Federal advisory committee on the charitable sector lacks transparency and diversity, say some, leading to more “conservative” finding on DQ debate

Gabe Oatley’s journalism on this story is made possible by the Future of Good editorial fellowship covering the social impact world’s rapidly changing funding models, supported by Community Foundations of Canada and United Way Centraide Canada. See our editorial ethics and standards here.

In late September, Leanne Burton was at her home office in Etobicoke, Ontario, when she first read the advisory committee on the charitable sector’s report on the disbursement quota. She was disappointed, but not surprised.  

The committee, composed of top charity and foundation leaders, academics, lawyers and a few CRA bureaucrats — had not recommended that the government increase the disbursement quota — the rate at which foundations must redistribute their capital to charities. 

Burton had hoped they would, personally believing that a change would be good for the sector. Their finding, she thought, was aligned with the perspectives of a committee that “lacks a diversity of worldviews” and “represents the interests of the funder community more than the interests of civil society.” 

Burton wasn’t alone in her disappointment. Across the country, Trilby Smith, a Vancouver-based evaluation consultant felt similarly, frustrated that the committee wasn’t willing to recommend even a modest increase. 

“I’m not privy to their conversations. I don’t want to say that they’re out of touch, but I think that their attitude is very conservative,” she says. 

“It feels frustrating to people, myself included, who are like, ‘We have this advisory committee and they have the ear of the federal government and they’re not willing to push on this issue,’” says Smith. “In my experience of the sector, the closer you go to the ground, or to the frontline, people are kind of like, ‘It’s a no brainer. Like why wouldn’t you increase it?’” 

For more than a decade, charity staff and policy wonks have called for a home within the federal government. 

In 2019, they got a partial victory — the creation of the ACCS — a committee of civil society representatives and bureaucrats that offers advice to the Ministry of National Revenue and the Commissioner of the CRA on key charity policy issues. 

But three years after its creation, some, like Burton and Smith, are left disappointed with the committee and their work on the disbursement quota, citing a lack of diversity, transparency and consultation with the sector. And are left wondering: How did we get here? And where might we go next? 

Committee appointment was a ‘bit of a black box’ 

In November 2018, the federal government announced its intention to create a permanent advisory committee on the charitable sector, as part of its fall economic update. 

For Hilary Pearson, then president of Philanthropic Foundations of Canada, the announcement was exciting. For several years, Pearson had lobbied the government to remove restrictions on charities engaging in political activities. That advocacy was often tough, however, because without a permanent committee, the sector’s engagement with the government was “ad hoc,” she says. “We would ask for meetings and they might or might not agree to talk to us.” 

The announcement of the ACCS promised something different — a permanent group that would offer sector perspectives on key policy concerns; and a chance for two-way dialogue with policymakers.  

Following the announcement, Pearson and Bruce MacDonald, the CEO of Imagine Canada, were asked by representatives from the Ministry of National Revenue to serve as the co-chairs of the ACCS. 

As to why the pair were approached to hold these positions, Pearson chalks it up to sector expertise and familiarity. “We had made umpteen presentations and so they knew us. We were familiar to them. And I think we both saw it, when we were approached, as a positive step forward,” she says.  

Some months later, on August 23, 2019, the government announced the full membership of the 17-person committee. Fourteen members from the sector and three from the government. Members were all sector leaders — heads of charities and foundations, lawyers, and academics. 

The announcement of the committee was met with warm reception across the country. 

But for some, the committee’s lack of racial and experiential diversity has caused concern. “It’s a very white committee — like very white, and the [charitable] sector is not,” says Trilby Smith, underscoring that the voices of people of colour, Indigenous people, and people who work in front-line organizations were under-represented on the committee. (Just two members of the 17-member committee are racialized: one Indigenous member and one Black member.)

For Louise Adongo, executive director of Inspiring Communities, a Dartmouth, Nova Scotia-based non-profit, the lack of experiential diversity on the committee has raised concern. “Who are the people around the table? Are those voices that should be there? Are we centering those most impacted?” she asks, suggesting that the committee should include representation from LGBTQ people, people with disabilities, and people with lived experience of homelessness. 

But Pearson says that the ministry was never trying to make the committee fully representative of the charitable sector. Rather, they wanted to keep the committee small and wanted a group that was able to “fairly quickly get into action,” she says. This requirement assumed a “certain level of familiarity with CRA and income tax and how the whole system works.”  

According to a CRA media spokesperson, committee members hadn’t been selected based on a call for volunteers, but rather were “appointed” by the Minister of National Revenue or the Commissioner of the CRA. Pearson and MacDonald were asked for their advice on who else to select, but beyond that, the selection process was “a bit of a black box,” says Pearson. 

In the committee meetings that followed over the next two years, the group hashed out and worked on its key priorities: making CRA work better for charities, supporting charities to serve vulnerable populations, and improving sector data collection, to name three. Through working groups, they consulted with charities, non-profits, academics, lawyers and consultants across the country. And they worked alongside CRA officials, offering timely advice on how the sector was being impacted by COVID, and rubbing shoulders with top CRA officials, including Minister of National Revenue Dianne Lebouthillier. 

In 2021, the group published three reports, offering a whack of recommendations from each of its working groups. But despite the broad sweep of their recommendations, none of the committee’s work got as much attention as their advice to the government on the question of raising the disbursement quota.  

ACCS work on the DQ has lacked transparency, say some 

The committee’s report on the DQ was published in late August. In it, the committee did not offer a definitive answer on whether the government should raise the DQ. Instead, they suggested that the disbursement quota was “but one tool in the policy toolbox” and that without implementing other suggested reforms would not facilitate more funds to reach the most vulnerable.  

Instead of a DQ raise, the group recommended several other policy changes, including: simplifying the instructions for completing the annual charitable T3010 tax form, speeding up the implementation of a digital T3010 form, increased education for accountants who need to fill out the form — and, perhaps most germane — a regular review of the DQ rate question. 

For Malcolm Burrows, the head of philanthropic advisory for Scotiabank, and a keen participant in the DQ debate, the findings were not what he’d hoped. “I thought the August statement was very cautious, and even evasive — and so it was a bit disappointing, frankly,” he says. “I see where they’re coming from, but they’re not fully engaging with all of the issues.” 

For Smith and Burton too, the committee’s conclusion was disappointing; but so too, they felt, was the process used to generate it. 

“[The committee’s] research and consultation process has been pretty unclear,” says Burton. The MakeWay partnerships director says that through the grapevine she had heard about people being asked to participate “here and there” in conversations with ACCS members, but that there was no public call for participation in any consultations.

“We’re talking about influencing the future of the charitable sector in Canada that is in service of chronically marginalized people, or should be. So whose voices are missing here? A lot of voices are missing,” she says. 

Further, in a blog published on his website, charity lawyer Mark Blumberg asked why the ACCS submission on the DQ was first published on the corporate letterhead of one of the committee’s members — not on the standard federal letterhead. He also asked why the ACCS DQ report had not been published on the federal website, as was the case with the committee’s other reports. 

In addition, Future of Good learned that in preparing their submission, the ACSS established a sixth working group focused on the DQ. But unlike each of the ACCS’s other five working groups, the names of the members of the DQ working group were never published online. 

In response to questions on these issues, ACCS members chalk it up to bad timing and honest mistakes. 

“It was a bit of an awkward alignment of stars,” says Bruce MacDonald, committee co-chair, and member of the committee’s DQ working group. Pearson says that the committee was publicly asked to provide the department of finance with their advice on the DQ on August 6, the same day that the federal government launched its public consultation on the disbursement quota. Nine days later, however, the federal election was called, sidelining all government staff into “caretaker” mode.  

For the committee, this meant that they no longer had access to support of a federal secretariat — a group of federal bureaucrats who support the committee to host and coordinate their meetings. This limited the committee’s capacity to host any additional consultations, says Pearson. 

Furthermore, she says, “there was no budget set aside for a really proactive consultation process” on the DQ. 

The six-year budget for the ACCS is $3.2 million, or about $530,000 per year. According to Pearson, the vast majority of the budget has been used to pay for the secretariat. These staff, she says, have supported the committee in arranging more than 100 committee meetings, some of which required translation services. (Future of Good asked the CRA for a more detailed breakdown of the budget, but was provided with no additional information.) 

In addition to budget pressures, the co-chairs also explain that they were hamstrung by personnel. Near the end of August, half of the members of the ACCS officially finished up their two-year term of service, limiting the number of people who could support the committee’s work on the DQ, they say. 

Arlene MacDonald, DQ working group chair, says that the same sorts of issues plagued the publication of the names of the working group members and the publishing of the committee’s report on the DQ. 

“The timeline was such that we didn’t have our secretariat anymore, and so nothing was being posted to the CRA website,” she says. This meant that the new working group was not posted to the website and that the final DQ submission could not be posted there either. 

And further, she says, the publishing of the committee’s DQ report on a committee member’s corporate website was a “straightforward clerical error,” — nothing more. Terrence Carter offered to configure the report for the group, she says, because his firm had the administrative capacity to do so. But in publishing the report, a member of his staff put it on the firm’s letterhead, rather than the federal one. 

While some of these explanations satisfy Burton, others don’t. She wonders why all of the committee’s work on the DQ needed to happen in August alone. After all, it was back in April, when the federal government announced in its budget its intention to consult the sector on the question of the DQ. (Following this news, for instance, she joined a working group with Philanthropic Foundations of Canada to consult with members on this issue — engagement that ran from April to September, when the submissions were due.) 

In addition, she says that there are other ways that the committee could have published their report beyond the government website. And moreover, she and Smith wonder about other ways that the whole consultation process, including both the work of the committee, and the work of the federal government, could have been more inclusive. 

“You could do consultations, and you can open your door and get stuff in. But if you’re not actively outreaching, then I don’t think you’re really consulting,” says Smith. 

In all, the department of finance received more than 100 submissions on the DQ consultation from charities, organizations and individuals in the form of emails and letters, according to a CRA spokesperson. (Future of Good requested these submissions from the department of finance, but was denied access. “We recommend reaching out directly to organizations for questions on submissions,” a spokesperson said, by email.) 

Taking a more “holistic view” on “modern systems change” 

Last spring, the government called for a new group of volunteers to join the ACCS. 

Seven members finished their two-year terms in August, and new members are needed to replace them. In response to that call, over 200 people applied to participate. The process closed in late May, but the government has yet to release information about the selection of new members. 

Many across the sector, including members of the existing ACCS, are hopeful that the group is more representative of the charitable sector.  

Louise Adongo hopes that the ministry takes into account the findings of the Unfunded report, research that found that donations to Black-led initiatives make up a small fraction of total donations in Canada. She wants to see more racial and experiential diversity on the committee. 

“I think having the advisory committee makes sense. [But] I think the members of the advisory committee or the structure surrounding the advisory committee need to examine themselves in light of the fact that we’re now in January 2022,” she says. 

Bruce MacDonald says that he and other members of the committee share these concerns, and have given “very strong feedback” to the Minister’s office that it needs to be addressed. 

But for Burton, the changes she hopes for go beyond just increased committee diversity. She wants a bigger, “more intentional harvesting” of opinions in the community on charitable policy reform, and less “top-down” approach to consultation from the ACCS moving forward.  

She suggests that working groups should be able to include members beyond just people on the main committee, that the process for selecting committee members should be more transparent, and that the approach to consultations — when they take place, and who they talk to — should be made public. 

“This is modern systems change,” she says. “I just really hope that the [government] takes a much more holistic view of this. And that they work in a way that they’ve never worked before, so that we can land in a place where philanthropy is truly serving net positive social outcomes.” 

This story has been updated to reflect that the ACCS has one Indigenous member and one Black member. A previous version of the story falsely claimed all but one member of the committee were white-passing. Future of Good sincerely regrets the error.

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