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It’s time to ask what the federal parties will do to strengthen charities

It’s time to ask what the federal parties will do to strengthen charities

Plants sprouting out from pots

Canadians will elect a new House of Commons on October 21.

We’ve already seen the political parties and their leaders staking out positions on an array of fundamental issues. Whether it’s climate change, taxes, employment, foreign policy, immigration or health care, we have a pretty good idea where each party stands.

But what if we told you we don’t know what the parties’ plans are for an economic sector that employs almost 2.5 million people and directly helps millions of Canadians in every province and territory everyday? Would you believe us? Well, it’s true.

I’m referring to the social purpose sector – charities, nonprofits, and social enterprises.

Perhaps this policy silence is because, by and large, “charities” are not controversial. Few Canadians – and even fewer politicians – would argue against a sector that helps to protect our most vulnerable neighbours; that gives us the opportunity to express our faith; that provides opportunities for our children to participate in sports and the arts; that funds research into critical illnesses and provides direct aid to those suffering from those illnesses; that responds to natural disasters and international crises, and that advances the well-being of seniors. And that’s just the tip of the iceberg.

We know our sector is appreciated and supported. Canadians are among the most generous people in the world in terms of both financial support and volunteering. The fact that 13 million Canadians freely give their time and skills to support charitable causes speaks for itself. But despite this overall generosity, some concerning trends are emerging – the number of Canadians claiming charitable donations on their income tax form has been in decline for several years. Traditional giving is increasingly concentrated amongst older, more well-to-do individuals and families. 

And our world is rapidly changing. Powerful demographic and economic shifts are making it increasingly difficult for charities and nonprofits to effectively respond to community needs and demands. 

Imagine Canada’s Chief Economist for the Charitable and Nonprofit Sector has crunched the numbers and identified a looming “social deficit” that’s expected to hit $25 billion a year within a decade. This means that in just a few years social purpose organizations will need $25 billion more than they have today to meet demand.

Quite simply, the social deficit is the difference between the demand for services social purpose organizations provide, and the resources available to deliver those services. Unlike household debt or government deficits, this deficit won’t show up on a balance sheet. Instead, it will manifest itself in reduced services, longer wait times and increased pressure on staff and volunteers to do more with less.

The causes of the social deficit are complex. Changing demographics will mean a higher demand for services that seniors and new immigrants, for example, rely upon. The changing nature of work means that younger Canadians in particular – even when they are doing relatively well – don’t feel they have the financial security to commit to organizations the way that older generations have been able to. Because many funders – including governments, corporations, and individual donors – don’t want to support “overhead” costs, charities and nonprofits find it difficult to invest in new technology, research, and processes that might allow them to serve people and communities more efficiently.

The solutions are also complex. We are seeing more and more charities and nonprofits working in partnership with each other, with governments, and with the private sector to tackle complex social challenges. More and more organizations are looking to alternative ways of financing their work, including increased business activity and new corporate models. But they often run up against laws and regulations that limit their ability to adapt in the modern world.

We are calling on all federal parties to recognize this challenge and commit to working with us to ensure a sustainable future where we can keep providing vital services that individuals and communities have come to rely on.

Government can do much to strengthen the social purpose sector. Some progress has been made in recent years by governments of all political stripes. Changes to the tax system have made it easier for Canadians to donate. The Social Finance Fund announced last year has the potential to help organizations access new and innovative sources of funding. 

The next step is action to reform the outdated regulatory framework governing charities and nonprofits. The next federal government should also give the sector a seat at the policy table. 
Canada’s 170,000 social purpose organizations excel at inclusiveness and creating social value in areas ranging from health care to social services, education and the environment. This expertise is a largely untapped public policy resource with the potential to improve the lives of Canadians from coast-to-coast-to-coast.

When a candidate shows up on your doorstep, ask them what their party is going to do to support charities and nonprofits. Even better, be proactive. Reach out to the candidates and explain how action to strengthen social purpose organizations will influence your voter choice. 

Together, we can send a message that no government will be able to ignore.

Bruce MacDonald is president and CEO of Imagine Canada.

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