(March 17, 2021) The first report from the Ministry of Finance’s Advisory Committee on the Charitable Sector (ACCS) is a baffling response to current charity needs. Judging by its contents, the biggest issues facing the charity sector today are:
- Abolishing the requirement for the direction and control when a charity provides resources for a non-qualified donee
- Appeals to decisions made by the Charities Directorate be able to proceed to the Tax Court of Canada for a new hearing
- That there be a ‘home’ for the sector within government.
The ACCS was established in 2018, with a budget of $3.2 million until 2022/23, to notionally be a forum for “meaningful dialogue with the charitable sector.” It is co-chaired by the CRA and what it calls the “sector.” All 14 members from the sector, including two sector co-chairs, are appointed by the Minister of National Revenue or the Commissioner of the CRA.
Current sector co-chairs are Bruce MacDonald, CEO of charity lobby group Imagine Canada, and Hilary Pearson, the former CEO of Philanthropic Foundations Canada (PFC), a lobby group for Canadian private and public foundations. In the past decade, Imagine Canada has consistently pushed government for more generous charitable tax credits. Most recently, it demanded $10 billion of public money for a fund for that would stabilize Canadian charities. Pearson, who spent almost 18 years with PFC, has worked with many of the largest private charitable foundations in the country.
The committee has been meeting since the summer of 2019. The report, released on March 12, is its first.
Charity lawyer Mark Blumberg is not impressed.
A partner at the law firm Blumberg Segal LLP in Toronto, Blumberg works almost exclusively advising non-profits and registered charities. He is the editor of www.canadiancharitylaw.ca, a website featuring news and essays about legal and ethical issues for Canadian charities. He also has established the websites www.CharityData.ca, the largest portal of data on the Canadian charity sector.
“If, after spending millions of dollars, this is what the committee came up with,” he says, “my suggestion would be that the committee should be shut down and the funds that would have been spent on this committee should rather be used for capacity building activities in the charity sector. Alternatively, the composition and priorities of this committee requires a significant change.
“If you are expecting a call for more funds for vulnerable and marginalized populations you are not going to find it in this report,” says Blumberg. “If you are expecting a call for CRA to explain the importance of ‘reserve funds’ for the continuity of a charity and its mission this is the wrong report.”
Although the report did note the “pandemic put a spotlight on the consequences of the financial fragility of many charities, including lack of reserve funds, insufficient investments in technology and digital infrastructure, dependence on older volunteers and lack of data capacity,” it made no recommendations as to what might be done.
There are also no recommendations calling for the government to invest in digital infrastructure for the charity sector or any mention increasing the disbursement so foundations sitting on large amounts of money can help deal with the “financial fragility of many charities.”
And there was no mention of the WE scandal.
“Some might say that the WE Charity scandal, in addition to COVID, was one of the biggest challenges of the sector over the last year,” says Blumberg. “It might have resulted in a significant decline in public trust. Why not even a reference to it and whether it will have an impact on the sector?”
The charity sector has been buffeted this year—by scandal, by repeated polls that agree charities are under water in terms of public trust, and by revelations that charitable foundations give negligible support to Black, indigenous or people of colour, and that systemic racism is endemic in the sector.
A global report on charities issued by Edelman PR in January revealed a majority of respondents surveyed in more than 30 countries believed charities were “incompetent.” A poll released by The Charity Report, conducted by Proof Strategies, found the public believes charities are the least capable of public institutions to deal with issue of inequity.
A report issued by AFP Global on March 15, Fundraising Workplace Climate reports that 75.8% percent of the charity fundraisers surveyed experienced sexually harassing behaviors in their career by a coworker or stakeholder. AFP Global is the worldwide association of fundraising professionals.
But the Advisory Committee on the Charitable Sector not only seems far removed from the reality of the charity sector or the social justice issues it’s raising, it appears in denial of those self-same issues, making the incredible claim that “in all other aspects of Canadian life, the law is fully tested, discussed, debated and ultimately evolved to reflect the needs of society, but not as it relates to charities.” (italics inserted)
The very idea that equity in the criminal justice system, with wealth distribution, and among racialized people and women has “ultimately evolved to reflect the needs of society” is either breathtakingly insensitive or woefully ignorant.
At times over the past year, The Charity Report has had one answer to baffling responses like this one. It’s a Gil Scott Heron poem from the 1970s called Whitey’s on the Moon.
Blumberg suggests the main interest of the Advisory Committee on the Charitable Sector is de-regulation, that the people with the most money want to be free to spend it however they wish.
“Ultimately the charity sector is supposed to be about the beneficiaries of the charity sector,” he says. “I will leave it to the reader to think whether these proposals are focused on the beneficiaries or the desires of certain special interest groups.”
The report was signed by all 14 members of the committee. The Charity Report plans to reach out to sector co-chairs MacDonald and Pearson for a response.
In latest poll, charities rank last in trust to mitigate inequity February 12, 2021