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Public Scandals and Other Observations on Charitable Donations

The COVID-19 virus has offered many challenges in many forms for the Canadian philanthropic sector and their donors.

At the start of the pandemic, veteran Toronto Star business columnist David Olive wrote there are businesses that are heroes and those who are “anything but.” Corporate Canada was, according to Olive, slow off the mark in helping build the “arsenal of health care” akin to a wartime arsenal of democracy that was so urgently required in all communities across Canada. Furthermore, business-related philanthropy in defeating COVID-19 was far short from requirements.

The concept of “hero” pay, the term denoting temporary hourly compensation increases, bonuses and additional paid vacation days for at-risk employees was a progressive initiative for everyone. Individuals leaving their homes for onsite work, primarily necessary services, were the real heroes of the pandemic battle. Maple Leaf Foods, Loblaw, Sobeys and Toronto-Dominion Bank were some of the exemplary employers Olive identified for supporting employees who did not have the option of working remotely.

In mid-September of this year, an Angus Reid Institute (ARI) public opinion survey showed Canadian donors generally giving less than before the pandemic. Nearly two-in-five Canadians who have donated to at least one charity in the last two years indicated their donations have decreased since March. Given that individual Canadian donors gave $10 billion to charities in 2018, this drop in donations represents a heavy volume of lost revenue for organizations providing vital health and social services in communities across Canada. An alarming observation is the impact of the WE charity scandal on the already challenged philanthropic sector. The organization may be winding down operations but the “blast radius” extends far beyond their revenue stream. The survey found a majority of donors agreeing that the scandal is one that raises questions about governance, transparency, and management that are relevant for all organizations, while many say it has changed the way they feel about donating overall. Within this scenario there is a widening interest in the federal government supporting charities facing significant losses. Overwhelming majorities of residents surveyed support measures such as donation matching and direct grants to offset shortfalls and inspire Canadians to provide on-going support. A majority of respondents from the donor spectrum – encompassing individuals who do not provide any support to those who are considered generous – consider the WE scandal as a serious issue. Large donors are least likely to consider the WE scandal a symptom of a broader problem with large Canadian charities, but over half still perceive issues that should be addressed. Four-in-five Canadians say they prefer donating to smaller local charities as opposed to larger organizations that operate nationally.

A Canadian Press report from August 3, 2020, when the scandal was in an earlier stage noted that the non-profit sector was contending with concerns that WE’s aborted deal with the Liberal government would erode trust in charities and the use of social enterprises many Canadians are dependent upon to fund services.

Stephanie Robertson, Chair of Social Value Canada, wrote in the recent Calgary Herald article We should expect more from Canadian business in a post-COVID world that Canada’s non-profit sector is facing a crisis that is not solely the work of a pandemic.

Many organizations that serve Canadians by providing necessary services have been greatly impacted. Imagine Canada has estimated $10 billion in lost donations and earnings and over 100,000 layoffs for Canadian non-profits

across this first year of the pandemic. Ms. Robertson emphasizes this sector was in a very precarious position long before COVID. The future of our charitable, citizen-serving organizations rests upon our ability to change the way we value and invest in our non-profit sector. Businesses who can invest must and create communities and the benevolent economy that will follow the pandemic.

The challenge is there for businesses of all sizes and sectors to contribute to our future.

ABOUT THE AUTHOR Art Sinclair

Art is Vice President Policy and Advocacy for the Greater Kitchener Waterloo Chamber of Commerce.