Uncharitable to charities
Re: Charities of the Year Report Card 2015, Dec 12
When we talk about charity effectiveness and impact we need to look at things in the context of the problem that the charity is mandated to address. The Financial Post just released its 2015 list of effective charities. Of the 86,000-plus organizations, it identified 25 large, national organizations that meet its grades.
After more than 15 years evaluating charities and matching donors to organizations I can state, unequivocally, when you start with the financials provided by the Canada Revenue Agency you are already starting with an incorrect premise. And here’s why.
The CRA T3010 form that charities file annually does not ask charities to state how they are positioned in their mandated market (i.e., homelessness, international development, etc.) so the reader doesn’t know if the cost on the programs offered is actually in balance with the complexity of the problem that is being solved. According to Statistics Canada, 80 per cent of charities are volunteer-run with fewer than three employees and operating budgets under $ 500,000. This means the need for audited financial statements is not only not necessary, but creates an undue burden on organ- izations, especially when donors are saying they want agencies to be costconscious and lean. Why would an agency spend a few thousand dollars on audited statements when a notice to reader would suffice?
Philanthropy is big business. The business of philanthropy is not as simple as just writing cheques to problems. But if we keep going to the CRA financials as our starting point then we won’t get the analysis that is needed. Gena Rotstein, adviser in philanthropy, Calgary We believe that “red flagging” the Hockey Hall of Fame and Museum based on “overhead and fundraising spending” is misleading the public.
First, it’s fair to say that most (if not all) large “bricks and mortar” museums/archives naturally run high overhead operations vis à vis management and administration.
Second, the direct cost of fundraising in the domain of sponsorships ( to fund capital improvements to the museum attraction), promotional/retail licensing (via intellectual property rights), special events (i.e., annual Induction Weekend/Celebration) and archival services (i.e. digital imaging and video archiving, etc.) is indeed significant but should be viewed in the context that all related “net income” is channelled through consolidated operations and reinvested in capital assets/projects in accordance with HHFM’s statement of purpose as set out in our articles of incorporation, such as to honour and memorialize individuals who have brought special distinction to the game of hockey and those who have made outstanding contributions to the development and advancement of hockey anywhere in the world.
All related “net income” is channelled through consolidated operations and reinvested in capital assets/projects in accordance with HHFM’s statement of purpose.
Finally, I agree with Bruce MacDonald’s comments that “it is difficult to find a ranking system that meaningfully compares and contrasts organizations.” Jeffery D. Denomme, president and chief executive officer, Hockey Hall of Fame and Museum, Toronto.