Lifting the veil on Canadian charities

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Most people would agree that Canadian charities play a key role in helping the less fortunate in Canada and around the globe. But media coverage of governance issues at the WE charity, and reports of the fraudulent use of foreign aid by corrupt officials in certain countries, may have caused some Canadians to question the impact and effectiveness of our charitable sector. 

That’s understandable but, if left unchallenged, it’s a view that could cause irreparable harm to many well-run charities in our country. And by extension, limit their ability to provide development programs and emergency relief to millions of vulnerable people and communities. 

Let’s start with the importance of our charitable sector to Canada’s economy.  

According to Imagine Canada, there are more than 170,000 charitable and non-profit organizations in this country, of which almost 85,000 are registered charities. Each year, Canadians donate some $11 billion dollars to this sector, which employs two million people and contributes an average of 8.1% of total Canadian GDP.

For the last 36 years, the International Development and Relief Foundation (IDRF) has been one of these charities. The founding members of IDRF, all first-generation Canadians, were moved by news of the suffering caused by the African famine in the mid-eighties, and organized to help those in need. Since then, we have been able to carry out relief and development projects in 45 countries across the world in Africa, Asia, Eastern Europe, the Middle East, and the Americas, including Canada.

Over the past year, we have helped more than 652,000 people in need by providing emergency relief that included food, water, hygiene kits and fuel vouchers in  Somalia, Gaza, Palestine and India. We also gave emergency aid to Rohingyas in Bangladesh, and to displaced Syrians inside Syria, Turkey and Lebanon.  On the development front, we supported education, healthcare (including eye care and mental health), clean water and livelihood development in Gaza, Guyana, Pakistan, India, Yemen and Lebanon. 

 In Canada, we help youth and newcomers develop their potential through peer-to-peer tutoring, job readiness tutorial sessions and web coding seminars.  

Our flagship Canadian program, Licensed to Learn, provides over 3,500 children and youth each year with the means to excel in school and beyond. Through free academic support and leadership opportunities, students develop the critical skills that they need to succeed: self-confidence, independent problem-solving, mentorship, and more. Our program specifically targets communities of youth who are typically excluded from, or unable to afford, these essential programs. At the senior levels, our students often leverage their experience in the program for volunteer hours or school credit, and even to secure their first job.

Looking ahead, IDRF is expanding our work in youth leadership beyond the school environment, in order to provide vulnerable and underserved youth with the training, professional networks, and practical experience they need to be ready for the jobs of today and tomorrow.

Our emergency response programs assist communities affected by environmental or conflict-driven disasters without discrimination. IDRF helps communities recover from these disasters, rebuild their lives, and increase their resilience to future disasters through immediate response and long-term recovery projects. Our water, sanitation and hygiene programs enable men, women and children to have access to safe water, adequate sanitation facilities (such as washrooms and hand washing stations), and hygiene education. These resources will, in turn, keep families healthy and help break the cycle of poverty. 

Our health programs provide access to essential, high-quality health services and trained healthcare workers to families who would not have access otherwise. Our education programs ensure that boys and girls have equitable access to high-quality education that will improve their employability and quality of life. Our economic development programs help youth, women and men in need to become self-reliant by investing in the appropriate job skills training. Our food security and nutrition programs provide vital sustenance to mitigate the harmful effects of malnutrition.

In recognition of our record, IDRF has been selected as a Top 25 Canadian Charity by the Financial Post, as a Top 100 Charity by MacLean’s magazine, and as one of the leading charities in Canada by Charity Intelligence.

As for our collective mission – to improve the lives of vulnerable people – it is challenging at the best of times, and incredibly difficult in an era of globalization, climate change, civil war, lack of clean water and medicine, social injustice, and income inequality. 

For example, according to a report from the World Bank called “Piecing Together the Poverty Puzzle,”  almost half the world’s population — 3.4 billion people — still struggles to meet basic needs (including people in developed countries like Canada).  And of those people, more than 1.9 billion are living on less than $3.20 per day. 

As a result, demand for the essential services provided by charities is expected to rise significantly over the next 10 years, and revenues are unlikely to keep up. The economic impact of COVID-19 will only make things worse. In fact, estimates suggest that the pandemic and resulting recession will drive poverty rates higher worldwide for the first time since 1990.

With this kind of challenge, it’s easy to see why Canada’s charitable sector cannot afford to lose the trust and confidence of Canadians who to date have so generously supported our mission. So how can Canadians determine which charities are worthy of their support? 

At IDRF, we believe there are four simple criteria for assessing large charities that prospective donors should look at before making that decision:  transparency, efficiency, effectiveness and governance.

Transparency can be measured by how readily an organization shares key financial data, and particularly with respect to how it raises and spends money. At the very least, a well-run charity should provide its board of directors with quarterly financial statements, produce an annual report that is made public, and hold an annual meeting where donors can ask questions. If a charity’s executive team is not sharing vital financial information with its directors and supporters, it should raise a red flag.

A respectable charity should also operate as efficiently as possible so that most of the donation monies it receives can go to the programs that the organization was created to support. Donors want to see their money being used to help needy people; they do not want it being used to pay for plush offices, exorbitant salaries, or luxury travel. 

Sure, it costs money to raise money and to manage its effective use. As an example, according to the latest available public information, the United Way of Greater Toronto, which is a large charity, spends 5.1% of revenue on administration and 12.7% on fundraising. And IDRF, which is a medium-sized charity, spends 3.8% of revenue on administration, and 10% on fundraising.  But if a charity spends more than 20% on fundraising and administration, or won’t disclose how much it spends, it may be out of line with acceptable practice. 

Another important factor is whether a charity monitors, measures and reports on the effectiveness of its programming expenditures. It’s not enough for a charity to give money to good causes if there’s no way to tell if it’s producing the desired results.  To be truly effective, a charity must be able to report on the impact of its programming costs in terms of the specific projects funded, the regions where help was provided, and the number of people impacted. 

This issue is important enough that in 2016 we established a Chair of Global Monitoring on the IDRF board of directors, which I have occupied since its inception. My primary responsibility in this role is to ensure that the development and relief aid provided to vulnerable people and communities actually gets to them, is used for the stated purpose, and produces measureable results.  I also serve in a ‘challenger-champion’ role with a responsibility to scrutinize the way things are currently done, and to promote better and more effective ways of doing things in future.

My role is supported by IDRF’s policy of working with trusted local agencies that have a proven record of integrity and operational efficiency in the regions where we provide aid. Recently, after the devastating explosion in Beirut, this “local” policy helped us to effectively get essential supplies to vulnerable people in Lebanon through our existing regional partner in the Bekaa Valley.

Finally, good governance is essential to ensuring that a charity operates with integrity and in good faith. An effective board needs a diversity of perspectives, a broad range of skills, and people with a proven track record of achievement, community service and integrity. People who go on charitable boards merely to feather their resumes and build networks are not going to be effective at challenging management and holding them accountable. 

Transparency, efficiency, effectiveness and governance. If your charity of choice is not following these or similar best practices, maybe it’s time you asked why.

Winston Kassim is Chair of Global Monitoring for IDRF (www.idrf.com), a retired bank executive, and a member of the Order of Canada. 

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