Summer 1999 Newsletter

Table of Contents

1. Building on Strength: Improving Accountability in Canada's Voluntary Sector.  The Panel on Accountability and Governance in the Voluntary Sector.  Commentary by Janet Buckmaster

2. Book Review: "High Performance Non-Profit Organizations - Managing Upstream for Greater Impact," by Christine W. Lefts, William P. Ryan, and Allen Grossman, Review by Lana Sampson

3. Partnership - For Profits and Not for Profits Together by Martha Parker

1. Building on Strength: Improving Accountability in Canada's Voluntary Sector. The Panel on the Accountability and Governance in the Voluntary Sector. Commentary by Janet Buckmaster

The Final Report from the Panel on Accountability and Governance in the Voluntary Sector, "Building on Strength: Improving Accountability in Canada's Voluntary Sector" was released on February 8, 1999. This report was the culmination of fourteen months of research on the Canadian voluntary sector. If you work or volunteer in the fields of health, culture, arts, human services, recreation or for a charitable organization, it is time well spent reviewing the findings and recommendations of the Final Report. (to obtain a copy see information at the end of this article).

Back in May 1998, working at arms-length from the federal government and the voluntary sector, the Panel first issued its discussion paper. It followed up with cross-country consultations, providing the opportunity for organizations and individuals to respond directly or by electronic communication. Close to 100 briefs were submitted to the Panel examining the discussion paper's 40 draft recommendations and its implications for change on Canada's voluntary sector.

Many of us actively volunteering and working in the voluntary sector participated, either formally by responding directly to the Panel, or

informally, by reviewing the discussion paper and its implications with professional colleagues, board members, funders, and volunteers in the voluntary sector. After all, any recommendations for change to the voluntary sector in Canada were likely to directly affect us all, one way or another.

So, Who Led the Charge for Change?

A short lesson in history and social policy might be in order here to provide some background on why the need for such a research panel in the first place.

Governance and accountability are major issues in the eyes of a supportive public who volunteer their hours and give donations, and in the eyes of funders and those who participate in service delivery in the charitable sector. The Voluntary Sector Roundtable commissioned the Panel to develop some guiding principles that would improve the governance effectiveness of charitable and nonprofit organizations, and secure public trust.

The Panel was charged by the Voluntary Sector Roundtable to explore issues around the roles and responsibilities of the volunteer, fundraising practices and fiscal management within the sector, including accountability practices. The Panel would also look at the external regulation of the voluntary sector by governments.

What is this Voluntary Sector Roundtable?

The Voluntary Sector Roundtable (VSR) is an unincorporated group of national organizations and coalitions that came together in 1995 to strengthen the voice of Canada's charitable, voluntary sector.

Its primary goals are:

• to enhance the relationship between the charitable sector and the federal government

• to encourage a supportive legislative and regulatory framework for charitable organizations in the community.

Who are the players sitting at the Roundtable?

• The Canadian Centre for Philanthropy

• The Canadian Conference of the Arts

• Canadian Council for International Cooperation

• Canadian Council on Social Development

• Canadian Environmental Network

• Canadian Parks/Recreation Association

• Community Foundations of Canada

• Representatives for the Faith Communities

• National Voluntary Health Organizations

• United Way of Canada - Centraide Canada

• Volunteer Canada

If you are wondering why education seems under represented on the Roundtable, remember that it was only recently, in January of 1999, that the Supreme Court of Canada ruled more broadly on what has been in the past an extremely narrow interpretation of "education" in the charitable sector. It is hoped that players representing consumer/public education in the charitable sector will soon take their place at the table.

To date, the VSR has identified four areas of activity:

In its decision to address the above, the VSR's first formal initiative in 1997 was to establish the Panel on Accountability and Governance in the Voluntary Sector (PAGVS), and to appoint Ed Broadbent to head the national study panel that would review current accountability, develop guidelines and practices to promote accountability and to examine government regulation of the voluntary sector.

What is in the Final Report?

Many of the recommendations for strengthening the capacity of Canada's charitable sector are long-term. There are however, four top priorities whose implementation is immediately recommended.

The priorities are:

1. That a guide of good practices be disseminated to assist voluntary organizations report on their compliance with accepted principles of self-assessment to improve transparency and accountability.

2. That the federal government create a new Voluntary Sector Commission as an essential element to improving accountability and capacity building in the sector. (This would not be unlike the Charity Commission for England and Wales, which provides public access to data bases on various charities and is a national source for education, advice and resources to voluntary sector organizations.)

3. That the Canadian Parliament, not the judicial system, decide which organizations are "charitable," and that a task force be struck, in collaboration between the federal and provincial governments and the sector, to jointly establish how to determine which organizations should qualify for access to benefits of the federal tax system.

4. That both the federal and provincial governments renew their relationships with the voluntary sector (move over business sector!) to create common principles of good practice, and any other way of improving communication, understanding, partnership and recognition of the sector's vital part of the Canadian economy and social fabric.

The Introduction addresses the past challenges in the sector regarding accountability, the newer challenges, the difficulties inherent in the current definitions of "nonprofit," "charitable" and "voluntary," and defining accountability: To whom? For what? By what means?

The remainder of the Report is divided into two main sections, Looking to the Sector and Looking to Government.

Looking to the Sector

(which includes donors, foundations, corporate support and funders)

Dale Cuthbertson, executive director of Volunteer Vancouver has said, "the responsibility lies with each of us to respond and act as appropriate." In his view "the work of the Panel started as a pro-active initiative on the part of the sector itself and it would be a serious mistake for us not to carry through on the directions prescribed."

Some of the report recommendations are ones that voluntary organizations can take responsibility for.

Effective Board Governance and Stewardship

• Mission and Strategic Planning

• Transparency and Communication Structures

• The Board's Understanding of its Role

• Fiscal Responsibility

• Oversight of Human Resources

• Assessment and Control Systems

• Planning for Succession and Diversity

• Public Reporting on Good Governance

• Required Reporting: The Basics Requirements for Larger Organizations

• Accreditation

Program Outcomes

• What is Outcome-based Assessment?

• Identifying Outcome Goals

• Developing Measures and Data Collection

• Disseminating and Using Results

• Recommendations: to the Voluntary Sector, To Funders

• Collaboration within the Sector

• Conclusion

Fundraising

• Ensuring Ethical Fundraising: Government Regulation, Self-Regulation, An Ethical Code for Fundraising and Financial Accountability

• The Conduct of Commercial Fundraisers

• The Conduct of Professional Fundraisers

• Educating Donors

• Further Considerations

Cuthbertson also comments that "there is nothing surprising in the call for improved board governance practices and effective stewardship to improve accountability. However, the report takes a bold stand in favour of community organizations maintaining their own systems for self-accreditation, independent from government."

Looking to Governments:

(which includes federal and provincial governments)

Access to the Federal Tax System

• The Current Definition of Charity

• Modernizing Access to the Federal Tax System

• A Process

A New Voluntary Sector Commission

• The Need for Change Functions of a New Voluntary Sector Commission

• To Whom Would the Commission's Mandate Apply?

• A Preferred Model: Principles, Specific Features

• Conclusion

Regulation of Financial Management

• Current Regulation by Revenue Canada

• Current Problems

• Proposals for Better Regulation

The Legal Framework

• Organizational Law

• Reforming Legal Frameworks

• Directors' Liability

Conclusion: Building on Strength

• An Accountability Tool Box

• Priorities for Implementation

There follows a Summary of Notes and Appendix I-III, where you can locate the list of centres throughout Canada where the public consultations were held, the list of briefs submitted by individuals and organizations, tools (such as a sample Code of Ethical Behaviour and four approaches to outcome-based performance assessment), and the bios of the Panel Members.

The new millennium will bring us many changes in the voluntary sector. Get informed and get involved!

Janet Buckmaster’s 25+ years with the nonprofit sector is varied: as workshop leader, board member, manager, front line staff, and program volunteer. For nine years, Janet was with the Board Development Program (under Alberta Community Development), which is recognized nationally for advancing board leadership and as a model of volunteer management. Janet has served on the boards of values-driven organizations, whose beliefs and practices of governance and community development were compatible with her own.

Along with her knowledge of board leadership, Janet has an extensive social work background in human services, including her work with the YMCA in Montreal, Services to Persons with Disabilities (Alberta Family and Social Services), and the YWCA of Edmonton.

She is an alumnus of the Voluntary Sector Management Program at Grant MacEwan College, and earned the National Certificate in Voluntary & Non-Profit Sector Management from the Canadian Centre for Philanthropy.

Janet continues to work in a private capacity with nonprofit organizations in the voluntary sector, in the areas of governance and leadership development for boards. She is a part-time instructor at Grant MacEwan College, and has been on contract with the Resource Centre for Voluntary Organizations (RCVO).

This article may be reprinted with permission from the RCVO. Please credit the author and source. This article may be reprinted with permission from the RCVO. Please credit the author and source.

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2. Book Review "High Performance Non-Profit Organizations - Managing Upstream for Greater Impact," Christine W. Lefts, William P. Ryan, and Allen Grossman, Review by Lana Sampson

In the world of business, we refer to "economies of scale," and "new product development." These terms might also describe the concept of expanding and improving organizational performance addressed by the authors of "High Performance Non-Profit Organizations: Managing Upstream for Greater Impact."

Letts, Ryan and Grossman contend that the promise of the non-profit sector is to create large-scale social impact. This book is the culmination of inquiring into the prospects of expanding successful programs to achieve that end. The inquiry's conclusion is that there needs to be a fundamental redefinition of the challenge: from building effective programs to building effective organizations for long-term sustainability.

The new world order of non-profit and charitable delivery of services for people is a growth industry in a societal environment of shifting paradigms and shrinking resources. Unfortunately, non-profit corporate thinking has not undergone relevant accommodating changes. The authors have produced thoughtful, well-researched, and practical guidelines for the nonprofit/charitable sector to effect change and achieve that social impact. Their book is an overview of management processes that support organizational capacity.

The authors provide clear case studies and outline definite processes for expanding organizational knowledge, managing and motivating personnel, identifying best practices in meeting organizational needs, continuous review of quality of service, and maximizing intangible resources. By keeping quality and responsiveness to the needs of the clients uppermost, non-profits can ensure they remain community resources, not simply service providers consumed with their own growth or survival.

Letts, Ryan and Grossman take the position that, although non-profits are better-positioned than the private sector for excellence in program development, highly-developed processes are exceptional in the field, partly due to insufficient support. Non-profits seeking better program development processes must be trailblazers. In the current climate, there is often more support to create a new, innovative non-profit than for an existing non-profit to create innovative programs!

Lana Sampson is the Executive Director of Community Options for Children and Families. (Please note that Community Options has moved to 12345 - 121 Street, Edmonton AB T5L 4Y7, phone: 780-455-1818.

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3. Partnership - For Profits and Not for Profits Together by Martha Parker

(Please Note: this book is available for purchase from the RCVO.)

"As we approach the new millennium, Canada faces a series of profound challenges in the way we sustain healthy, vibrant communities. In the last decade Canada's economy and society have changed profoundly. The private sector has restructured. Governments have shrunk. Charities and other community service organizations are struggling to restructure in the face of increased demands for services, shrinking resources, and greater demands for accountability. Individuals and families face new pressures in their workplaces and in their homes. Globalization, technological change and recession have all had their impact.

As we move from a 'welfare' state to a 'civic' society, Canadians are being asked for more than simply a bigger donation to charity. They are being challenged and given the opportunity to take greater responsibility for their community, to become engaged once again as 'citizens,' as active participants in both supporting and deciding how community services will be delivered. Corporations in particular are being looked to for help in providing leadership and support in finding new solutions to meeting community needs, to become partners in a new social contract."

These are the words of Chris Pinney, the Director of Imagine and Vice President, Corporate Citizenship for the Canadian Centre for Philanthropy. They are extracted from a discussion document called Citizenship for a New Millennium, which outlines the agenda for Phase III of Imagine - a program of the Canadian Centre for Philanthropy that promotes corporate and individual philanthropy and citizenship.

They clearly reflect the changing landscape, in which we all live and work, and set the stage for me to share some of my learnings from the last year. Just over a year ago, I was privileged to receive a Muttart Foundation Fellowship. The focus of my research project, was to analyze current trends in corporate giving in Canada - particularly emerging partnerships between business and non-profit sector organizations. It was my belief at the time, and still is, that there is minimal understanding or readiness for the new shifts in corporate giving in the non-profit sector. I was surprised to find that business is also struggling to know how best to maximize resources and effectively interact with the community.

We rarely hear the word corporate philanthropy anymore. We do hear words like focused giving, strategic giving, passion branding, social marketing, partnership marketing, community investment, public purpose marketing, and cause marketing. Big business is definitely moving away from the charity model. For companies, like their counterparts in the non-profit sector, accountability has become the watchword, and there is an increased focus on ensuring that corporate contributions are treated like any other business function - not just a nice thing to do, but tied to business goals and interests.

Due to government downsizing, business is bombarded with requests for financial support from the community and is seeking new methodologies in how best to address an ever-increasing need for resources. Many companies are strategically expanding their resource base to include gift-in-kind, product, and expertise. Increasingly, employee volunteerism is being encouraged and supported. Partnerships and strategic alliances are more the order of the day than the exception.

Comparatively, non-profit organizations, because of government cuts and increased demand for services, have been pushed to look for new sources of revenue. We can no longer expect that just because we do good work we are entitled to funding. In response to the need to diversify our funding base - to be less dependent on traditional funders - we are moving toward strategic alliances that require new expertise - cause marketing, development of products that can provide earned revenue, contracted services in areas where we have expertise, and new relationships with business. Whatever our options, a good many of us are finding that we are needing to be more business like in our operations and more entrepreneurial in our approach.

To better understand the emerging partnership models; I have read about, talked to, met with, and debated these new trends with many corporations and their non-profit partners. My research is focused on eleven corporate case studies and their partners. The companies I chose to write about are all different, yet all are similar. A number of them have extensive community investment policies and procedures - others do not. All of them have been proactive in focusing their resources around innovative partnerships. The companies I wrote about are:

• Chevron Canada Resources - public company - head office - Calgary, Alberta

• Glaxo Welcome - public company - head office - Mississauga, Ontario

• Insurance Corporation of British Columbia – crown corporation - head office Vancouver

• Avon Canada - public company - head office - Montreal

• Canadian Airlines - public company

• TELUS - public company (recently merged with BC Telephone) - head office Edmonton

• Canadian Pacific Hotels - a public company - head office - Toronto

• Husky Injection Molding Systems Ltd. - a private company - recently gone public – head office - Bolton, Ontario

• Telemedia - privately owned company - head office - Montreal

• Flint Canada - privately owned company - head office - Calgary

• Woody's on Church, a privately owned neighbourhood bar - Toronto

From the case studies, I learned that companies are focusing their resources, more frequently looking at social marketing, cause marketing and economic development strategies to differentiate their products and build stakeholder trust. They want to be good neighbours and to have impact on the issues their employees, customers, and shareholders care about. They are looking for signature projects and many are prepared to make long term commitments that will both impact change and serve their business interests. While I believe their intentions to be sincere; and their nonprofits partners told me repeatedly that their partnerships were of tremendous value, my research left me with dozens of questions that need serious debate at the corporate level and in the board rooms of every non-profit.

Of the eleven case studies, very few of them were initiated by the non-profit partner(s). Most are cause or issue focused rather than organizationally focused. The non-profit sector is extremely diverse with more than 50 percent of all registered charities having budgets under $50,000. This raises the question of which non-profits corporations will partner with. Are we moving to elite organizations and elite causes -those that are well known and well respected in the community at the expense of the smaller grass roots organizations? Are we organized and committed enough to the causes we work for to proactively collaborate with other organizations in the community to put a joint funding approach together? Are we focusing most of our attention on the majors - large local, national, and multinational companies - and not proactively approaching middle and small firms to support partnership opportunities?

Organizational commitment is a key issue for fund development staff and their corporate partners. Finding the dollars is one thing - delivering on promises made is another. Many of the fund development professionals that I spoke to all across the country expressed frustration with their organizations. Once the dollars are in the bank whose responsibility is it to further develop the partnership, deliver on the sponsorship or partnership promises, write the report, nurture the donor? Two major corporations told me that they are considering inserting "not withstanding" clauses in their funding agreements based on the fact that their multi-year commitments require reports within well documented time lines and a full fifty percent of non-profit organizations do not follow through. Another company told me that out of over 300 donations of product, they received only 13 thank you letters. How do we deal with these issues?

The first rule of any partnership is "Find the Right Partner." Do we choose our partners well? I read and heard story after story this past year about non-profits that had entered into partnerships that ended badly. The woman's shelter that discovered that their corporate partner manufactured clothing at the expense of women and children in a third world country. The environmental group that found the company they were partnering with was dumping waste into the local river. We've all read the stories; but, and it's a big but, do any of us check out our partners before we approach them. Ethic Scan Canada - authors of "Shopping with a Conscience" - is Canada's oldest and largest corporate social responsibility research firm. For a small fee, Ethic Scan can provide anyone who's prepared to ask with a snapshot of a company and their business practices. Do we ask? Some of us do, but in fact I was told by Ethic Scan staff that corporations are more likely to phone about us than us phone about them.

How do we handle exclusivity? If our potential partner wants to brand the program we're trying to sell, what are the pros and cons? Are we prepared to negotiate? Have we determined how we might handle such a situation if it were to arise?

What if a product is involved? What are our Board policies on endorsements whether real or perceived? Do we have any? Should we?

When does a corporation ask too much and when do we say no? Are we prepared to share our membership/donor/employee/volunteer lists in return for a cause marketing campaign? If heavy-duty outcome measures or communication materials are expected, are we prepared to ask for additional support or, if need be, walk away from the proposed partnership?

One of the key complaints I heard this year from both business and their non-profit partners was that we don't speak the same language. Do we have to? Can't we both learn the other's language without compromising either partner's values? So you say "profit" and I say "surplus;" you say "customer" and I say "client," you say "products" and I say "programs" - let's figure out together what each is saying. Isn't that what true partnerships are about?

For every little bit of learning there are a dozen new questions. My key learning was and is that there are many, many corporations – big and small - who are willing and eager to take a few risks, to try something new, to build a different kind of relationship with their non-profit partners. There are just as many non-profits - big and small – who are willing to take a few risks, to try something new, to build a new kind of relationship with their for-profit partners. Where our interests, the things we care about, intersect and align - those are the new points for learning and "real" partnerships offer opportunities for both partners to learn together.

Martha Parker is the Executive Director of Volunteer Calgary and can be contacted at 403-231-1444. This paper was excerpted from her year's research as a Muttart Fellow. The Muttart Foundation offers up to five fellowships yearly. It provides a sabbatical year for senior people in the charitable sector to undertake a special project. The project must be something that will inform and assist the charitable sector—something with relevance beyond the Fellow's own organization. For information on the fellowships, contact the Muttart Foundation at 780-425-9616, or fax to 780-425-0282, or e-mail to cpoulsen@muttart.org 780-425-0282, or e-mail to cpoulsen@muttart.org 780-425-0282, or e-mail to cpoulsen@muttart.org 780-425-0282, or e-mail to cpoulsen@muttart.org.

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