Sept. 11 marks six months since the World Health Organization declared a global pandemic of COVID-19. We’re using this milestone to take stock of the policy response so far and consider next steps as Canada continues to move from reaction to rebuilding. As part of this, First Policy Response is speaking to several policy experts to gather their thoughts on the key policy developments of these past six months, and what they think our next priorities should be.
This interview with Bruce MacDonald, president and CEO of Imagine Canada, is part of a series of interview transcripts that will run this week and next. You can read the full series here. Transcripts have been edited for clarity.
First Policy Response: I was hoping you’d be able to speak a little bit about how the pandemic has affected the non-profit sector in Canada.
Bruce MacDonald: Essentially, charities or non-profits in Canada are getting walloped, for the most part. We’ve seen donations down, primarily through special events that have been cancelled or door-to-door canvassing, which volunteers don’t feel comfortable doing or organizations haven’t been able to do throughout the spring. We’ve looked at some data to show that compared to the 2008-2009 economic collapse, this is much more significant and much more widespread. What we heard from sector leaders back then was that if a stream of fundraising or if a particular type of industry was struggling, that they could sort of just switch tacks and go to a different one. But what they’re finding [now] is that it’s everybody that’s being affected. And when you compound that with rising demand for services, it’s a challenging equation for our sector right now.
FPR: Can you speak a little bit about that rising demand?
We’ve seen it in really two different ways. One would be just simple demand for services. So families that had two working parents, both have lost their jobs, all of a sudden find themselves in lines for food banks. Women who were told to stay home for months on end – and those weren’t very good places to be – seeing rising demand in domestic abuse cases. Or the ongoing stress of this situation creating mental health problems. There’s all kinds of organizations where demand has surged.
Now, in some cases, there has been a corresponding increase in supply. So if you’re deemed to be the most vulnerable, government, foundations, corporations and individuals have responded. There’s also a swath of the sector which has seen both demand and supply collapse. Places like ballets, orchestras, performing arts and theatres, recreation groups like YMCAs or Boys and Girls Clubs – the common denominator there being place-based gatherings for the delivery of service – just tanked, and at the same time, so did all the revenues.
And then there’s the group in the middle, where demand has increased and/or they have increased needs or costs to convert their services into a digital realm when they hadn’t been doing that before. But because they’re not deemed to be the most vulnerable, there hasn’t been a corresponding increase in supply. And those might be groups serving the blind or the visually impaired – already kind of a vulnerable population whose sole contact with society is through touch and they’re told you can’t touch anything. Or for the hard of hearing who may be using reading lips as a technique, all mouths are covered behind masks now. So there’s a lot of challenges.
FPR: Listening to you speak about that, it really underscores how many different services are considered as part of the non-profit sector.
You bet. If you look in this nation, there’s 86,000 registered charities, there’s 90,000 non-profits now. Not all of those are public benefits. Some of those are private-benefit non-profits. There’s about 7,000 social enterprises. So when you’ve got 2.4 million Canadians working in the sector and 8.5 per cent of GDP, it is a significant part of both our community life, but also our economy. And somewhere between 70 and 80 per cent of those employed in the sector are women. So we’re seeing that this is disproportionately affecting women, as well.
FPR: When you say that the most vulnerable people or groups have been getting more support, can you explain what is behind that?
I would say some of the investments made by governments. For example, the federal government early on in the pandemic announced targeted support for women’s shelters, mental health, food security. They then did a $350 million [Emergency Community Support] Fund for vulnerable populations that was delivered and administered through Community Foundations of Canada, Red Cross and United Way of Canada, where organizations in local communities could apply to their local Community Foundations or United Way and receive funds. They were defining “vulnerable” more broadly in that one.
But as well, if you look at corporate Canada, many have stepped up to say, “We’re going to support food banks,” or those kinds of services. And there was also a response from Canadians as individuals. So I think the ones that were very visible during the early stage of the pandemic – one of the great things about living in Canada is that we’re a generous nation and we respond to those appeals.
FPR: So I guess what you’re saying, then, is that it would end up being more of a piecemeal approach rather than a systemic approach that would hit everybody?
Yes. Now, that being said, there have been a couple of instruments that the federal government has employed that have supported causes in a more widespread way. So we were actually really pleased that charities and non-profits were eligible to participate in the Canada Emergency Wage Subsidy program and the rent subsidy program [Canada Emergency Commercial Rent Assistance]. So those were blunt instruments that were used widely across society, but maybe one of the first times that our sector has been included in those kinds of stimulus packages. In ’08-09, when the government did a big stimulus package, charities weren’t anywhere to be found in that. I’ve talked to many charitable leaders who have said the only reason that they still have staff working right now is because of the wage subsidy. And that could be an arts and cultural organization or amateur sport or an organization serving animal shelters or environment. That one was more widespread.
FPR: What about some of the other initiatives or policy developments that have come through from the federal government?
I would say, there were initiatives that were designed for other parts of society that we were added on to. Even the construction of the criteria of some of these instruments has been challenging for our sector, and we’ve been advocating strongly to have them customized. So I think it’s an important point, because I wouldn’t say that there’s been a lot of intentional policy targeted at the sector.
From a pure policy perspective . . . there’s been some of what I would call procedural things that have been done, where they’ve allowed organizations greater flexibility. There was interest-free loans – that would be a loan mechanism, which isn’t as appealing to charities. Rental assistance, Emergency Community Support Fund, deferral of GST and HST remittances, deferral of business income tax available to social enterprise, T3010 filings, which is a big one for our sector – those have been deferred. You can delay your annual meeting, those kinds of things. [Note: Imagine Canada is tracking federal government measures with implications for charities and non-profits here.]
FPR: When you say, though, that a lot of it has been things that you’ve been added on to rather than intentional policy, how does that affect you?
It’s both positive and negative. And I think the positive side was that it would have been more problematic for the sector had we not been included. So we actually really value the fact that the government has said that it is important that Canadians have access to these services, and if we don’t include charities and non-profits in these blunt instruments, those services might not be there. So two thumbs up, I’m not knocking that at all.
However, that being said, we think in addition to that, it would be helpful to look at either learnings from the pandemic or things that have arisen during the pandemic that could be of value to our mutual interest of having those services available, that would be unique to our sector. And those are things like what we call direction and control and non-qualified donees. So we see foundations in particular, either community foundations or private foundations, that want to give monies in their communities, but if you’re not a qualified donee as defined by CRA [Canada Revenue Agency], you’re not eligible to give to them. So we’ve been advocating to say, could we use this as kind of a policy sandbox and allow foundations to try it during this pandemic to then see what the outcomes are actually? To use it as a bit of a pilot, because this has been a long-standing question for the sector.
One of the other ones has been around home in government. I think we’ve seen that this pandemic has illuminated the fact that there is no home in the federal government [for the charitable sector], and not to get into politics, but one could argue that if there had been a department of the federal government that really, truly understood our sector, the WE Charity scandal would have never happened. Because there would have been civil servants there who would have known organizations that would have had the capacity to deliver that program and been taking into account problematic design elements. But again, that wasn’t a charitable program, that was a program aimed at supporting students that we were added on to. So having a home in government, which has been a long-standing policy request of the sector, would have been hugely beneficial during this pandemic. And we’re actually hoping that the problems that have been illuminated by not having one might propel that policy objective forward as a result of the pandemic.
FPR: You mentioned the WE controversy – how has that affected the sector since that’s come up?
We’re actually testing that right now. We have a poll in the field to understand whether trust and transparency levels changed as a result of both the pandemic and the WE Charity scandal. Intuitively, we think there had been an increasing understanding and awareness of the importance of the services that charities and non-profits provide during the pandemic – more Canadians needed them, media was far more attuned. We’ve had more media coverage since the start of the pandemic that involved Imagine Canada – just us, alone – than we’ve had in the six years that I’ve been in this role combined. Then WE Charity comes along and what we’re not certain about is, are Canadians viewing the challenges that were highlighted or spotlighted about the functioning of one charity as being part of the charity sector writ large? Or are they saying, no, this was really kind of a Liberal thing with that government, and it was just about one organization? So we’re going out and testing that right now, because trust is at the heart of our relationship with donors and volunteers and people who entrust their aging parents to programs as service recipients.
FPR: Are there other recommendations that either Imagine Canada or the sector more broadly is making for policy to address non-profits?
Probably two more that are of note. It’s interesting how some of these are actually long-standing policy requests, but they’ve been given a little bit of a nudge because of the pandemic.
So one is around data. It’s a real challenge in our sector because there’s no real mechanisms to collect sector-wide data except through CRA and the government. And from 2006 to 2019, they didn’t do it. We went 13 years with no new data. And it’s so frustrating – because we could probably tell how many heads of cabbage move around this country on any given week, but we can’t even tell you how many numbers of charities there are. So as it relates to what’s happening with our sector and the pandemic, we need ways to understand, so we need better data instruments in this country.
The second thing is what we call grants and contributions reform. Again, another long-standing policy file, but as we look at going forward through the pandemic and the government’s, I think, genuine desire to help the sector, is there a way to evolve red tape to actually look at full cost recovery, to look at appropriate reporting? Even looking a little bit more long-term, one of the challenges for our sector is the amount of work that goes into grant writing and proposal writing and you only get a one-year gift. It’s almost like the cost-benefit analysis is very challenging for the sector. So grants and contributions reform is another area I’ve also heard.
FPR: What about creating a stabilization fund for the sector?
It’s actually at the heart of our request [to government]. We’ve actually expanded our thinking around financial supports into three areas. One is, absolutely, we need a grant program. We’re starting to witness charity bankruptcies, but we’re predicting it’s going to get worse before it gets better. We’re going to lose more services. The second thing is, inviting the government to think about accelerating the previous commitment that it had made on the Social Finance Fund, which was a 10-year commitment. Maybe they can accelerate some of those dollars. Now that’s more loan-based access to capital, but still good – organizations do need that. And the third – and this one we’re hoping they would consider upon approval of the grant program – is a matching program. So an invitation to Canadians, if they wanted to support causes, the government would match to a certain limit. But also to say that ensuring the health and wellbeing of a strong charitable non-profit sector is not the exclusive domain or responsibility of the federal government, but Canadians. And there’s some research to show that people are highly motivated if others have skin in the game. And that might be a good way – especially coming up to the holiday season, where about 40 per cent of individual donations come in, in the last eight weeks of the year – if there is already a fatigue right now, or people are economically suffering, having a little boost to [match spending] might ensure that that’s still a strong donation period for the sector.
FPR: You had projections from earlier this year of the financial impact of the pandemic on charities and non-profits. Do you have any sense of what that’s looking like six months in?
Well, that goes back to our data. We’ve got surveying that’s happening. If you take a look at the recent Ontario Nonprofit Network survey, the numbers seem to be pretty consistent from the polling that we did in April. The ONN study, which was end-of-June polling, it’s showing that it’s pretty problematic – about 20 per cent of sector leaders still thinking they might not be around in six months. The one that really struck me, I have to say, 10 per cent of respondents in the ONN poll said they’re using personal dollars to keep their organization going – maxing out their credit card for their food bank and then saying, “What’s next?”
But we don’t have is real-time donation data. There’s nowhere in Canada to get that.
FPR: You mentioned that there has been a surge in need. Do you have any sense of where that’s been felt most?
Again, this is a hard one to figure out from a data perspective, because all of that information is really held by the local organizations. The Sector Monitor piece that we did found about 35 per cent of organizations had seen an increase in demand, but we didn’t have clarity as to whether that was restricted to particular sub-sectors. It felt like it was definitely [more demand from organizations serving] the most vulnerable, the food security ones, the ones that we talked about earlier. But it was also interesting how you define demand, because I talked to some places of worship who, you know, all of a sudden people couldn’t go to church or temple or synagogue or mosque. And yet they were feeling, alone, isolated, they needed their spiritual connection. So demand actually rose. I talked to some faith leaders who said they would get 50 people in the pews on a Sunday, and now that they’re doing all virtual services, they have close to 200. Like they’re actually connecting more – there’s been a surge in demand.
FPR: And what about Imagine Canada as an organization? How have you had to pivot in the last six months?
I’d say we’ve never been busier, in part because part of the work that we do is around federal public policy and research. And I would say that there’s been three major seismic factors here: the pandemic, WE Charity and Black Lives Matter. And I don’t think we can discount the pressure and the expectations that have changed as it relates to that.
For us, it’s also been challenging – we’re an organization that’s had to reduce staff in preparation for what we believe will be a hugely challenging 2021. So we’re being asked by the sector to do way more, and yet we have fewer resources with which to do it. So I would say in terms of how we’re doing, our staff’s pretty stressed because they’re going flat out. And it changes constantly. I mean, we thought after the Aug. 26 planned sitting of the virtual House of Commons, there would be a little break before it reconvened in late September. The change of finance minister, the proroguing of Parliament and the election of the new Conservative leader has meant that time to regroup a little bit, it’s gone. We weren’t expecting a speech from the throne. And the other part of it has been media. We’ve had close to a thousand media stories since the start of the pandemic where we were either participating or our data was cited, which is just extraordinary.
I’d say if there was an upside, though, we’ve had more direct contact with organizations with whom we’ve not spoken with in a long time, or perhaps ever, as a result of this. We’ve actually created a story bank of impact, and we’ve had over 300 organizations. It feels like in many ways, our connection to our sector leaders has deepened as a result of a pandemic. So there’s always these little silver linings in this sort of crisis. And I think that’s one that we’re hoping, and we talk about it as a staff and say, “How do we retain that when the crisis calms down a bit?”
FPR: Is there anything in particular you’re hoping to see in the throne speech?
Yes: one line that talks about charities and non-profits.
FPR: Just one line?
Yep. That’s all we realistically can expect. But what it would do is, it would send a signal that they’re considering it a priority, and then have these conversations around the policy ideas that have been collectively put forth by sector leadership. Being shut out of it could be problematic.
FPR: What would that mean?
Well, it just means that we have to claw our way in. So rather than the government saying we’re part of the next suite of priorities as they do this reset, we’re now having to punch our way in from the outside to say, “We need to be one of those priorities.” So we’re working hard now behind the scenes to try and get that one line in.
FPR: Is there anything else you’re going to be working on in the next few months, as we continue to evolve from response to recovery?
Absolutely. I think from a political perspective . . . being a minority government, it can come down at any time. So for us, what that means now is talking with all opposition parties to start thinking about, how do they have sections on social good in their platforms to the electorate?
We’ll be doing this simultaneously with restart, recovery and rebuild efforts. . . . We’ll be advocating these policy ideas. We are looking at doing another sectoral poll of leaders six months after the April (2020) one. . . . The other thing is that we’ll see what comes out of this poll that we’ve got in the field. That might actually also shape some of our messages, because if it appears that society and Canadians are demanding higher accountability for transparency from organizations, we will likely be going and pushing our standards program hard. Just this week I talked to two organizations, both of whom are saying they’re preparing to enter the application process for the standards as a direct result of their boards feeling that the WE Charity controversy is requiring that they demonstrate higher levels of good governance, transparency and accountability. So there could be a shift in some of our own work, but as well, expectations for the sector. And we’ll have to see what the polls tell us on that.
FPR: Can you just back up a little bit and explain what you mean when you say the standards programming?
So about 10 years ago, sector leaders got together and created an accreditation program for the sector. There’s 73 standards in five different areas, and Imagine Canada is now the steward or operating body of that program. It’s a fee for service, it’s rigorous and expensive, but organizations are able to go through a process where they’re peer-reviewed against those standards and then carry, in a sense, a seal of approval. And what we’re hoping to do is make that almost like the Good Housekeeping Seal of Approval or fair-trade coffee or an ISO 9001, that’s unique to our sector. It’s an expression of trust that we’re doing everything possible to be good stewards of your time and money.
