Is the social sector ready for a modernization fund? Senator Omidvar weighs in.
Why It Matters
The social sector is trying to tread water and build a lifeboat at the same time. As charities struggle with a drop in revenue from the COVID-19 pandemic, they are also trying to upgrade their digital processes, funding models, and HR practices.
Modernizing Canada’s charitable and non-profit sector is one of Senator Ratna Omidvar’s main missions in office.
Since her appointment to the Senate in 2016, the independent Ontario senator has served as the deputy chair of the Special Senate Committee on the Charitable Sector, alongside Senator Terry Mercer, and is currently trying to pass Bill S-222, a Senate bill that would allow charities to provide resources to non-qualified donees — a major shift in charitable policy.
The sector has arguably not been a major priority for the current Liberal government, but the $400 million Community Services Recovery Fund is an exception. Announced in the latest federal budget, the Fund will provide money to charities and non-profits that have struggled to modernize their operations for years. But it comes as many of those same charities are just trying to keep the lights on.
Omidvar believes, however, that modernizing the sector is a long game. She spoke with Future of Good about the Community Services Recovery Fund, the need for digitally savvy non-profit workers, and how the recommendations of the Special Senate Committee on the Charitable Sector may have changed if it had been published after the COVID-19 pandemic began.
The following conversation has been edited for clarity and length.
The Community Services Recovery Fund is offering $400 million to help the charitable and non-profit sector “adapt and modernize.” Is that enough money?
The sector is so big. It is so diverse in every sense of the word. We have charities and non-profits engaged in the environment and culture, and international aid, in education and health. It is so wide and so diverse and so broad that, of course, the answer to your question has to be: no, it is not. But it is a good start.
If the money is spent well and the government can clearly understand the impact of increased investments in the sector, I believe it is a place to start and build towards the future.
What aspects of sector modernization should be prioritized with the use of this fund?
At this point, I would suggest that our first concern should be the ongoing health and stability of the sector as it is today. The sector we know is hurting. It’s been hit hard by a decline in revenue, by a decline in donations, and in being required to pivot to digital platforms. So on the one hand, there is less money. On the other hand, there is more demand, even though the government has, outside of the $400 million fund, released hundreds of millions for charities that are dealing with hard-hit communities such as violence against women and the mental health of children, and they’ve also added another fund to disperse through the United Way and community foundations. This fund should be used to stabilize the sector as it struggles to embrace the recovery.
The government should, in the first instance, use this money through a lens of “big-small-medium charities”. That’s maybe a crude but really effective way of understanding how to work with the sector. There are big charities that would need a different kind of support because they have large payrolls. Medium sized charities have different needs and small charities, who may not even be on the horizon, but are really essential to the fabric of a local community — they should also be considered. I would suggest the government should use that lens and get the money out of the door in an accountable, impactful way.
The second proposal I would make to the government is that they should pay special attention to those charities who have not been able to access emergency funding for the wage subsidy and other reasons. Finally, I would say, a special effort has to be made by the government to use some of these funds to strengthen charities that are fighting for racial justice — whether it is racial justice for minority communities or whether it’s justice for Indigenous communities.
I would use this fund as a ‘ready-start-go’ fund as opposed to strictly modernizing the sector. Modernizing the sector means an investment in HR capacity. It means an investment in digital and technological capacity, and I believe it should start with creating a home in government for the sector where a cross-cutting conversation can happen.
Is there anything you would change about the Community Services Recovery Fund’s scope, or who it is intended for?
Charities and not-for-profits — that’s a pretty broad umbrella. Small businesses have their own recovery funds. So I think it’s appropriate that it is focusing on charities, not-for-profits, possibly social enterprises that bridge the two.
How confident are you that the fund will be deployed quickly?
I think the government has to do some work to develop the criteria and accountability mechanisms and to make sure its own capacity is there to evaluate submissions and ideas. I’ll point out that their pledge to fund Black-led organizations had a rocky start because many Black-led organizations were not approved for some bizarre reason. I think the government has to be sure it is ready. The sector certainty is ready to make submissions.
It’s really important for charities to be transparent and accountable because we all know the harm that the WE Charity scandal has created, and so I think there should be caution, but without embracing endless delay.
That’s a tricky balance to strike.
I’m glad I don’t have to find that.
Are there any accountability mechanisms that you can think of that might be useful for the government to consider when it is rolling out this money?
I would say the government must do its due diligence. It needs to work through sector organizations like Imagine Canada and Community Foundations of Canada and United Way Centraide Canada, the Canadian Red Cross, and Cooperation Canada — I think those are solid places to have conversations with the sector because the sector is so broad. The government must have an interlocutor and, again, a home in government would be perfect to have those conversations.
The people of Canada also want and deserve accountability for tax dollars and I would suggest that the government has an unhealthy habit of focusing on inputs and outputs [of charities]. It needs to focus on impact [of a charity on society]— not just equity of input, but equity of output.
The Special Senate Committee on the Charitable Sector’s report is mainly about what the federal government can do to modernize the sector. What about provincial or local or First Nations governments? Do they have a role to play?
Let me address the matter of provincial governments. Technically, charities and non-profits fall under their purview. But because of the charitable dollar regime, which is federal, the CRA takes a greater prominence in the life of a charity than the province. When we were talking to witnesses during the charity committee, we were not able to get a single provincial government to testify. That just gives you an idea that maybe provincial governments need to get their act together as well.
I know that conversations are held with the Ontario government because of [the Ontario Nonprofit Network’s] fantastic leadership. I’m not sure whether there is a like institution in other parts of the country — I’m sure there are, frankly — but they need to ramp up that conversation around fair pay, standards, labour law, and monitoring. Because, let me tell you, the sector is not pure in matters of employment, either. I will again recall what we concluded in the charities report: the very people who are tasked by Canadians to help the most vulnerable are themselves extremely precarious because they go from contract to contract with very few benefits, no job security, no sick leave. This is the underbelly of the sector. It has to be addressed.
How confident are you that governments can address it?
How confident was I, 15 months ago, that we would find a COVID-19 vaccination? I think the pandemic has upended our expectations, in a positive way, on what can be possible if we put our minds to it. Now the vaccination was a global effort and this conversation is uniquely Canadian. I will say that Canadians now know that the charitable sector provides many of the services that they demand from government.
The Special Senate Committee report came out with dozens of recommendations on how to improve the sector well before the COVID-19 pandemic in 2019. If you could go back and edit them, what would you change?
The one recommendation that I would change, in hindsight — I would have a whole chapter on it! — would be the technological capacity. We did not, frankly, pay attention to it. I would have had a whole number of witnesses appear to advise us on what exactly the capacities, the promises, and the weaknesses in the sector that prevent it or enable it to embrace technology — as a means of not just delivering services, but of engaging with Canadians in a far more meaningful way.
Are there any aspects of sector modernization that can only be handled by the sector itself, rather than government?
I think the governance equity recommendation can be handled by the sector. I mean, we do need national data which the CRA can produce. The big sector organizations could easily put a mandate on change and timelines, and set up some conditions and criteria — they could do that.
What about the question of providing decent working conditions? Do you think the sector can handle that itself?
That’s an excellent question. The decent work question needs to be dealt with more provincially rather than federally, although the sector is funded by federal grants. If there was a home in government, we could have a conversation with the sector about baseline standards on…fees funded through grants, and benefits, and security of employment. All of those conversations could be had but in the immediate, those conversations need to be happening with the provinces.
When it comes to digital technologies, do you think the sector actually wants to update its practices? Is there a genuine appetite for change?
I know the sector will not survive without embracing digital platforms. And I think that the sector knows that too, after the crisis. The question really is — what capacity does it have? With capacity, we can talk about it in terms of technology, but really by capacity, we’re talking about talent. The sector does not really have the capacity to hire the talent that it needs to be digitally savvy that it needs to — that is digitally savvy, that is young and cutting edge. These young people who graduate from university may be mission-driven and really want to ally themselves with a charity, but the money or the working conditions simply aren’t there.
What is the most important aspect of sector modernization?
I think the one that stands out is the limitations on what charities can do with the charitable dollar because of the “own activities” test [a principle in the Income Tax Act that requires Canadian charities to use their resources solely to carry out their own charitable activities]. Lifting that language from the Act would…create partnerships of equality as opposed to what I’d say is a colonial view. This is important, not just for Canada’s international development and aid charities, but more so for Canada’s domestic charities that are engaged in racial justice and racial equity — because they are prevented through the legislation from sharing in the financial equity of this country.
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