charitable sector

I recently returned from a trip to Mexico where I was meeting with NGO’s in Oaxaca State, in a town called Huatulco and presenting at the 3^rd Annual Congress of Non-Profit Organizations of Mexico hosted at University of Hidalgo in Pechuka, just north of Mexico City.

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Why we need strategic philanthropy, not just good financial records…

There has been a lot in the news over the past few months about transparency in the charitable sector.  Most of these articles end up honing in on the cost of raising a dollar, overhead expenditures and tax compliance.  While these financial issues are definitely part of the equation, they should not be the basis upon which strategic philanthropy is based. 

Addressing complex social issues is not just about the financials, it is about the effectiveness of solving the social problem.

In the fall, I posted a brief for the House of Commons Finance Committee on social enterprise and social finance policy development.  The final version, along with others that were submitted can be found here.

The Finance Committee is expanding their work and is now looking at charitable tax incentives.  The crowdsourcing of the last brief proved to be quite successful so I would like to try it again.

Attached is a draft of the submission for the Finance Committee. I will be sending in the final version on January 14th. Please share your thoughts and comments on this blog post. If you would like your name added to the reference list of this paper please let me know so that I can ensure that appropirate credit is made.

Guest blogger – Karine Aviv

Ever since I started working in this sector, I’ve been hearing a lot about fraud.  This is a great concern, because as someone who donates money to charities, I want to know that it is being put to good use, and not going into someone’s personal pocket.  So, what is really going on?

Whew - that's a hard call, when should a charity close its doors for good? Read more »

The Calgary Chamber of Voluntary Organizations (CCVO) released a response to the Alberta Government's 2009 budget in which key funding to the social welfare fabric of the province was cut.

 

This is a copy of the CCVO response:

Budget 2009 Reduces Funding for Alberta’s Community Organizations

(April 8, 2009) - The Calgary Chamber of Voluntary Organizations is disappointed that Alberta Budget 2009 includes a number of changes that reduce support for Alberta's nonprofits and charities. However, facing difficult budget decisions, we recognize the Government's decision to maintain or increase funding for key areas such as arts and culture, seniors, persons with disabilities, sports and recreation, among others.

Changes to the Wild Rose Foundation
The budget cut $8.5 million in funding previously allocated to the Wild Rose Foundation, and $1 million in funding for the Community Initiatives Program. The loss of $9.5 million in funding for community-based organizations could not come at a worse time.  In the current economic environment, many organizations are reporting an increased demand for their programs and services requiring increased funding support, not less.  Other key funding sources such as community and private foundations, and corporate donations and sponsorships have seen a significantly drop in the funds they can grant, and cannot make up this shortfall.

Overall, these changes exacerbate an already uncertain environment and will make it even more difficult for organizations to continue to meet growing community needs. 

Lost Opportunity to Invest in Community Infrastructure
In the face of the current economic downturn, and the call for more shovel-ready projects to help stimulate the economy, it is unfortunate that the Province missed the opportunity to extend the Major Community Facilities Program. In the 2008/09 fiscal year, this program invested $152 million in our communities and if continued, it would have helped kick-start local economic development through upgrading and developing large regional community-use facilities.

Minimal Increase for Preventative Social Services
At a time when the need for preventative social services such as counselling and support for families, children and youth is growing due to the economic downturn, it is very disappointing that the Family and Community Support Services program has only received a $1 million funding increase. The additional 1.4% in funding will not be adequate to meet the growing needs in communities across Alberta. The full implications for Calgary and other regions will not be clear until the funding allocations are made over the coming months.

Other Foundation Funding Maintained
On the other hand, we are pleased that funding for the Alberta Foundation for the Arts; Alberta Historical Resources Foundation; and the Alberta Sport, Recreation, Parks and Wildlife Foundation has been maintained. All of these foundations play a critical role in their respective areas and help ensure that Albertans have access to the services, programs and amenities they need.

Continued Commitment to the Community Spirit Program
The Government is maintaining its commitment of $20 million for the Community Spirit Donation Grant Program. This program, combined with $80 million allocated for the Enhanced Charitable Tax Credit, will support community organizations and encourage individual Albertans to donate at a time when many organizations are facing lower revenues coupled with increasing demand.

 

The CCVO is welcoming responses and thoughts to the provincial budget.  You can post them here or email them directly to:

In both the US and Canada, governments are announcing their economic stimulus packages.  Obama brings on a team of economic advisors ranging from Harvard policy experts and Stanford University economists to past government beauraucrats; Harper met with interest groups across Canada to ensure that his package reflects the needs of the citizens.  At the end of the day the charitable sector wasn't forgotten, but I am not sure it was engaged effectively either.

I wonder, for example, if it is better to do a large long-term investment into the economy (similar to what Obama is suggesting) instead of taking a staged approach.  A staged approach is something that, in working with charities, has been the most effective method of sustainable development.  I think our governments can take a page out of the way the charitable sector manages their finances.

1. Clearly articulate the objectives for the funding and the intended results (long-term vision = impact)
2. Identify ALL the possible sources of funding and timeline to secure those funds
3. Stage the project implementation according to the funding timing AND based on the staged outcomes in order to move the project forward
4. Build in evaluation measures and exit strategies should the program not be achieving its intended outcomes
5. Engage others in your activities

The charitable sector is a very large contributor to both nation's GDP.  Economnic slow-downs are the time to start looking at charitable organizations as partners in weathering the economic storm. 

Donors are becoming more and more savvy in the way they invest their funds.  They are also becoming more cautious of charities as tax-shelter schemes become more prominent in the news.  This means that these individuals are choosing to invest in organizations that have strong reputations, good governance and sustainable funding.  Businesses should be looking for similar clients.  Going where these types of donors are going means that that is also where your business growth can be found.

 

One of the many good things about the holiday season is that it gives me the opportunity to catch up on reading that I have been putting off.  In my pile of MUST READS are several back issues of The Atlantic, Walrus Magazine, Corporate Knights, Business Edge and Mompreneur.  There are not only magazines in the pile, but several books.  One that I had started a few months ago and put aside due to lack of time.  I have since returned to it - The World is Flat: A Brief History of the Twenty-First Century by Thomas L. Friedman.

This book was published in 2005 and with the ever advancing use of technology, especially Web 2.0, it has been updated since the version that I read. 

Mr. Friedman lays out 10 "flatteners" that have shaped the world we are in today, and for me clearly explains how we got into the economic position we currently are in.  But it also got me thinking about how the Charitable Sector can apply some of these concepts.  Learning from what has transpired in the corporate sector as a result of these flatteners (good and bad), I believe there is an opportunity to improve knowledge sharing/ transfer of information between organizations.

Brandy Agerbeck of Loosetooth.com created the following illustration based on what Friedman is saying in his book:

 

Taking Friedman's 10 flatteners I have come up with a list relevant to the non-profit sector:

Friedman's Flattener	Dexterity Flattener	Application to Charitable Sector
Fall of the Berlin Wall	Non-Profit and Voluntary Sector official recognized	Governments around North America began recognizing the economic powerhouse behind the charitable sector.  This in turn paved the way for additional resources to be directed at some of the innovations that were being developed within the sector (not including academic institutions)
Netscape Goes Public	Organizations start integrating technology into their agencies	Telling the agency's story became easier and quicker with the integration of technology.  Not only could organizations highlight their services on a local level, but they could find out about others who are offering similar services in other parts of the world and connect with them too.
Workflow Software	Universities offer degrees in Non-Profit Management	Jobs in the charitable sector become careers.  Professional associations are created and the positions within the sector are legitimized.  Salaries slowly start to reflect the education of those running institutions.
Open Sourcing	Still Under Construction...	Charities have a history of "turf" issues.  This is most likely due to the way that fundraising has been occurring over the years.  What we are seeing now is a breakdown of those silos.  Innovation can only come from cross-pollination of ideas.  The charitable sector is pushing this, most notably, in the academic medical research labs.
Out Sourcing	Third-Party Fundraising becomes the norm	The Rotary Club is probably one of the most visible of this type of out sourcing.  From special events in support of organizations like CAWST and Ronald McDonald House to golf tournaments and parties for Seniors.  These third-party events take the burden of special event planning off the shoulders of recipient organizations allowing them to focus on what they do best - service delivery addressing a need.
Off Shoring	Community Economic Development	It used to be that international development NGO's would go into a country, tell them what was wrong, fix it for those people and leave them in maelstrom.  Ultimately, one would see abandoned equipment and complete lack of know-how by those who were on the receiving end of the aid.  What we are seeing now is a complete reversal of this approach to development.  Communities are putting together what they feel they need to survive.  They are developing the plan and identifying the best ways to implement that plan using indigenous resources.  NGO's are providing some of the technical support, financial investments and resources, but otherwise have empowered those who need the help to figure out how to do it themselves.  What we are seeing as a result are communities growing and learning from within.  As well, products that are produced in those communities are being sold in North American shops like 10,000 Villages thereby generating additional revenue for the community.
Supply Chaining	The Community Campus Idea	A friend of mine used to live in Moncton, NB.  When she moved their from Ontario she was so impressed that she had to go to only one building to get her new drivers license, her new provincial health insurance card and various pieces to start her new life in this new location.  She quipped that if she had to do this in Ontario she would be driving all over town and standing in several different lines to accomplish the same thing.  Clustering is something that is happening within the charitable sector around North America.  I believe this mostly driven by property values and not so much by ease of use for the client, regardless, it is happening.  Organizations that provide services to a similar clientele are starting to share work-space.  As a result, HR and intellectual resources are being shared thereby streamlining the supply chain of the service.  Now a person who is dealing with unemployment issues can also seek assistance for food hampers, emergency shelter, job training and the like.  Each of these services may be provided by different organizations housed under the same roof.  One of the challenges facing these groups however, is the privacy laws around personal contact information.  Each Cluster has had to create statements around how clients' contact information is being shared within the Cluster.  As this model evolves and strengthens new laws governing privacy may be created.
In Sourcing	Capacity building organizations like the Centres for Non-Profit Management and Centre for Philanthropy are created	Access to cross-sector information is made available to organizations.  So an organization that deals with women's health that is going through a management transition can learn from an organization that deals with homelessness that recently went through a similar transition.  The information is "stored" within other agencies that specialize in capacity building and non-profit management.
In Forming	United Way begins facilitating collaborative work between its funded agencies	Donors and other stakeholders begin "forcing" the organizations in which they are involved to work with each other to benefit the common good. Imagine Canada and other similar agencies begin fostering relationships between businesses and charities to share knowledge and best practices.
The Steroids: Digital, Mobile, Personal and Virtual	Web 2.0 and Proof of Impact Philanthropy	Kiva, Donors Choose, ChristmasFuture, Net2 - International charities begin showing proof of impact of donations.

 

Lucy Bernholz is the president and founder of Blueprint Industry & Design Inc.  She is also the author of the blog: Philanthropy2173 has put together similar ideas around how the philanthropic sector is flattening.

So why is this important?  As we move through the ever growing quagmire of our current economic times, understanding the forces at play is important.  I believe that we can take some of these ideas, learn from them, and then apply them more effectively to the charitable sector.  We need to do this now, especially in light of the shrinking economy.