The State of the Charitable Sector
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Welcome to season three of the Small Nonprofit! We’re kicking things off strong with a discussion about the state of the charitable sector in Canada. You work on the frontlines supporting our community… but how is our government supporting you? In this episode, we’re speaking with the Honourable Ratna Omidvar, to talk about the recent Senate report on the charitable sector that she co-authored. Their results are not surprising, but some of their recommendations are pretty exciting.
This episode will be airing just before the federal election - and if you leave with anything, let it be this. For these changes to take place, we need a government that prioritizes them and values the work of our sector. Talk to the candidates in your community to see where they stand.
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Here’s where our sector is now
Senator Omidvar worked her whole life in the charitable sector before becoming a senator. While she sees the capacity to make Canada strong, prosperous and equitable, she also sees the challenges that our sector faces. People tend to think of the charitable and not-for-profit sector as providing charitable services, but in fact, they cover the breadth and scope of their reaches. There are roughly 86,000 charities and 85,000 not-for-profits in Canada serving people, providing volunteer services and employing close to 2 million people. Despite this, it’s never on the top of anyone’s agenda in our government.
Everyone assumes that if something goes wrong, the charitable sector will pick it up. The charitable sector has been under a lot of stress for a long time and is trending to increase unless we truly value and treat it as the important player it is. If our work is the most important of our society, why isn’t it recognized and valued in people’s minds?
Human resources fuel the sector
There's so many organizations whose executive directors don’t have the professional development tools or access to the tools to actually become better leaders. Many stay within their positions for a long time, taking a lot of institutional knowledge with them.
The other challenge is attracting talent to the sector. Young people who are graduating from school with skills, competencies and values aligned with the sector aren’t applying for not-for-profit employment. They need to earn a salary that can help them pay off their student loans. According to Senator Omidvar, the sector does not have the capacity to attract and retain the talent that could help it grow people they lose the talent to better paying jobs.
On top of that, small and medium-sized charities rely more on government funding than donations - and government funding is project-based, short-term and unpredictable. Unfortunately, those who work in the sector are in a very unpredictable position in their jobs - precarious funding is a threat to job security and crucial services. But, as Senator Omidvar said, it’s easier to identify the problems than it is to identify the solutions. So Senator Omidvar and her team proposed a multitude of recommendations.
The first recommendation is for the federal government to change federal contracts to two years and to recognize administrative overhead - a taboo but nonetheless the reality of doing business. This being said, Senator Omidvar strongly urges the federal government to develop and implement a human resources plan where the Human Resources Council is reinstated - something that existed six years ago. By looking into the human resources challenges of the sector, funding becomes automatically foundational to creating the solutions this sector needs.
Another recommendation Senator Omidvar has is for the Government of Canada to include questions both for charities and federally incorporated nonprofits on diversity representations on Boards of Directors based on existing employment equity guidelines. By doing so, the government becomes a watchdog monitoring these organizations - preventing them from gathering this data on their own. Amongst many other recommendations she has made, they are all rooted in the need for more government action.
Translating trust into respect
During and after our most recent election, the media has not picked up on the campaign around this report. Senator Omidvar points out that we, as a nation, tend to think that our sector will always be here regardless of what happens - a dangerous assumption. The nation trusts that the not-for-profit sector will continue to work towards a better world but are often dismissed when it comes to the government’s priorities.
The charitable sector is in an uneven playing field where the government understands overhead and infrastructure costs in the for-profit sector, but can’t provide the same respect for those in the business of caring for others. The government needs to adopt tangible, concrete initiatives or regulations where the charitable sector receive the respect they deserve.
Incentivizing and increasing charitable contributions
We know that small nonprofit organizations rely more heavily on government funding while private donations go to a small minority of really large institutions. In other words, we tend to get left out in charitable giving. While charitable giving trends tell us that the number of donors is going down, those who are donating are giving more. However, older individuals tend to give their money to large established institutions - trying to increase charitable giving without looking at how the money is being distributed dismisses the smaller organizations.
A few years ago, Imagine Canada started a pilot program with the government to track tax credit so that donors can give a certain amount of money over three years and then claim that amount in the tax return. If they gave on a yearly basis, they wouldn’t meet the threshold for claiming a tax exemption. However, due to low participation, it didn’t take off. This was because there was no marketing behind the effort to influence donors to give to smaller charitable organizations. With a better effort to reach these donors, more small nonprofits can benefit and furthermore, can create an even playing field for all organizations.
One noteworthy recommendation was to ease on some of the reporting requirements for smaller contract government contributions because sometimes it can cost more for an organization to receive money. Charities have the fill in the same form, regardless of the level of their contributions - meaning that your small nonprofit has to fill in the same form as the Hospital for Sick Children. We know that our definition of a large gift is very different from theirs, therefore it doesn’t make sense to provide a form or process that isn’t reflective of the reality of a small nonprofit.
Here’s what we can do to help
Election time is a great time to remind our government of the amazing work we do and why their support is needed. Senator Omidvar suggests looking at the report and selecting five recommendations. The next time a candidate knocks on your door, ask them what they’re going to do to address the precariousness of the 2 million workers in the philanthropic sector. Ask them what precisely they’re doing - what actions are they taking to work towards a solution. You can also speak to your local representative and ask them to address this in their work and what they can do on your behalf.
Senator Omidvar and her team are currently meeting with government officials, ministers and departments to ask for a response - but it’s going to need everyone’s collaboration in order to get it done.
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Resources from this Episode
CharityVillage webinar with Volunteer Canada
The Small Nonprofit is produced by Eloisa Jane Mariano
