Pandemic-Battered Charities Seek a Lifeline by Running For-Profit Businesses
Kieran Leavitt and Senator Ratna Omidvar discuss the need to make is easier for charities to work with social enterprises.
In June, WE Charity was awarded a deal from Ottawa to deliver $544 million in grants to student volunteers as part of a pandemic relief program. The agreement was abandoned when financial ties were revealed between the charity and family members of Prime Minister Justin Trudeau, as well as ties to Bill Morneau, who resigned as finance minister in the wake of the scandal.
Now, advocates say there’s anxiety throughout the sector that the WE Charity scandal could give people pause before donating to any charity, adding to the fears that donations could soon dry up.
Sen. Ratna Omidvar has been calling for a review of the legislation governing non-profits and charities since last summer.
“Social enterprise needs to find a way to work with charities and charities need to find a way to work with social enterprise without these convoluted arrangements,” she said.
“I’m not sure they do anything to protect the public interest.”
Omidvar helped lead a Senate committee looking at the charitable sector before it put out a report in June 2019. One of the suggestions was for the Canada Revenue Agency to run pilot projects to see if charities that run businesses lose sight of their overall missions.
“It seems to me to be completely unfair to strangle the future of charities by not looking at this law again and taking the lid off these restrictions,” she said.
Omidvar said there should still be some barriers in place, like not sharing directors between the charity and for-profit side.
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