Charitable appraisals

On behalf of the more than 3,500 members of the Association of Fundraising Professionals, I am writing to express our concerns about this story that appeared in the Financial Post on Dec. 7.

While we are always appreciative of stories that highlight charities and the work they do, the constant need to rate charities in a simplistic manner, combined with the size and complexity of Canada’s charitable sector, makes for a very incomplete picture filled with unsophisticated rules that don’t adequately describe how charities operate.

For example, ignoring charities with revenue under $1 million disregards the work and impact of thousands of organizations doing great work across our country every day.

We are also struck by the article’s comments about the complexity of The Victorian Order of Nurses for Canada. Many charities are complex — they are not simple, neighbourhood soup kitchens. Canada’s charitable and nonprofit sector contributes 10.5 per cent of our labour force and 8.1 per cent of our Gross Domestic Product, rivalling many business sectors. Transparency is key — and we appreciate the article calling out those organizations that don’t post their financial numbers or report zero fundraising costs — but calling for transparency, then chiding charities for not always being simple and easy to understand seems a bit problematic.

Finally, we would note that the grading system relies on outdated notions about fundraising costs. Of course, fundraising costs should be kept to a minimum when possible. But there’s a reason other charity ratings groups, including Guidestar, Charity Navigator and the BBB Wise Giving Alliance have written an open letter denouncing the “overhead ratio” as a valid indicator of nonprofit performance. These three organizations decry the “Overhead Myth” as a self-defeating process which keeps nonprofits focused on keeping down costs instead of investing in infrastructure, processes, administration, fundraising and support that can help them be more effective and fulfil their missions. The grading system here also completely ignores the importance of strategic investments and innovations that improve effectiveness and the impact charitable programs have on our communities.

Philanthropy is at its most effective when it is supported by knowledgeable and educated donors. The more a donor understands about the operations and activities of a charity (and philanthropy in general), the more likely they are to be supportive and be better donors and volunteers. They’ll understand that sometimes general operating support is more valuable than a large gift directed toward one particular program, or how the economy will affect an organization’s fundraising totals.

Donors and the public should be our partners, and we should engage them in that manner — talking straightforwardly about challenges, including issues such as fundraising costs and administrative overhead. A simplistic grading system covering a few thousand of Canada’s more than 80,000 charities doesn’t move the needle on education and understanding. University controversy surrounding Lindsay Shepherd and the clip from the Agenda, which she showed her students. WLU seems to have a belief that firstyear students should not be exposed to controversial topics. The CBC apparently has the same belief except it encompasses a broader swath of the population — the entire Canadian public!

I hope that a more impartial and broad-minded network might pick up the documentary — TVOntario maybe? were saying that Canada had nothing to worry about in the forthcoming negotiations.

It was Mexico that should worry.

The Alabama election for anybody watching it from the start was a local issue. NAFTA was not even an afterthought.

And by the way, there is and has always been strong opposition to NAFTA in the U.S., led by none other than Bernie Sanders. Trump did not create it, he merely capitalized on it.