I was recently asked what are some ideas about improving public trust in Canada. Isn’t public trust high in Canada for registered charities? Unfortunately, the answer is no, and the consequences are significant, but that is a blog for another day. If you are wondering about the problem (as opposed to solutions), here is an interesting article by Steven Ayer.
There are many different ideas as to how to improve public trust in registered charities:
First is to have more mandatory transparency. I have discussed this extensively. Canada is far behind the US, UK, Australia, etc. With 86,000 charities many will be transparent because it is the right thing to do but some will not and that is where minimum transparency requirements kick in. With some large charities with either revenue or assets over, say, $50 million per year, not even having a website or social media account, it certainly may result in some people wondering what they are up to.
The second is to have a more active charity regulator that audits more organizations and, most importantly, removes the most egregious actors relatively swiftly. Taking 10-20 years from when the CRA finds out that certain charities have been abusing the system is just too long. Auditing only 1/10 of one percent of charities is not at all adequate. If the public thinks that the charity sector is a space where regulations and requirements are not enforced and that there is no accountability, then that hurts public trust. Also, if a charity does not think it is likely they will ever be audited, then they are less likely to be concerned with compliance requirements.
Third is providing education to registered charities. Registered charities have special requirements, and they should be followed. We have tried to assist in this regard with numerous presentations, lots of online courses and over 3000 blog posts dealing with many different topics and making publicly available tens of thousands of pages of ‘public’ information that is certainly not publicly accessible. But for a $330 Billion sector, there needs to be significant investment by different levels of government in this area.
Fourth, some charities should improve their governance and transparency. Many charities have not changed their legal objects or purposes in decades, and their work is now very different. Many charities don’t even know who their members are. Many charities don’t put copies of their financial statements on their website, and stakeholders have to jump through hoops to get them. If you spend thousands or tens of thousands of dollars each year on financial statements, should you not spend 5 additional minutes and put them up on your website for the public to be able to access them? Also, is the description of your activities on your website accurate or perhaps deceptive? Are your filings with CRA accurate? You don’t have to wait for CRA to ask for certain information to be provided to the public; you can proactively look at it.
Fifth, we need more effective umbrella organizations that are focused on important issues such as this issue.
Sixth, charities need to be more cautious in how they deal with the wrongdoing of other people or organizations. If someone is convicted of fraud and you don’t mind them being on your board of directors, that sends the wrong message to the public. If you shuffle priests who have abused children from one parish to another, that sends the wrong message about how much your organization cares about children. If companies or people are involved with very bad behaviour and you don’t mind them being a major sponsor of an event because “a buck is a buck” then that says a lot about the values of your organization.
These are just a few of the many ideas for improving public trust in charities in Canada.