Charting the Future Course of the Charitable Sector: Is the Government now a Catalyst for Change?

Charities and non-profits have been one of the hardest hit sectors by the COVID-19 pandemic. The demand for services has risen while revenue streams have dried up as Canadians forego events and gatherings –and for good reason. In addition, the crisis has demanded the sector pivot from services delivered in-person to services delivered through technology. Some charities, like the YMCA, have been forced to sell facilities to stay above water. Not only are there pockets of extraordinary need– which have been recognized by the government in previous announcements, such as food banks, shelters, and mental health services–but there are a multitude of other services that form the backbone of our society that are in distress.

During this National Volunteer Week, it is important to recognize the valued work volunteers do to help their communities. Whether it be delivering a meal, canvassing for support, or donating services and time, volunteers are the drivers of the many activities carried out by charities and non-profits. The pandemic has certainly affected these efforts but not their determination to help. We applaud and thank them for their services and contributions to the social fabric of our great country.

We were encouraged to see that the recent federal budget paid attention to the advocacy efforts by charities and non-profits –we of course would like to see more. We also would like to point out that the budget is not the only way the government has expressed its views on the sector. Recently, the government responded to Catalyst for Change: A Roadmap to a Stronger Charitable Sector, the special Senate committee on the Charitable Sector’s report and its many recommendations that would propel the sector to new heights.

The federal budget announced a $400 million Community Services Recovery Fund which will be welcomed as the sector struggles to make it beyond the recovery. This program needs to be rolled out quickly to provide core funding with priority for small- and medium-sized charities and non-profits.

The extension of wage and rental subsidies and the new Canada Recovery Hiring Program could also defray some of the fiscal and labour stress on the sector. But it is very important that charities and non-profits, who draw on these programs, not be barred from the Recovery Fund.

The $200 million contribution to the creation of a Black-led Philanthropic Endowment Fund will go a long way to close the gap between the funding of Black-led organizations and the rest of the sector. The government has also recognized the potential for innovation in the sector by announcing the launch of the Social Finance Fund as well as the Investment Readiness Program to equip the sector to participate in innovation.

The sector should be encouraged by the announcement that the federal government is looking at the annual disbursement quota for philanthropic endeavours. There are many different points of view on this matter and the planned consultation process could help point the way forward.

We also would like to point out that even though the investments in child care, affordable housing, women’s empowerment, and food security may not be directly targeted at charities and non-profits, their impact will have a positive effect on the sector because many charities and non-profits are engaged directly in services in these areas or work with people who need these services.

While we are encouraged by this progress, the budget makes no mention of key priorities identified by many in the sector and that were laid out in our Senate report. There was no formal announcement to create a secretariat for the sector, although the government’s response indicated support for this. Additionally, there was no indication as to whether the government will pursue a modernized definition of what is “charitable” so that we move away from an outdated Victorian-era definition. We are disappointed that the government has chosen to shy away from amending the language of “own activities” from the Income Tax Act to enable charities to establish equal partnerships with non-charities. We also hope that the government will amend the T1030 forms to mandate a question on board diversity.

Taken as a whole, we are pleased that the charitable sector is finally being taken seriously by the government; however, we still have a long way to go. It seems that the sector is closer to being treated on equal footing with the overall business sector. But the government still must proceed with other much needed reforms as we noted in our Senate report. More structural reforms to systems and to the machinery of government are required to further underline the importance of the charitable sector. Canadians are depending on it.