Charities in peril after WE scandal
The collateral damage from the WE debacle has been wide and deep.
For many Canadians, the biggest impact is the diversion of focus from COVID, child care, systemic racism and climate change.
For some, it’s the loss of income and opportunities for students.
For partisans, it’s the self-inflicted damage to the prime minister and Liberal fortunes.
For others, it’s the damage to WE in its many incarnations, though here again, the harm is largely self-inflicted.
But, for the charitable sector, this sorry tale has potentially dire consequences, distorting public perceptions, feeding cynicism and undermining trust at a time when many organizations were already suffering from a dip in donations.
It has also exposed the systemic vulnerability of a sector that has not done enough to educate the public, donors or media about the principles and power dynamics that underpin good development practice, and equip them to recognize ethical fundraising and effective governance.
Many Canadians may now think it is accepted practice for charities to offer free junkets to donors, amass real estate, lobby governments without registering, commission opposition research on journalists or replace board chairs when they ask questions.
From its founding as Free the Children through its metamorphosis to a maze of foundations and shell corporations, WE has enjoyed an outsized reputation among Toronto-centred networks of media and magnates.
Building on its founding myth and youthful zeal, WE has aggressively monetized its brand, leveraging corporate and media sponsorship by offering privileged access to impressionable young audiences.
But, within the international development community, WE is a minor player known more for its chutzpah than its impact.
WE’s overseas programs are modest in scale and outdated in their approach. While transformative development is based in rights, builds on local assets, and reinforces local leadership, WE centres its brand, founders and donors, combining old-fashioned infrastructure projects with “voluntourism” to ground its fundraising efforts.
WE styles itself as an innovator and industry leader. But if it can’t explain its structure, development principles or business model to its board or the public then it puts its mission at risk.
When you need to ask a retired Supreme Court judge to attest that organizational arrangements are legal, perhaps they’re too clever by half.
When your in-Canada real estate holdings rival the entire Canadian international development sector combined, you’re investing in the wrong things.
When you seek corporate sponsors for curriculum development on issues where they have a financial interest, you’ve been compromised.
When you offer free travel to donors as a loss leader, you’ve taken entrepreneurial zeal too far and broken your trust with the people in whose name you raised those funds.
When you spend big bucks on highpriced consultants to advise on development practice and organizational culture, you’re doing your partners and staff a disservice.
When you’ve had the same auditor for 25 years, and it’s a much smaller operation than you are, you may not be assuring your board the independent advice it needs.
When you fail to respect the role of the board and the most basic rules of good governance, you put your charitable status in jeopardy.
When you are in regular contact with parliamentarians and policy- makers yet fail to register with the commissioner of lobbying, you skirt the law and undermine trust in other charities.
And when you retain highly partisan U.S. lobbying firms to discredit your critics, you’re crossing a line.
Every organization makes mistakes, but healthy ones have robust systems to assure integrity and accountability.
Those that prosper learn from their peers and their failures. Yet WE has never joined the Canadian Council for International Co-operation or subscribed to its Code of Ethics and Operational Standards. Nor is WE accredited by Imagine Canada, the gold standard for openness, transparency and accountability.
Charities shy away from criticizing their peers, particularly an organization as fabled and litigious as WE. But, for many, the sector’s silence comes across as complacency or, worse, complicity.
It’s not clear that WE will survive the scrutiny, but it’s important the charitable sector take action to ensure organizations that find themselves under the microscope reflect the ethics and standards to which we all subscribe.