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Making the case for charity

By Christopher Korchin | March 30, 2015
Making the case for charity
Bruce MacDonald

After a 30-year career with associations like Big Brothers Big Sisters of Canada and involvement with the YMCA and the Kinsmen, Bruce MacDonald is no stranger to charitable work. But his connection runs even deeper: “I was exposed to it at a very young age,” he says. “My parents were volunteers.”

Now, as President and Chief Executive Officer of Imagine Canada, an umbrella group that represents the interests of the nation’s charities and is itself a registered charity, MacDonald has an ideal platform for discussing the moral and psychological virtues of giving back.  But since taking the job in July 2014, his main focus has been to shed light on the social benefits of the charitable sector, which accounts for more than $105-billion in economic activity annually – more than both the automotive and manufacturing sectors. 

Imagine Canada is “the voice for Canada’s 86,000 charities across the country,” says MacDonald. “We speak with them and on their behalf with government on public policy issues. And we deal with issues as they relate to changing perceptions in the media.”

In a sector that runs the gamut from small, rural charities that depend on volunteers to large, well-staffed organizations that operate sophisticated fundraising campaigns, one crucial concern among donors is how effectively their contributions are being administered. In a 2013 survey commissioned by the Edmonton-based Muttart Foundation, almost 75 per cent of respondents said charities spend too much on fundraising and administration. 

That is precisely the kind of perception that MacDonald and his team are trying to counter, and Imagine Canada’s key strategies for addressing the situation are to encourage Canadians to focus on a charity’s impact instead of costs and to raise the professionalism of the sector as a whole. Their recent Standards Program, a rigorous accreditation procedure to certify that a charity meets Imagine Canada’s criteria for governance, transparency and accountability, is designed to give confidence to potential donors. 

“In the long term,” says MacDonald, “we see the Standards Program as a kind of Good Housekeeping Seal of approval, where donors of all kinds will say to a charity, ‘Are you accredited by Imagine Canada?’ They will know, if it has gone through that process, that a measure of rigour has been applied to that organization to ensure that it’s operating at the highest standards.”

MacDonald cites Imagine Canada’s website as another tool that provides transparency. “Canadians can go and look not just at the financial information that charities submit every year to the federal government, but also their annual reports, research and evaluation studies and impact testimonials to get a well-rounded picture,” he explains. The downloadable Guide to Giving can be invaluable when trying to decide which charities to support, MacDonald adds.

But if restoring trust in charities seems an attainable goal, reversing the decline in actual charitable giving may be tougher. The latest version of the annual Generosity Index published by Vancouver-based think-tank the Fraser Institute shows that the percentage of Canadian tax filers who donated to charities fell from 25.1 in 2005 to 22.3 in 2012, and that Canadians gave 0.81 per cent of their total income to registered charities in 2006 compared to 0.61 per cent in 2012, a significant drop not fully explainable by the intervening recession. This decline is affecting what MacDonald refers to as a widening “financing gap.” Demand for services from charities may be growing, but funding is stagnant or in danger of eroding.

Here, too, however, Imagine Canada is adopting practical measures. The appointment in 2013 of Brian Emmett to the new role of Chief Economist for Canada’s Charitable and Nonprofit Sector was another clear attempt to polish the professional image of Canada’s charities and to highlight their relevance within the country’s economy. 

Emmett, a former civil servant with a distinguished career at the federal level, feels it’s essential for the charitable sector to “speak the language of economics. The premise that you are basically good people, largely volunteers, doing good things on your own initiative, is probably not the right way for this sector to be perceived.” That more homespun approach “will put you at a disadvantage when you’re talking about individual issues such as the financing gap or cost levels or overheads,” Emmett says. His role is to position the charitable sector as an economic contributor – one that operates using sound business fundamentals.

Still, with charitable donations from the public showing softness, government funding (which accounts for roughly 50 per cent of overall revenues for charities) having little room for growth in an uncertain economy and corporate contributions languishing at less than 1 per cent of total charitable revenue, Imagine Canada has focused on smaller individual projects – rather than targeting one grand initiative – to maintain revenue streams. One such campaign is the proposed Stretch Tax Credit, which Imagine Canada is currently pitching to Members of Parliament.

Stephen Faul, Imagine Canada’s Vice-President of Strategic Communications and Business Development, cites the organization’s Grant Connect – an online database with an intelligent search matrix listing various entities that might want to fund a charity – as a resource that is giving charities a 21st-century boost. And he mentions “significant wins in public policy” spearheaded by the Imagine Canada team. These include the successful fight for charities’ efforts to raise funds to be exempted from Canada’s anti-spam legislation and additional reductions of merchant interchange fees on credit card transactions. MacDonald notes that Canada Revenue Agency’s new First-Time Donor’s Super Credit, which Imagine Canada was instrumental in securing, has “brought 95,000 new donors into the sector” as of July 2014.

The main goal is to ensure that the culture of charity evolves with the times. New phenomena like Giving Tuesday, the ALS Ice Bucket Challenge and crowdfunding suggest that the charitable impulse is alive and well, but the trick will be to make charity habitual rather than sporadic. MacDonald, meanwhile, sees a potential resurgence in charity among the new generation. “It’s almost in their DNA to do social good,” he says. “It’s unbelievable how socially conscious young people are today – it just may not manifest itself in the way it has in the past. What I’m seeing is more people saying, ‘I’d like to start something that will benefit the community and potentially do so in an earned-income way, where I can make a living out of this.’ So I think the desire to do good is as great or even stronger than for past generations, but the way it may unfold can be quite different from the traditional paradigm of the charitable organization model.”

And MacDonald sees further signs for optimism, pointing to a recent Imagine Canada opinion poll on factors that people consider when they make their charitable gift-giving decisions over the holiday season: “About a third of the people who were polled indicated that they wanted to set a good example for their children about the importance of giving to community.” It’s a sentiment that harks back to his own upbringing. “I thought it was great that people were intentionally looking to expose their children to the idea of thinking of others,” he says. “I found it very hopeful that Canadians are looking at the next generation and how they might engage.”

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