Top Six Takeaways for Fundraisers from the Special Senate Committee Report (Part 2)
On June 20, 2019, the Special Senate Committee on the Charitable Sector released its report Catalyst for Change: A Roadmap to a Stronger Charitable Sector. Within the report’s 190 pages, the committee outlined 42 recommendations for the federal government to implement with the intention of strengthening the nonprofit sector. The report was the culmination of 18 months of public hearings and written briefs. More than 150 witnesses, including several AFP members, appeared before the Committee, and over 90 individuals and organizations submitted briefs.
Many fundraisers have asked what the report’s recommendations mean for them. AFP has put together the top takeaways from the report with the potential to have a huge impact on the fundraising profession. Here are numbers 3 and 4.
3. Unlock more giving by increasing the minimum disbursement quota for charities and donor advised funds.
Recommendation 36 (p. 113) That the Government of Canada direct the Advisory Committee on the Charitable Sector to examine the advantages and disadvantages of amending the disbursement quota for registered charities; and the advantages and disadvantages of setting the disbursement quota in regulation, rather than statute.
Recommendation 37 (p. 113) That the Government of Canada instruct the Advisory Committee on the Charitable Sector to consider means of ensuring that donations do not languish in donor-advised funds but are instead used to fund charitable activities in a timely fashion.
There is currently no minimum disbursement quota mandated for donor advised funds (DAFs), which means a DAF is not required to grant any money to any charity on an annual basis. In addition, there are no external standards for reporting, which means that in and out funds are reported along with payouts of income from endowed funds. This lack of clear information around giving through DAFs means we do not know how much–or how little–is sitting in DAFs that could be unlocked to fund charitable activities. Establishing a minimum annual disbursement quota for DAFs would free up more funds for charitable activities, as would increasing the disbursement quota of charities, which is currently only 3.5%. With giving in Canada stagnating, and receipted donations sitting in DAFs and charities’ own accounts, failing to address this issue is a huge danger to the nonprofit sector and the growing number of Canadians who rely on charities for support.
4. Decrease the administrative burden and restrictive nature of government funding.
Recommendation 10 (p. 45) That the Government of Canada, through the Treasury Board of Canada Secretariat, develop policies that require departments and agencies to compensate full administrative costs associated with delivering the services being funded in transfers to charitable and non-profit organizations.
Recommendation 11 (p. 46) That Government of Canada initiatives that support the sustainability of for-profit sectors, particularly with respect to overhead and infrastructure costs, be extended to the charitable and non-profit sector.
Recommendation 12 (p. 47) That the Government of Canada, through Treasury Board of Canada, ensure that grants and contribution agreements cover a minimum of two years, renewable as appropriate; and that the level of information required for both application and reporting on these agreements be commensurate with the level of funding, minimizing complexity for smaller amounts.
Recommendation 13 (p. 49) That the Government of Canada develop and implement a standardized set of reporting categories and an on-line tool for charitable and non-profit organizations to submit financial reports based on these categories. The Treasury Board of Canada should be tasked with working with federal departments and agencies and federal/provincial/territorial working groups.
A significant number of Canadian charities rely on some form of government funding. For charities funded by the federal government, these recommendations, if adopted, would decrease the pressure on fundraisers to secure additional funding to cover the full administrative and operational costs associated with running programs and initiatives that the government currently does not fund. The recommendations would also provide more funding certainty for programs and get fundraisers out of the annual grant writing cycle to maintain current funding levels.
By guaranteeing a minimum of two years for contribution agreements, programs will have a stronger chance of demonstrating their viability and impact, making them more attractive to other donors, especially those who might be reluctant to be the first funders to support a project. Standardizing reporting requirements and making reports easy to submit online would be a significant time-saver for organizations. These proposals also have the potential to reduce costs associated with contracting this function out, and at the very least, enable fundraisers and program staff to spend more time on work that furthers their organization’s mission rather than filling out paperwork.
The recommendations in the Senate report can significantly change the nonprofit sector for the better. Though these recommendations are just suggestions for now, moving forward any of the 42 ideas would demonstrate a serious commitment by the federal government to a sector that in 2017 contributed 8.5 percent of Canada’s Gross Domestic Product (GDP), equivalent to $169.2 billion, and employed 2.4 million Canadians.
AFP Canada has prioritized the report’s 42 recommendations and will continue to work with our sector partners–Imagine Canada and CAGP, for example–to ensure these recommendations become reality for the benefit of all fundraisers, charities and Canadian society as a whole.
If you are interested in learning more about AFP Canada’s advocacy efforts, visit our Impact & Advocacy webpage.
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