On September 29, 2021, CFC submitted our feedback on the Government of Canada’s consultation on “Boosting charitable spending in our communities”. The disbursement quota was created to make sure charities were moving resources to address societal needs. Many conversations around the disbursement quota have been debating percentages. Should it be 3.5%? 5%? 10%?
These conversations tend to be reductive and risk being a distraction at a moment when the federal government can play a critical role in better enabling philanthropic organizations to meet the needs of their communities now and into the future. We need to challenge this framing and ask ourselves to think bigger. If we focus solely on the disbursement quota, we miss the opportunity to open the conversation to the system of philanthropy, its role, and its broad regulatory relationship with the government. Examined on its own, a DQ recommendation is a stopgap measure that cannot produce meaningful progress.
During the pandemic, we have witnessed how philanthropy can dramatically rethink what is possible. As we work towards a just recovery, this consultation is a unique opportunity to create transformational strategies for positive change.
A diversity of perspectives
CFC consulted with its network, partners, constituencies, and communities historically excluded from public policy processes to craft this submission. We heard a lot of different perspectives and received significant feedback from across the network. Thank you to all who shared their ideas and insights.
Community foundations operate from coast to coast to coast across different geographies, serve significantly different communities and are at a myriad of stages of development using various business models. Not all community foundations operate in the same manner or with the same priorities.
The views expressed in this submission are from CFC’s vantage point as a national organization. They are based on these consultations but do not reflect a consensus from community foundations.
Making changes
For societal transformation — generating concrete and long-lasting wellbeing — we need a new social contract, supported by broad sector and regulatory modernization that ensures philanthropic organizations maximise their impact through:
Governance and Management
- We recommend that the annual CRA T3010 charity reporting form include questions about the diversity of boards of directors.
Endowments and Investments
- We recommend that the government create policies that activate non-dispersed assets philanthropic organizations hold through mission related investments.
- We recommend the government work with provinces and territories to create flexibility for foundations to update normally unalterable donor trust agreements, reducing barriers for philanthropic organizations to explore alternative models to meet community needs.
Grantmaking Practices
- We recommend that to simplify grantmaking rules the current government re-introduce and pass the content of Bill S-222 and that the government work with the charitable and nonprofit sectors to reform and relax the existing rules on non-qualified donees and direction and control.
- We recommend the Income Tax Act be updated to allow organizations governed by the act to a) adopt charitable purposes aligned with remedying root causes of complex social and environmental challenges, and to b) ensure they are empowered to participate — along with other partners like governments, the private sector and academia — in societal missions that can solve such challenges.
- We recommend that a meaningful DQ increase is necessary but wholly insufficient to tackle the challenges we face.
While these recommendations provide important context in support of the consultation process, our submission has not provided a number by which the government should increase the DQ. By providing a number, this submission would be affirming the consultation’s primary but flawed question, and upholding a regulatory system in need of a more fundamental overhaul. And, while like many organizations, we recommend that a meaningful DQ increase is necessary, it is wholly insufficient to tackle the challenges we face.
This is not a time to accept the status quo. This consultation is a moment where we all have the chance to bring boldness to bear and bring a holistic approach to modernizing the regulatory environment in pursuit of societal transformation.
Government regulations are one influence on the practices of philanthropic organizations. Alongside this submission, we have our own work to do towards a just recovery, towards a philanthropic sector built for the 21st century—one that centres community, embeds equity, accelerates impact and sets the scene for a future where everyone belongs.
“COVID-19 presents Canadian philanthropy with the opportunity to transform how we create social value. We can scale up our vision, strengthen our representivity, responsiveness and partnerships, and innovate our institutional and program capabilities. Modernizing the public policy regulatory regime is one key building block for our new social contract for societal transformation.”
Andrew Chunilall, CEO of Community Foundations of Canada
