The COVID-19 pandemic has exposed the fragility of the charitable sector in Canada, which is struggling to meet the increasing demand for its services while facing a decline in donations. A recent opinion piece in The Globe and Mail argues that business leaders have a responsibility to ensure that charities have the capacity to help Canadians in need.
The challenges facing Canadian charities
According to Canada Helps, a platform that connects charities and donors, only 29.6 per cent of charities say they can meet the demand they are experiencing. The organization also reported that two in 10 Canadians planned to access charitable services to meet essential needs in the next six months – a 14-per-cent increase from January, 2022.
Meanwhile, giving participation is declining among Canadians, as economic indicators such as rising interest rates and inflation affect their disposable income. According to IPSOS, more than half (52 per cent) of Canadians report that they are $200 away or less from not being able to meet all of their financial obligations, including 35 per cent who say they already don’t make enough to cover their bills and debt payments, the highest recorded proportion to date.
These trends have put a strain on the sector, which provides vital support to vulnerable Canadians in areas such as food, clothing, shelter, health, education, and social justice. Many charities have had to reduce their staff, programs, or operations due to the lack of funding.
The role of businesses in supporting charities
The opinion piece, written by Juanita Lee-Garcia, executive director of The Upside Foundation of Canada and a previous Venture for Canada senior leadership member, calls on business leaders to take note of the situation and act accordingly. She argues that businesses have a moral obligation to help charities, as they benefit from the social and economic stability that charities contribute to.
She also points out that businesses can benefit from supporting charities in various ways, such as enhancing their reputation, attracting and retaining talent, engaging customers and stakeholders, and creating social impact. She cites examples of businesses that have stepped up their charitable giving during the pandemic, such as Shopify, which donated $1 million to various causes; Telus, which committed $150 million to support vulnerable populations; and RBC, which pledged $50 million to help small businesses.
Lee-Garcia urges business leaders to adopt a long-term and strategic approach to charitable giving, rather than a one-time or reactive one. She suggests that businesses should align their giving with their core values and goals, engage their employees and customers in the process, and measure and communicate their impact. She also encourages businesses to collaborate with other businesses and sectors to create collective solutions.
The need for a systemic change in charity funding
Lee-Garcia acknowledges that business support alone is not enough to solve the problems facing the charitable sector. She calls for a systemic change in how charity funding is structured and regulated in Canada. She criticizes the current system for being too restrictive, inefficient, and outdated. She cites the work of American activist Dan Pallotta, who advocates for a more innovative and entrepreneurial approach to charity funding.
She argues that charities should be allowed to invest more in their capacity building, such as hiring talent, developing technology, and scaling their impact. She also suggests that donors should be more flexible and trusting in how they allocate their funds, rather than imposing strict conditions or overhead ratios. She also calls for more transparency and accountability in the sector, as well as more recognition and appreciation for its work.
She concludes by saying that if Canada wants to improve its quality of life and address the challenges it faces, it needs to have a strong and resilient charitable sector. She says that business leaders have a key role to play in making this happen.
