The Savvy Do Gooder Take on Budget 2012

Last week, a new federal budget came out here in Canada, with some items on charities.

They’re mostly about stricter financial reporting rules around political activities and foreign donations, and an $8 million dollar audit is planned to make sure that charities are following the rules.

Some people are alarmed about what this will mean for charities, saying that it’s a lot of time and money to spend on something that’s not a significant problem, and an unreasonable burden on charities to address something that’s barely an issue – see here and here.

An Analogy

Imagine you’re a business owner. You have staff on salary, and contractors you outsource to. The salaried people get steady work. When they’re overloaded, or you need something they aren’t equipped for, you turn to the contractors.

The contract people and the salaried employees often work together. But ultimately, who are they all accountable to for results? Who’s responsible, who signs the checks?

That’s right – you. You’re the boss.

What would happen if you stopped paying attention, no longer noticed whether anyone was producing or not? If all you ever checked before signing the checks was some arbitrary financial measure, like what percentage of revenue is spent on rent?

And what if, when those numbers displeased you, you blamed the salaried people, yelled at them, and replaced them? If only to avoid your wrath, they might start to obsess over whatever measurement you did pay attention to, regardless of whether it had any bearing on the quality of the work.

The employees would probably crack down hard on the contractors. Someone would have to – the boss (you) isn’t paying attention, and the contractors are not the ones who take the heat when you’re unhappy. In cracking down, they would likely focus on the same meaningless financials you do.

The Connection

That, in my view, is what we have happening here in Budget 2012. The government is the employee. The charities are the contractors. They’re all supposed to be working toward the same goal – a healthy society for all – and they both have the same boss – us.

The government has gotten the idea that it’s their job to police the charities. They’re not equipped to hold them to any meaningful standard. So they fall back on the one thing they do know how to measure – finances – and beat that to death in a desperate attempt to keep us happy.

But what do we expect? Whenever a charity is exposed as less than stellar, the cry goes up for stricter rules. “The government should do something!”, we shout. So the government tries, and makes a mess of it. Case in point: Budget 2012.

Government doesn’t really have any business policing charity. As I’ve said before, government and charity are the left and right wing answers to the same question. They’re inherently opposed. Every dollar that goes to charity is a dollar that does not go to government. That alone should disqualify them from policing each other.

The only people truly qualified to make charities accountable for the things that matter are the charities’ supporters – us. We’re the only ones who know what the things that matter actually are. We’re the ones who want the change we’re investing in; who understand the results we’re looking for.

If we want the government to stop mucking about with charity accountability (and I think we do), my view is that we need to take back responsibility for it ourselves. We need to let government know that this is not their job, and accept the idea that when we choose to give, it becomes ours.


  1. Gena Rotstein April 3, 2012 at 9:16 pm - Reply

    First – thanks for the link!

    One other important distinction is that over 50% of Canadian charities receive government funding by way of contracts for service (see health related organizations) or grants. If we extend your case further, the relationship between the Contractor and the Contractee becomes even more convoluted as the deliverable on the contract may not be financially based, but output based (i.e. number of patients files completed). As soon as the government plays the role of funder, charity number issuer, regulator, judge and then jury we, as society, loose the voice that the social sector could be providing.

    This budget is a slippery slope, and one that needs to be put into check. The one organization whose mandate is to speak on behalf of the sector, Imagine Canada, receives a significant part of their budget from the Federal Government can put them at odds with effectively representing the charitable sector.

    All the more reason why your point about the charities’ supports being the voice is so important.

    Thank you for reinforcing this issue.

  2. Philanthropy Enthusiast April 4, 2012 at 2:53 pm - Reply


    Agreed, and agreed! The question of the role of government is vs. the role of charity is a very sticky and complicated one. Your examples are on the nose, but probably just the tip of the iceberg. They are intertwined in so many ways, and who can say which are healthy/productive and which are not? As long as we are neither an extreme right-wing (all charity, no government) nor extreme left-wing (all government, no charity) society, we are going to have to deal with the fact that we live in the messy middle.

    Which means, in my opinion, that we need to be constantly aware of this, and of our role in keeping both on track.


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