The recently released report by the Canadian Senate on the Charity sector contains some great ideas and some surprising omissions. To be fair, the charitable sector is a critical sector. After all, if we were happy with the world, the way it is, we wouldn't be passionate about this sector. Here's a round-up of the good, the bad, and the overlooked.
The Good
Association of Fundraising Professionals Canada
Paula Atfield, President of AFP Canada shared the following positive comments
"AFP Canada was pleased to have been among the first to be invited to provide depositions at the Senate hearings. In fact, during the process, four of our members were invited to speak on behalf of AFP, including: Scott Decksheimer, CFRE; Andrea McManus, CFRE; Krishan Mehta, Ph.D. and Juniper Locilento, MPNL, CFRE. The Senate process was thoughtful and comprehensive and we were grateful to have had the opportunity to add our input.
The final report is indeed ambitious, we were astonished by the breadth of the proposals. While it may not be realistic to think all of them could or would be implemented, the recommendations provide us a very solid roadmap to begin thinking of how we could change the sector to help Canadians even more, and we are grateful for the work of Senator Terry Mercer and Senator Ratna Omidvar and the entire committee, for thinking big.
We are very excited that three of AFP Canada's policy priorities were included in the final report.* This demonstrates a solid commitment by the Senate to our sector and to the fundraising profession. It is our job as fundraisers to ensure that commitment resonates with our elected officials. To that end, AFP Canada's Government Relations Committee, chaired by Jessica Wroblewski, MPNL, CFRE, will continue to review the report in detail, and craft a plan of action to best utilize the momentum generated by this report.
For reference, here are the three government relations priorities of AFP Canada (including numerical citations from the Report):
Recommendation 16: That the Government of Canada prioritize data about the charitable and non-profit sector in all Statistics Canada economic surveys, including the Satellite Account of Non-profit Institutions and the General Social Survey on Giving, Volunteering and Participating; and that the Government of Canada support collaboration between Statistics Canada and the charitable and non-profit sector to determine what additional data could be collected and disseminated in a timely and consistent manner to support the evidence base for decisions by organizations in the sector.
Recommendation 22: That the Government of Canada, through the Minister of Innovation, Science and Economic Development, create a secretariat on the charitable and non-profit sector.
Recommendation 34: That the Government of Canada, through the Canada Revenue Agency, develop, implement and evaluate a pilot project on the impact on the charitable sector of exempting donations of private shares from capital gains tax."
Canadian Association of Gift Planners
CAGP expressed their enthusiasm for Recommendation 34 noting " specific excitement around the inclusion of a recommendation pertaining to an examination of a capital gains exemption on gifts of real estate and private company shares, long championed by CAGP and Mr. Donald K. Johnson. CAGP also as well spotlighting several other recommendations "that have the greatest relevance for CAGP and our mission, with
Recommendation 9 That the Government of Canada, through the Minister of Revenue and the Commissioner of the Canada Revenue Agency, direct the Advisory Committee on the Charitable Sector to review existing tax measures available to individual donors in order to strengthen the culture of giving among new and current charitable donors.
Recommendation 17 That the Government of Canada, through the Canada Revenue Agency, seek the advice of the Advisory Committee on the Charitable Sector on what additional information could be included in the Agency’s T3010 form that would support the work of the sector.
Recommendation 35 That the Government of Canada, through the Canada Revenue Agency, study the extent to which the donation of non-environmental real estate could be incentivized without undermining the Ecological Gifts Program.
Recommendation 36 That the Government of Canada direct the Advisory Committee on the Charitable Sector to examine the advantages and disadvantages of amending the disbursement quota for registered charities; and the advantages and disadvantages of setting the disbursement quota in regulation, rather than statute.
Recommendation 37 That the Government of Canada instruct the Advisory Committee on the Charitable Sector to consider means of ensuring that donations do not languish in donor-advised funds, but are instead used to fund charitable activities in a timely fashion."
Imagine Canada
Bill Schaper, Director of Public Policy in Imagine Canada’s Ottawa office offered this "highlight reel" with "a sampling of the Special Committee’s recommendations:
Helping organizations become more financially sustainable
The Committee heard from many witnesses about the financial sustainability challenges they face. Recognizing that there is no single silver bullet, a number of recommendations deal with various facets of the issue. These include:
A pilot initiative to encourage the donation of real estate and private company shares.
A review of existing giving incentives by the new Advisory Committee on the Charitable Sector (which our CEO Bruce MacDonald will be co-chairing).
Grant and contribution reform that would see multi-year funding become the norm, and would see all legitimate overhead and administrative costs covered.
Funding to help cover the costs associated with recruiting and managing volunteers.
A re-write of the CRA guidance on business activities by charities, as well as experimenting with a “destination of funds” test so that charities can engage in a wider range of business activities.
Full access to government programs that provide business advice and assistance, as well as helping to access new technologies.
Developing a social procurement strategy, with an emphasis on small- and medium-sized organizations. Improving workforce conditions
The Committee placed a great deal of emphasis on the sector workforce, and the need for better and more sustainable employment practices. Recommendations in this area include:
The government should work with the sector to explore a comprehensive, portable pension plan.
The government should work with the sector to find ways to measure and report on workforce and board diversity.
The HR Council should be reconstituted, or a similar body carrying out similar functions should be established and funded by the federal government.
Relationship between government and the sector
The Committee concluded that the federal government doesn’t have structures in place allowing it to most effectively work with and promote the well-being of the charitable and nonprofit sector.
Recommendations to help address this include:
A comprehensive review of the Income Tax Act rules governing charities every five years, so that where necessary those rules can be updated to reflect a changing world.
The ongoing collection of comprehensive economic and labour market information about the sector.
Establishing a new “home in government,” for the sector, with a role to champion rather than regulate the sector. This would see the establishment of a new secretariat at Industry, Science and Economic Development Canada (emphasizing the economic as well as social role of the sector) – which would be similar to the existing small business secretariat also housed in this department.
This is just a highlight reel of what the Committee recommended. On first glance, Senators have laid out a roadmap that, if adopted, could be transformative for organizations and the people and communities they serve."
Private Foundations Canada
PFC also strikes a positive tone noting "Many of the 42 recommendations are important and relevant to charitable foundations and have been issues PFC has championed over several years. By making the rules more flexible, the recommendations would enable foundation work that cuts across boundaries and involves more non-charities than ever before. They would also make it possible for foundations to focus on the truly innovative and longer-term work that is so important to social progress, while helping charities earn more sustainable revenues that are not dependent on organized philanthropy.
Setting the Agenda
This report overall could set the agenda for the charitable sector’s policy priorities with the federal government for the next five years. And it’s based on a wide consensus. PFC would like to thank the Senate Special Committee for its impressive work in producing this road map. The Committee held 24 hearings and an e-consultation that reached 695 respondents. It talked to 160 witnesses and received more than 90 briefs. This public input alone has been very valuable for the sector. Four of PFC’s members and PFC itself presented briefs and testimony to the Committee. All were cited in the final report in different sections.
The Senate Committee has made it clear that it wants to see a more flexible, more enabling, more modern and productive relationship between the federal government and the sector. As Senator Mercer stated, “The Charitable sector is a major part of Canadian society and it has been ignored for too long.” As the sector faces more demand, greater disruption and more constrained funding than ever before, “its potential is limited by what are seen by many stakeholders as complex, outdated rules and a lack of coordinated support within the federal government.”
Flexibility Leads to More Potential
To tackle these concerns, the Committee recommends flexibility:
For charities who want to generate more business revenue to pursue their charitable purposes.
For foundations who want to work in closer partnership with non-charities.
Recommendations 28 and 29 are both intended to promote exploration of innovative means of ensuring adequate funding for the sector. Recommendations 30 and 31 are intended to help charities who work with non-qualified donees (agents or non-profits). These recommendations would allow more charities to try to generate business revenue as long as it is destined for charitable purpose. They would also ease the provisions around direction and control of funds that make it difficult for foundations to work with agents and with non-charities. If just these four recommendations were implemented, there would be a noticeable improvement in the opportunities and the funding available to charities and foundations who want to collaborate. They would also do much to encourage work with the business and public sectors.
The Time to Act is Now
There are many other recommendations in the Report that will interest funders who want to see stronger sector organizations, especially around building stronger organizations with more human resource and technological capacity in addition to financial resources.
The Senate Committee has concluded that the sector needs meaningful law and policy reform and a renewed relationship with the federal government. It has set out a roadmap for getting there. It is up to us now, in the sector, and as charitable funders who care deeply about being more effective and having more impact, to use this report to catalyze much needed policy change."
The bad
24 cities, 160 witnesses, 90 briefs, no execution plan. Really?
This reports demonstrates the need to make a number of significant changes to the charitable sector.
Yet now that the report is finished, there is no roadmap to act on these important recommendations ... Shocking.
The overlooked
Samantha Rogers, on behalf of Relate Social Capital wrote that "Governments have been involved in sport since the early part of the twentieth century because they recognize sport as a powerful means of enhancing society’s health and well-being. i. While sport plays a critical role in elevating society, in Canada, an organization whose purpose is to promote one or more sports for its own sake cannot be registered as a charity. ii. The Challenge:
The mission of Sport Canada is to enhance opportunities for all Canadians to participate and excel in sport, however:
1. Many sport-related organizations in Canada are Registered Canadian Amateur Athletics Associations (RCAAA) and must be established for the exclusive purpose and exclusive function of promoting amateur athletics in Canada on a nation-wide basis. In this case, sport organizations in Canada either have to have as their exclusive purpose to promote sportiv (RCAAA) OR attempt to fit within a recognized charitable purpose.
2. There is a crisis in sport funding in Canada. Even though the government has declared sport a priority, Canadians and sports organizations have indicated that one of the major barriers in access to, promotion of, and programming in sport is a lack of funding.
The Opportunity:
Recognize sport as a charitable purpose. Similar to the arts, sport has an enormous public benefitvii, falls within the ministry of Canadian Heritage and is at least as popular as the arts to the average Canadianviii. Incorporating sport itself as a charitable purpose reinforces the government’s stance that sport is important, and provides the opportunity to fill the funding gap with private support. This in turn enriches key sectors involved in, and influenced by sport participation, and supports Sport Canada’s vision that all Canadians can pursue sport to the extent of their abilities and interests, including performing at the highest competitive levelsix; and where sport delivers benefits, for increasing numbers, to individual health and well-being, and contributes to socioeconomic outcomes."
Your turn
What do you think? Share your thoughts below. Get engaged with any, or all of these organizations to make sure this important work does not become RSOL (report sitting on a shelf).
Notes
Full report | To read the full Senate Report, click here.
The Philanthropist | To read an excellent high level overview by John Lorinc published in The Philanthropist
AFP | Those interested in working with us [AFP] on our mission to advance the charitable sector and our work as fundraisers through government relations can contact us at paffairs@afpglobal.org.
Imagine | We’d [Imagine] encourage you to have a look at the report, or at least the recommendations, and share any reaction you might have with us at publicpolicy@imaginecanada.ca.
PFC | To read more about PFC's thoughts, click here
Relate Social Capital | To read Relate Social Capital's full submission, click here.
