publication date: Dec 29, 2011
author/source: Sumac Research
On October 28, the front page of the Globe
read "Ottawa looks to rewrite rules on giving." In it, human
resources and skills development minister Diane Finley unveiled the
government's plan to put in place a sweeping set of tax reforms that will shift
responsibility for the nation's social services away from government and into
the hands of individuals and business.
The changes are said to be "inspired by British Prime
Minister David Cameron's Big Society experiment, in which social
responsibilities that traditionally fell to the state are put in the hands of
the citizenry and private sector."
There has been a lot of controversy about the "experiment."
While Cameron says it will empower communities, critics call it a "public
relations effort to put a positive spin on deep cuts." Whether it's good or
bad, right or wrong, nonprofits need to be prepared for the changes ahead.
give little guidance
What kinds of changes can you expect to see? Finley was
vague, but she did say that that "the government plans to start off small with
a few pilot projects. The most likely would be to replace some traditional
grants with a hybrid version - a defined amount that recipients could increase
by meeting agreed-upon targets."
So there will still be financing, but it will "come with
more strings attached in an effort to ensure that organizations deliver
promised social gains."
In the end, it looks as though nonprofits will have to look
to the public to shoulder more of the responsibility. Luckily it also sounds
like the government plans to give donors bigger tax cuts for charitable
donations, which is critical if this is where the majority of funding for
nonprofits is going to come from.
Get ready by checking
your own reporting
So, what do you do with this information; this vague
description of changes that may happen? Well, the best thing you can do right
now is take a good look at your organization. How does it spend money? To what
extent does it achieve the objectives set out? Do you gather the information
needed to show that you are achieving your objectives? How does your efficiency
compare with similar organizations?
Government cuts are going to mean greater competition for
funds, so it's time to do a little self-evaluation to see how you measure up,
and take any actions you think are necessary to increase efficiency and
How is efficiency measured? Often efficiency is measured by
ratios such as administrative cost per dollar raised. For information on how US
charities are rated, visit The
American Institute of Philanthropy
, and to learn how to calculate ratios, visit
Efficiency is important for the public as well. They have
become increasingly critical of nonprofit spending over the years and are more
careful than ever before about whom they support. They want to see that a
nonprofit uses funds wisely, that it delivers services as promised and that it
If this group is going to become the primary source of
funding, then nonprofits need to start winning back their trust. The best way
to do that is to be accountable and transparent about how funds are spent.
Sumac is a complete, integrated software solution for
nonprofits that tracks lapsed donors and distributes personalized electronic
and paper communication easily and cost-effectively. For more information,