The Senate Report on the Charitable Sector: What You Need to Know, Reporting

We’re continuing our look at the Special Senate Committee on the Charitable Sector’s report, Catalyst for Change: A Roadmap to a Stronger Charitable Sector. In Part One, we looked at the context of uncertainty surrounding the report; there is no guarantee the recommendations will be pursued. In Part Two, we looked at recommendations about donations and legislation.

Today we’ll consider various reporting proposals.

If donations are the lifeblood of charities, as we noted in yesterday’s post, reporting could perhaps be described as the grunt work of charities – absolutely essential, often tedious, and frequently unrecognized. For the faithful staff and volunteers who may feel weighed down by these duties, Recommendation 20 may be of some encouragement. In its call for increased Canada Revenue Agency (“CRA”) transparency, it also encourages increased collaboration between CRA and provincial/territorial counterparts to “reduce the reporting burden” for charities.[1] Similarly, inter-governmental cooperation was recommended to “develop and implement an on-line tool … to submit financial reports” based on a standardized set of reporting categories.[2] This latter initiative relates to applications and related reporting for government funding.

Before there’s too much cheering from administrative staff and volunteers, there are also recommendations that would increase the amount and the nature of information charities would report. For example, the Advisory Committee on the Charitable Sector (“ACCS”) is asked to broadly consider “what additional information could be included” in the T3010 that would “support the work of the sector.”[3] That is as broad a scope as can be. And there are probably as many perspectives on what information would support the work of the sector as there are workers in the sector.

The Senate Committee, for one, recommends that the T3010 and the T1044 include questions on “diversity representation based on existing Employment Equity guidelines” as one component of information helpful to the sector.[4] This is an interesting proposal. Looking to the witness testimony cited in the Report, a Senator asked whether the federal government should insist that every charity and not-for-profit have “competent governance”. The exchange quickly moved from “competence” to diversity and inclusion. As part of competent governance, this witness’ organization offers training modules on governance fundamentals and sees diversity and inclusion as an integral component of governance and of strengthening board and organization capacity.

Let’s pause for a moment to clarify a few things. First, every charity should have competent governance, and Christian charities should be at the forefront on this, knowing that all work is for the Lord and should therefore be done to the best of our abilities. Second, we know that all people are created in God’s image and that God’s kingdom includes people from every corner of the earth – diversity defines God’s kingdom and should naturally be reflected in ministries seeking to accomplish His purposes. Third, ensuring that the second is in place (that is, diversity) will undoubtedly strengthen the first (that is, competency).

Let’s unpause now and return to the Recommendation and testimony. This witness referenced Canada Council for the Arts’ new funding model in April 2017 as exemplifying a new direction. The funding model directly tied diversity to funding for large arts organizations, and applied not only to artists but crews and boards of directors, among others.

Last year we saw the federal government develop its own funding model tied to particular policy aims in the Canada Summer Jobs (CSJ) program. That did not go well for Christian charities, which are likely to feel leery of similar overreach in other programs or requirements; the CSJ fiasco therefore raises potential concerns about the direction this Recommendation could take.

A whole host of other questions also arise: if the organization is meeting the needs of a very specific population, would it be problematic to have that population heavily represented on the board? Will exemptions in employment equity guidelines be accounted for? How? What if boards are unable to meet government expectations? How strictly will diversity be enforced? On what basis? With what consequences? Would a board of visible minorities but no women qualify as diverse? A board of economically advantaged women? What about privacy concerns? If board members choose not to self-identify on diversity markers, where does that leave the charity? What new administrative responsibilities will this impose? What information will need to be reported?

Many of these questions also relate to Recommendation 16, which calls for “collaboration between Statistics Canada and the charitable and non-profit sector to determine what additional data could be collected and disseminated in a timely and consistent manner” to support decision making within the sector.[5] Depending on the nature of the information and the degree of administrative effort necessary to maintain records for reporting purposes, this could have nary an impact upon, or it could overwhelm, a charity. For example, it could be extremely helpful if it allowed a charity to explain its allocation for management and administrative costs as a way to address the myth that administration costs are always problematic. Or, as in past years, it could be extremely unhelpful if it required a charity to report the minutia of volunteer hours.

From the minutia of this Report and its potential implications, it is important to return to the big picture. We know that the Committee praised Canada’s religious communities for their charitable work, that it affirmed “Advancing Religion” as a charitable purpose, and that, according to one of the Committee’s Senators, “religion is the base on which Canadians learn philanthropy.”[6] That big picture is important to keep in mind as the context for the potentially problematic issues we’ve touched on today. And still more to come!


[1] Recommendation 20, Report p. 60

[2] Recommendation 13, Report p. 49

[3] Recommendation 17, Report p. 56

[4] Recommendation 8, Report p. 38-39

[5] Recommendation 16, p. 55

[6] CCCC Blog Post, “Senate Affirms Advancing Religion in New Report” (June 21, 2019)

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Noteworthy is provided for general information purposes and does not constitute legal or professional advice. Every organization’s circumstances are unique. Before acting on the basis of information contained in this blog, readers should consult with a qualified lawyer for advice specific to their situation.