brian Emmett is tasked with measuring the impact of the sector and bringing economic issues facing charities and nonprofits to the forefront of public policy decision makers. Mr. Emmett is an economics graduate of the University of Western Ontario and the University of Essex in England, and has enjoyed a long and distinguished public service career. He was Canada’s first Commissioner of the Environment and Sustainable Development in the late 1990s and worked extensively on Canada’s Green Plan. He also served as Vice-President of the Canadian International Development Agency (CIDA) in the early 2000s and has been an Assistant Deputy Minister in a number of federal government departments.

The office of the Chief Economist for Canada’s Charitable and Nonprofit Sector is made possible through funding received by The Muttart Foundation, Ontario Trillium Foundation, Vancouver Foundation, an anonymous donor, and the PricewaterhouseCoopers Canada Foundation.

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