The Toronto Star: November 22, 1997 A CALL TO ALMS THE NEW FACE OF CANADA _________________________________________________________________ Journalist André Picard, a 1996-97 winner of the Atkinson Fellowship for Public Policy Research, spent the past year investigating the impact of government cutbacks and changing patterns of giving on the voluntary sector. Community key to giving Charities', volunteers' role in a time of cutbacks needs to be spelled out By André Picard Special to The Star There is a palpable longing in Canadian society today, a eagerness to find new and creative ways of dealing with the problems in our collective life, from child poverty through to humane elder care. At the same time, governments in this post-deficit era are searching for ``national projects'' to restore the public's faith in our social democratic system of governance and pride in a country that is the envy of the world. The intersection of these desires and dreams is a place called community. And the way to create community - and its building blocks, social capital, volunteerism and trust - is to invest in the voluntary sector, financially and philosophically. As the backbone of social, cultural and sporting life, Canada's 75,000 charities and its millions of volunteers have already indelibly shaped the country's psyche, and they are increasingly playing a role in its economic health. Now, almost by default, they are being asked to patch and re-weave the social safety net, to essentially redefine citizenship. It is a challenge the voluntary sector is undoubtedly up to but, before that occurs, the role of charitable groups and volunteers needs to be explored and explicitly articulated. This fundamental analysis has become not only necessary but essential as governments cut funding and patterns of private giving change, while charities are expected to do ever more under relentless scrutiny. While commissions of inquiry have lost their lustre of late, the National Commission of Inquiry on the Voluntary Sector would focus attention on a fundamental aspect of Canadian society, establish a framework for its renewal and long-term survival, and establish a sense of the issue's importance in the public psyche (like the legendary Royal Commission on Health Care, headed by Mr. Justice Emmett Hall, which led to a government-supported, country-wide medicare system). There are many issues to be explored in Canada's voluntary sector, but it is work that could have tremendous consequences in sparking social, civic and economic renewal. Having explored these issues for more than one year under of the auspices of the Atkinson Fellowship in Public Policy - and barely having scratched the surface in the process - I realize as much as anyone that there are many thorny issues and much more work to be done. What is important is a process for renewal, a way of sparking debate. Nonetheless, here are some suggestions on key issues that should be explored by the commission and some recommendations that emerge from my own work. GOVERNMENT Governments have an important role to play in establishing a vision of what Canadian civil society - and the social safety net that helps bring it about - should be. Many programs that exist today were created in quite different societal conditions and, as such, they are not working. Politicians have to be willing to break down these barriers and accept new ways of approaching problems, particularly blights like child poverty and unemployment. Government's other primary role is establishing the parameters of the work to be done by charities. Right now, there exists a regulatory and legislative vacuum. While there are many technical, even constitutional hurdles that must be crossed to create sound legislation, governments can no longer avoid tackling the fundamental issue of definition. We owe it to ourselves as a society to define what is a charity of the 21st century rather than affording significant tax breaks and status to some charities based on criteria that were appropriate in the 17th century. Some charities have done a tremendous job innovating, and governments should learn from them. They should also learn from forward-looking foundations which have realized that core funding is an essential prerequisite to sound operation. The policy of many governments to abandon core funding in favour of short-term program funding is short-sighted and extremely damaging. While governments can make an argument for contracting-out service delivery, where they must be more vigilant than ever is in the establishment of standards. Failure to set and enforce standards quickly results in gross disparities and undermines the social contract, and it is beyond the purview and power of the voluntary sector to set these society standards on their own. ___________________________________________________________________ Taxation policy is the principal means of encouraging donations ------------------------------------------------------------------- Almost as important as funding and standards is making available basic information about the voluntary sector. If citizens are to trust charitable groups to deliver basic entitlements and if they are expected to contribute significantly to charitable groups, through donations and taxes, then they are owed a level of transparency similar to that existing in public institutions. One of the best models that has emerged to provide that information is what exists in England and Wales. We would benefit in many ways from the creation of a Canadian Charity Commission, a publicly funded institution working at arm's length from government. It should have the power to certify charities, improve public access to information and promote education for staff and volunteers of charities. A key role of the commission would be data collection and dissemination. It should also have a research arm to ensure that, for example, volunteerism is tracked as thoroughly as employment. Without adequate factual information it is difficult to make sound public policy decisions. The charities division of Revenue Canada should maintain its current staffing level, but its efforts should be concentrated on auditing and other tax-related issues. The federal government would do well to appoint a federal secretary of state for the voluntary sector. A $90 billion industry, particularly one that so directly affects Canadians on a daily basis, deserves a strong voice at the cabinet table. FUNDING If governments choose to deliver basic entitlements such as health care and social services to citizens via the voluntary sector, then they have an obligation to provide adequate and appropriate funding. Specifically, they have a duty to provide core funding that will allow the charitable institutions they contract to function efficiently. The current trend, to award six-month contracts that do not contain provisions for paying for lights and heat, ultimately proves costly and counter-productive. If governments are going to preach re-engineering and efficiency, they must provide charities with the means to make changes. Further, if they are going to tout the benefits of mergers, alliances, governments and politicians must lead by example. They cannot, for example, complain that there is too much overlap, waste and inefficiency in the voluntary sector and, at the same time, claim that national standards and national policies are impractical. Innovation can provide dramatic savings and improvements over the long term but must be a joint effort of funders and recipients. There must be a recognition in funding as well that doing things differently is often costly at the outset. Similarly, if government is going to preach the mantra of consultation, it must provide the means for groups to provide input. Charities, especially small ones with tiny staff, are increasingly being burdened by governments wanting them to sit on all manner of committees. Government is more than willing to pay for advice from the private sector, and should be equally keen to pay for quality advice from the voluntary sector. TAXATION Currently, governments do not even know the total amount of revenues forgone due to tax breaks to charities at the federal, provincial and municipal level. That basic information is required before sound policy decisions can be made. Taxation policy is the principal means of encouraging donations. If governments are going to place more burden on charities to raise funds, they should also provide incentives. Changes in the most recent federal budget, notably a reduction in the capital gains tax (to 37.5 per cent from 75 per cent) on gifts of publicly traded stock, resulted in millions of dollars in new donations. But other creative measures could be introduced. For example, corporations could receive tax credits (instead of tax deductions) for donations up to 10 per cent of pre-tax profits. To promote individual giving, the Canadian Centre for Philanthropy has been lobbying for the introduction of a stretch incentive, an additional tax break for those who increase donations from years previous. This could provide a boost without being an additional burden to the treasury. It is also a means of democratizing philanthropy, of giving a break to the mass of cash donors instead of catering exclusively to those with significant assets. Individuals and corporations can receive significant tax relief by giving to charity. By donating large amounts, they can also influence public policy and government priorities (because there are many matching funds programs). For those reasons, large gifts - say of more than $10,000 - should be subject to rules of disclosure similar to those for giving to political parties. CORPORATE Corporate Canada is, with few exceptions, rather miserly. This is particularly noticeable in these times of record profits. Adherence to programs such as the Imagine campaign - pledging 1 per cent of pre-tax profits - is paltry. That will only change through a combination of peer pressure and consumer insistence. Those who are leaders in the philanthropy field have too readily adopted a laissez-faire attitude; they should put more pressure on the recalcitrant and indifferent. Consumers also have a role to play by persistently and vocally encouraging businesses they deal with to be active members of the community. Giving money is not enough. The trend to gifts-in-kind, the donation of products and services, is growing and welcome. But corporations can do more; they can use their marketing skills to raise awareness through social marketing campaigns, and their business skills to help charities operate more efficiently. Businesses also have a role to play in actively encouraging volunteerism and giving. They can do so by setting a standard of participation at the executive level. They can also provide days off for volunteerism - say one week with pay annually - and match employee donations to charity. VOLUNTARY SECTOR The voluntary sector itself has to take much of the blame for its low profile. Much fine work has been done in splendid isolation, limiting its possible impact. Had charities, particularly with the financial means and political access, spoken up earlier, some of the devastation of cutbacks might have been avoided. The formation of broadly based groups like the Voluntary Sector Roundtable is a welcome initiative. But, again, more alliances are required. There are, for example, few forums where funders and recipient groups sit down and discuss issues. The creation of a Chamber of Charities - which like the Chamber of Commerce could have national, provincial and local branches - could serve as this kind of forum, and help networking within the sector and its visibility with the public. Canada has 75,000 charities. That is not necessarily too many. What there is too often, however, is a lack of specialization and some unnecessary duplication. Some foundations, for example, have forced groups with similar mandates to submit joint grant requests rather than compete on an all-or-nothing basis. More of this kind of discipline is required. Funders also have to talk more openly so they are not all investing in the same projects at the same time. Right now, too many funders clamour to pour money into the sexy project of the hour (say child poverty) and many groups fudge their mandate to cater to that narrow-mindedness. The result is that really good programs struggle because they are not in vogue. VOLUNTEERISM One of the most cost-effective investments for government would be the funding of volunteer co-ordinators. A strategic grants program could provide the basic infrastructure to mobilize an army of volunteers. Laws that make police checks mandatory for volunteers working with ``at risk'' groups like children and disabled are justifiable, but they are too often seen as a panacea. What is required are education programs that protect potential victims from abuse in all manner of situations, be it by a Big Brother, a teacher, a clergy member, a sports coach, a family member or a next-door neighbour. One of the more preposterous examples of robbing Peter to pay Paul is found in the policy of allowing police to charge voluntary groups for police checks that are legislated. A group like Girl Guides or Big Brothers can do a lot of good - and a lot of education - with the $100 that a check costs. Governments must provide adequate money to police to carry out this work, rather than trying to squeeze it out of cash-strapped charities. EDUCATION We cannot take it for granted that Canadians will continue to be generous with their money and time. They have to be aware of the impact of their gifts, and the importance of the voluntary sector in community-building. Students should be encouraged to train in charitable agencies High school education should include discussion of charities and their role in society, a modern version of what used to be called ``civics.'' An integral part of this teaching should be practical, introducing a volunteer component to high school studies. This practice is increasingly popular, but it should not be mandatory. Similarly, universities should encourage co-op students and interns to do their training in charitable agencies. Business schools, which emphasize private enterprise and public service, should pay heed to the voluntary sector. FUNDRAISING Weeding out cheating, deception and unethical behaviour is crucial if charities are going to remain respected by the public from whom they solicit money. Fundraisers must take initiative on this count. The National Society of Fund Raising Executives is promoting a code of ethics that should become a minimum standard. Among other things, it classifies commission fundraising as unethical. While it is not an easy task, a standard must be established for the acceptable cost for fundraising campaigns, say 15 per cent (with some exceptions, notably for new campaigns). This is necessary to help donors judge whether they are getting their money's worth. For this benchmark to have any meaning, however, there must be a standardized means of calculating costs. The practice of many charities of masquerading fundraising costs as education expenses assists no one. Setting such parameters should be one of the tasks of the Charity Commission. DONORS Donors cannot merely sit back and complain about fundraisers. They have to be proactive to ensure they get value for money given to charity. Here are some tips: Do not give to groups that use commission fundraisers. Do not give to groups whose fundraising costs exceed a benchmark of about 15 per cent, unless there is a compelling reason for a higher cost. Target giving. For example, give a $100 donation instead of four $25 donations. Don't give to a charity simply because you have always done so. Do research, and give to causes you believe in and groups you believe are making a difference. Give on a three-year cycle. Give to your charities of choice, but rotate them on a three-year basis, rather than remaining stagnant or changing annually. If you object to a fundraising method or to spending by a charity, speak out. To complain call Revenue Canada at 1-800-267-2384.