How to Make Sure Your Charity Donations Truly Help Your Local Community
With transparency being an issue in many charity organizations, we look at ways Canadians can make sure their donations make a difference. Photo: FluxFactory/GettyImages
Since the onset of the COVID-19 pandemic, the charitable sector has provided vital support and services to Canadians through nearly 86,000 registered charities that, in 2018, received about $10 billion in donations.
In 2020, however, Charity Intelligence Canada reported that a substantial proportion of charitable donations are wasted on large charities that aren’t transparent about the impact of each dollar donated.
Given the unprecedented socio-economic impacts of the ongoing COVID-19 pandemic, Canadians must think critically about where they donate to ensure every dollar counts. We encourage Canadians to consider place-based giving, or donating “at home,” through local community foundations that are well-positioned to navigate and bolster the post-pandemic recovery.
Transparency in Charitable Giving
Canadian charitable organizations are under increased scrutiny about the transparency of their operations, in part due to the ongoing WE Charity scandal that features reports of misused charitable dollars and alleged conflicts of interest.
A recent survey conducted by the Angus Reid Institute found that since the WE controversy, more than half of donors “say the scandal leads them to question the governance and transparency in the charity sector more broadly.”
Despite this trend, the Canada Revenue Agency reduced transparency in the charitable sector by changing reporting requirements for charities engaged in non-partisan political activities. The new requirements amount to the public having “far less visibility as to what certain charities are doing,” according to Mark Blumberg, a lawyer who works almost exclusively in the areas of non-profit and charity law.
Given this disconnect between public concerns and government response, Canadians are left with the responsibility to verify the impact of their charitable dollars.
This is not to devalue or question the ethics of Canadian charities or government action. But the current climate around transparency in the charitable sector illustrates the advantages of local, place-based giving through Canadian community foundations.
Community Foundations of Canada, the leadership organization for Canada’s 191 local community foundations, advises empowering local voices through vital conversations and offering locally relevant services. These foundations have the potential to become key drivers of local community development and revitalization in the post-pandemic era.
Local Voices Respond to a Global Crisis
These community foundations are deeply embedded in local regions and municipalities, often governed by board directors who live and work in the area. Through grants, training and other initiatives supporting local organizations, Canadian community foundations have spurred resilience and sustainable development in response to local challenges related to COVID-19.
Recovery requires innovative local solutions to the unique and diverse challenges that Canadian communities face. For example, the Oxford Community Foundation in Ontario has funded local services to address domestic violence. These services are crucial as lockdown measures continue, but access to these services in rural regions have long been a challenge.
Despite the pervasive impacts of the COVID-19 pandemic, community foundations have proven to be flexible and innovative, their relatively small scale and local focus allowing them to respond quickly to the evolving needs of their communities.
A recent report from CanadaHelps, dedicated to increasing charitable giving across the country, indicates that while the total dollar amount of donations has decreased, there are promising new trends in online giving. This flexibility in the philanthropic sector is vital.
The Healthy Communities Initiative, a $31 million federal government initiative, is managed and dispersed through a local community foundation collaborative. It considers “innovative digital solutions” as one of three pillars toward local community recovery.
Helping Under-Served Communities
Without established connections to local communities, transnational or national Canadian charities are at a disadvantage in understanding and addressing local needs, particularly in rural areas, which are all too frequently ignored and under-served. Data-driven, evidence-based solutions designed by local community voices can build momentum toward post-pandemic recovery — with adequate funding and supportive policy.
Issues persist in the sector with local, place-based organizations working hard to retain adequate funding to meet the demand for services in their region. Arthur Bull, the former chairman of the Rural Communities Foundation of Nova Scotia, says that despite local pockets of wealth across Canada, the reality is that “very little [wealth] goes to helping people build vibrant communities, dealing with local issues.”
Community foundations are uniquely connected to help address this gap within their local service areas and therefore have the potential to effectively facilitate recovery efforts post-pandemic.
We are currently working with a team of researchers from across Canada to investigate the connections between philanthropy and community to understand and inform best practices. This will help organizations maximize their impact.
Coupled with the growing uncertainty surrounding transparency in the charitable sector, place-based charitable giving can provide peace of mind for Canadians to better understand the impact of their donated dollars.
Instead of wondering if their donation was misused or helped to cushion senior executives’ salaries, Canadians can give to their communities through community foundations — and take comfort in seeing the tangible, local results from their donations.