Juanita Lee-Garcia is executive director of The Upside Foundation of Canada and a previous Venture for Canada senior leadership member.
The U.S. News & World Report 2022 analysis of quality of life ranked Canada as the third-best country globally, slipping from the No. 1 spot in 2021. While many people are genuinely grateful to live in Canada, it’s not hard to feel that things aren’t as good as they used to be.
Affordable housing is out of reach, racial intolerance is on the rise, highly educated newcomers are unemployed and the climate crisis has caused whole communities to be abandoned.
In this context, more Canadians than ever are using services offered by charities to meet essential needs such as food, clothing and shelter.
In July, IPSOS said that “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.”
Canada Helps, which connects charities and donors, 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.
Addressing these problems is more challenging than ever because the organizations that exist to provide help to vulnerable Canadians are in jeopardy. According to Canada Helps, “giving participation” is declining among Canadians, and only 29.6 per cent of charities say they can meet the demand they are experiencing.
How do we expect a sector that is running on fumes to be able to address the crises we are facing? What is the responsibility of individuals, foundations and businesses to ensure charitable organizations have the capacity to help Canadians whose quality of life has fallen precipitously?
American activist, fundraiser and author Dan Pallotta believes that businesses can help many people succeed, but will always leave behind the 10 per cent or more who are most disadvantaged or unlucky. “So, if we really want a world that works for everyone with no one or nothing left out, then the non-profit sector has to be a serious part of the conversation,” Mr. Pallotta said in a 2013 TEDx talk.
Ten years later, more Canadians than ever require the support of charities. However, organizations in this sector are still not a serious part of the conversation about improving our quality of life. While economic indicators such as rising interest rates and inflation are factors in a decline in donations, there are cultural and philosophical shifts as well. Generational changes in investing allocation, lifestyle inflation and general mistrust in public institutions also contribute to this.
The 2023 Edelman Trust Barometer put a drop in economic optimism as the top two concerns for Canada, stating that only 28 per cent of Canadians say their family will be better off economically in the next five years, a decrease of six points since last year and an all-time low.
With 50-per-cent baseline trust in NGOs, government, media and business, Canadians seek more engagement from businesses and chief executives to solve our social woes.
In the business world, solving problems for consumers or other businesses requires investing in the best people, taking risks to spark innovation that sometimes results in failure, building for scale and making a profit. Solving complex social problems, such as what we’re seeing in Canada today, won’t happen unless we bring the same approach to funding charitable organizations.
Charities, like businesses, are people-powered organizations. When donors question the value of funding salaries or overhead in a charitable organization, they directly compromise the organization’s ability to solve social problems. They are also challenging job creation and decent working opportunities for women, including Black women, Indigenous women, women with disabilities, and women from the LGBTQ2SI community, who make up 80 per cent of the work force in this sector, according to the Ontario Nonprofit Network.
To improve the quality of life in Canada, funders need to fundamentally shift their approach to funding charities. Today, many of Canada’s most successful business leaders have a scarcity-based approach to supporting charities. This model prioritizes underpaid staff, in-kind services and the lowest possible overhead. Instead, people and businesses with the means to make a difference must adopt an abundance-based approach. One that is intended to solve social problems by investing in the people and systems that will make the biggest difference in the shortest time.
Importantly, this shift won’t require additional resources, and some progress has already been made. Earlier this year, the disbursement quota for public and private foundations was increased to 5 per cent from 3.5 per cent, meaning charitable organizations should have access to additional funding. However, approximately $8.1-billion are currently sitting in capital markets as donor-advised funds that could be redirected to direct investment in social change organizations.
Early investors in Shopify SHOP-T had life-changing returns and backed a company that has reinvented e-commerce and is now a driver of our economy. Today, we need people to be “uncharitable” and support charitable organizations with an aim to invest in whatever is needed to help them solve social problems and improve the quality of life for all Canadians.