Chapter 15: Leadership in the Charitable Sector: A Canadian Approach?

By Paloma Raggo

Read the interview with Dr. Paloma Raggo about her Chapter 15 and issues in the nonprofit sector: www.carleton.ca/panl/2022/q-and-a-with-paloma-raggo

What is leadership? We often have an intuitive understanding of the concept, but in practice leadership can mean different things to different people. There is a powerful normative assumption that “leadership” in the charitable sector is related to notions of selflessness, inspiration, ethical behaviour, and benevolence. However, leadership is more complex than good intentions and ethics. While meaning well, leaders even in the charitable sector can engage in incredibly destructive behaviours. By reducing leadership merely to specific qualities, skills, or traits that should be emulated, we limit our understanding of what leadership is and where it can emerge. There is no consensus among scholars, practitioners, consultants, and volunteers in the sector on a universal definition. Diversity of experiences, people, best practices, challenges, and solutions make the charitable sector a fascinating incubator for the study of leadership.

While it is tempting, and would be conceptually easier, to develop a coherent and unified approach to describe the charitable sector’s leadership, the leadership literature and practices are diverse and, on occasion, even contradictory. No single leadership approach can be effective in all circumstances. Indeed, we should be wary of pre-made “leadership recipes” that create the illusion that it is possible to morph into a particular type of leader at any given time if someone simply follows carefully prescribed instructions. This chapter’s main lesson is a simple one: people, context, and organizations matter in shaping what leadership is and who leaders are. This lesson is particularly relevant for Canadian leaders who must navigate their organizations through crises and difficult times while continually adapting to a changing environment. Although there is no single approach to leadership, purposefully embracing a diversity of views and people makes organizations more effective in achieving a common goal with their followers, which ultimately is the fundamental goal of leaders. Canadian leaders seem particularly attuned to the ethics and values at the heart of many decisions that can push an organization’s mission forward.

This chapter discusses leadership using a theoretical and an applied approach. On the theoretical side, the chapter maps many of the relevant leadership theories applicable to the charitable sector…

Paloma Raggo is an assistant professor in ĐÓ°ÉÔ­´´ University’s MPNL program and an Editor with PANL Perspectives. She researches leadership and nonprofit governance, global philanthropy, and research methods. Raggo is on and . Banner Photo is courtesy of Dimitar Donovski.

Chapter 3: Four Keys to Make Sense of Traditions in the Nonprofit Sector in Canada: Historical Contexts

By Dominique Marshall

In a feudal order, based on hereditary land ownership, society was divided into stable ranks. One’s immutable place was either among the rich or among the poor and was associated with duties toward the welfare of all. Giving to the Church could ease one’s salvation, and receiving alms was an entitlement of the poor. The French feudal system of land allocation and occupation of central Canada, from 1624 to 1850, regulated the lives of tenants, who represented more than three-quarters of the population of what is now Quebec. There existed no public system of poor relief, but, in exchange for their censitaires’ work and money, the seigneurs owed them protection, the provision of sufficient land to sustain their family, mills, commons, courts of law, and hunting and fishing rights. In such a social order of uneven and reciprocal relations, giving to the poor was the justification of the upper-class privileges (Robinson, 2019; O’Leary McNeice, 2020). So, too, was maintaining churches and the array of social functions churches performed, including education, welfare, and the promotion of the arts. Having said this, the North American labour market presented more economic opportunities than in many parts of the Old World, and feudalism left a lesser mark on philanthropy than in closed societies (Dechêne, 1992).

Originating from late medieval times, Britain’s Poor Laws never made it to the statutes of its Canadian colonies. But many of the Poor Laws’ principles and institutions played a formative role in the history of the voluntary sector in the country, including means tests, categories of poverty (deserving, non-deserving, dependent, or abled-bodied), vagrancy laws, poor rates, workhouses, and poorhouses. Until 1349, a voluntary system of relief of the poor had prevailed, which was under the responsibility of the clergy and funded by charitable giving and other Church income. When plagues, famines, and primitive industrial transformation tested the limits of this nonprofit sector, English monarchs inaugurated a public system of poor relief: they instructed local governments within each Church district to take responsibility for the vagrants and beggars of their territory. Obligatory taxes, levied and spent by local governments, guaranteed a supply of money for the relief of the indigent, as well as the subsistence of the working poor. In this way, the feudal system of serfdom was adjusted to keep agricultural workers in their locality to toil the soil of the landowning nobility and prevent social unrest. The Poor Laws heavily restricted the right to assistance by tying relief to one’s proof of continuous residency in a district; limiting begging licences to people who local authorities determined to be too ill, old, or disabled to work; punishing or imprisoning poor people deemed able to work, or those who were found away from their parish; and contributing to the maintenance of wages under the levels of subsistence. The Poor Laws of the late Middle Ages survived two overhauls, in the 16th century and the early 19th century. Their implementation required the construction of a growing network of local and public institutions for the “deserving” poor, where conditions were most often wanting, and which would serve as models for European charities and governments of Canada…

Click here for access to a pdf of by Dominique Marshall, as well as access to other chapters.

Dominique Marshall is a Professor in the Department of History at ĐÓ°ÉÔ­´´ University. She teaches and researches the past of social policy, children’s rights, humanitarian aid, refugees, disability and technology. Join Marshall on .

Chapter 10: Giving and Fundraising Trends

By Sharilyn Hale

Traditionally, “giving” in Canada has been understood as making a tax-receiptable donation to a registered charity for an intended purpose. Increasingly, a wider view of what “giving” and being “philanthropic” are has been evident with the embrace of additional ways to make a difference and advance social development and impact. From crowdfunding (to which contributions are usually not tax-receiptable and which often go directly to individuals rather than charities), to market vehicles such as impact investing and social finance, entrepreneurial incubation, and even remittances by diaspora communities – all are often categorized together as “doing good.” Even cause-related marketing, corporate social responsibility (CSR), and environmental sustainability and governance (ESG) programs have grown as corporate charitable programs have diminished, broadening the understanding of corporate social commitments from simply making charitable donations. In all these cases, the focus is on a goal, and not the vehicle to achieve it.

On one hand, a diverse range of strategies and vehicles for people and companies to do good is important and heartening and recognizes that intractable issues need to be tackled from multiple directions. On the other hand, this shift raises a host of concerns about the future for charities, which rely on more traditional forms of giving. At a time when we have seen a decline in the overall number of philanthropic donors, we must ask whether these alternate ways of giving are supplanting traditional philanthropic giving.

For instance, there is a sizable body of research indicating that “giving” by purchasing a product (coined “consumptive philanthropy”), for example, negatively impacts the likelihood of future donations to a charity (Eikenberry, 2009). The backbone of social capacity, charities in Canada need strong infrastructure and community support to deliver on their social mandates. Bridging the divide between traditional philanthropy and new forms of doing good will be a key challenge for the charitable sector in the years ahead.

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Sharilyn Hale is a member of the Advisory Council for the and . Drawing on expertise in philanthropic strategy, family engagement, organizational development, and governance, Hale enables philanthropists and their families to unearth and achieve their philanthropic goals, and helps social-purpose organizations deepen their performance. Join Sharilyn Hale on or .

Chapter 8: Board Governance in Practice

By Owen Charters

“But, I thought you were the boss …”

My son, age six, discovered that I had a boss, even though we’d previously described – in simple terms – that as a charity CEO, I was the boss of the organization. This discovery came as we embarked on a family adventure to meet my board of directors at a social engagement, and after a caution to him from my wife and I that he had to be on his best behaviour for “daddy’s boss.”

There are probably few things more complicated to describe than the true role and function of a board of directors. If only things could all easily be explained in terms a six-year-old could understand. Alas, a board does sound simple in concept but is exceedingly complex in practice.
Unlike the private sector, the nonprofit sector is unique in that all formally incorporated organizations require a board: there are no sole proprietors in this sector. Thus, if you work for a charity or nonprofit, you ultimately report to a board in some manner – you cannot escape this fact. Yet board management is an often-overlooked facet of a nonprofit’s function. An executive director (ED) or chief executive officer (CEO) entering the role for the first time is probably steeped in some critical function of a nonprofit’s operations – fundraising, programs, finance, or marketing – but is likely a rookie when it comes to managing the affairs of the board.

Franca Gucciardi and Alan Broadbent (2017), in their book, You’re It! Shared Wisdom for Successfully Leading Organizations from Both a Seasoned and a First-Time CEO, write:

Being the key link between the board and the management of the organization is a very different thing. Learning to do this well is a priority. Successful CEOs manage their board to help it serve the organization effectively. Less successful CEOs manage their board to minimize its impact. Failing CEOs allow their board to manage them.

The rookie ED or CEO must learn quickly and navigate an expansive area of management: managing a board is not the usual case of “managing up” and dealing only with one supervisor. It requires managing the complexity of a group of supervisors that can only act collectively. Group dynamics complicate the relationship, as does the fact that first, boards are not usually involved in the day-to-day business of the organization, and second, board members often do not understand their role intricately.

Click here for access to a pdf of , by Owen Charters, as well as access to other chapters.

is CEO of Boys & Girls Clubs of Canada.

Chapter 4: It Should Have Been So Simple: The Regulation of Charities in Canada

By Bob Wyatt

…But if anything is clear about the federation that is Canada, it is this: nothing is simple.
How, then, did we get to the point where the federal government – through the Canada Revenue Agency (CRA) – has become the de facto regulator of charities, with provinces playing a perfunctory (if that) role?
Spoiler alert: it boils down to the almost-meaningless distinction between “charities” and “registered charities.”

The Complaints and the Alternatives

Like most government departments and agencies, the Charities Directorate has had complaints over the years about delays and inconsistent responses. While the publication of its “guidance products” online has been helpful, one still hears concerns about the length of time it takes to process an application for registration of a charity or difficulties in obtaining an interpretation of one or the other of the guidance products in a specific fact situation.

The more substantive complaints tend to fall in one of two categories. There are those who believe that it is inherently wrong for CRA to be the regulator of charities because of a conflict of interest. And there are those who have complaints about a particular action or series of actions that CRA has undertaken. The second type of complaint often morphs into the first, but both have the same goal: moving the regulation of charities to some body that is independent of government.

Drache and Hunter (2000) argue that there was no alternative but to establish an independent commission:

We also take the position that organizational changes are extremely difficult, if not impossible. We do not believe that it is prudent to try to counteract the problems inherent in having a department dedicated to maximizing tax revenues make social policy decisions, particularly where a decision to recognize an organization as charitable de facto implies a loss of tax revenue.

They considered three options that had been described by the initial regulatory table of the Voluntary Sector Initiative and found all of them lacking. Instead, they proposed a Charity Tribunal, which would, initially, serve as the body that decided on the registration of charities and the revocation of such registration. They looked to the Charity Commission for England and Wales for practices but suggested that simply replicating the model was not a viable option for a variety of reasons, including matters of constitutional law. Their fundamental premise, though, was that the conflict between the role of tax collector and decision-maker about charities could never be resolved.

Click here for access to a pdf of Chapter 4, , by Bob Wyatt, as well as access to other chapters.

is the Executive Director of the Muttart Foundation.

Chapter 11: New Technologies and Fundraising

By Marina Glogovac

Giving in Canada is on the decline. The reasons for this disturbing trend are complex, multi-factorial, and understudied. The potential long-term consequences on charities’ declining ability to meet demands for their services, which are actually increasing, cannot be underestimated.

In , analysis from CanadaHelps and Imagine Canada found a number of troubling patterns:

• The number of Canadians claiming a charitable donation on their tax filings, what we call the “participation rate,” fell from 24% of tax-filing individuals in 2007 to 19% in 2017.
• Even as Canada’s population has grown, total donations haven’t kept up at the same rate as the growth.
• CanadaHelps’ projections of total giving in 2020 show that the COVID-19 pandemic and economic recession have hurt the charitable sector in similar ways to the 2008 Great Recession, with an estimated drop in total giving of $1.2 billion in 2020.

In addition, research suggests that Millennials are giving less in monetary donations than previous generations, and this group is not expected to start donating more even as their age and incomes increase (Rovner, 2018). One exception is related to social justice causes. For example, after the start of protests in May 2020, young Canadians became more active regarding colonization, police brutality, and racism in Canada—and, increasingly, they are donating more to charities involved in social justice movements (CanadaHelps, The Giving Report 2021)

Still, Millennials (also called Generation Y) give the least amount in average donations, compared to other demographics, and they give to the fewest charities overall (Rovner, 2018). The Millennial generation considers influence among peers as currency and their time to be as useful as a cash gift. They want to see impact, are much more interested in causes, and have little regard as to who is actually doing the work (i.e., social enterprise vs. traditional charity). Just as fundraising is multi-channel, and donations are difficult to attribute to a particular campaign or program, Millennials are comfortable with multiple approaches to making a difference.

These demographic shifts and changes in attitudes have meant that philanthropy in Canada is increasingly falling on the shoulders of a shrinking pool of older donors. A 2018 research study, , published by the Rideau Hall Foundation and Imagine Canada, confirms some of these troubling metrics. “The overall trend is clear: the donor base is getting ever-smaller and changes in total donations are now primarily driven by variations in how much donors give. From the peak in 1990, the percentage of taxfilers claiming donations has dropped by roughly a third, while the average amount claimed has nearly doubled. This means that charities are relying on an ever-smaller number of people for donations.” (Lasby and Barr, 2018).

The decline in giving is occurring against a backdrop of a technology upheavals occurring with increasing intensity in the last couple of decades. Philanthropy, like the media, travel, retail, publishing, and music sectors, is being affected and transformed by the proliferation and widespread adoption of digital, mobile, and social technologies. In this age of technology and all things digital, many charities are failing to engage donors who have become digitally savvy. Charities are failing to move successfully to a place where consumers gather – online and via mobile devices – and failing to replace direct mail or shrinking corporate or government support. As CanadaHelps’ Digital Skills Survey 2021 makes clear, our sector as a whole, and smaller charities in particular, need to transform digitally, and at a much faster rate.

We live in a time of “disruptive innovations” and “creative destruction”. Entire industries have been wiped out, weakened, and in many cases replaced by new ones that did not exist a few years ago. This era of creative destruction has brought about a fundamental change in the way people engage with each other, with businesses, with government, and with charities.

Read the full chapter, including sources, at .

is president and CEO of CanadaHelps.org, a non-profit foundation that provides fundraising and donation technology to other charities and donors. Through CanadaHelps, 1.1 million Canadians donated more than $480 million to charities online in 2020. Glogovac has been a technology and media executive for more than 25 years, including roles at Kobo, Lavalife Corp. and St. Joseph’s Media.

Chapter 9: Financing Canadian Charities: The Conditional Benefits of Revenue Diversification

By Nathan J. Grasse and Marcus Lam

In general, Canadian charities are financed through a variety of revenue streams that include individual and corporate donations, government contracts, foundation grants, memberships, and a growing array of commercial activities. This funding is increasingly volatile, and many charities feel financially vulnerable in both the short- and long-term for good reason…

The advice that is overwhelmingly given to nonprofits on how to survive and thrive in such an unstable financing environment is to diversify their sources of revenue. This strategy of diversifying funding makes intuitive sense and has become accepted wisdom among the multitude of consultants and financial advisors to nonprofits. It seems logical that overreliance on any one revenue stream is to be avoided because it can potentially expose nonprofits to financial instability if the funding source is reduced or eliminated. The academic research, however, does not unequivocally support diversification as the best strategy. A number of studies have found positive relationships between funding diversity and financial stability. Yet recent studies point to evidence against revenue
diversification and in support of revenue concentration, demonstrating that organizations with concentrated revenue portfolios have increased capacity…

This chapter takes a closer look at the revenue streams of Canada’s charitable sector, with a view to better understanding the pros and cons of financial diversification. Do increasing degrees of diversification produce increasingly better financial health? For which kinds of charities does diversification seem to produce greater long-term viability? We first provide an overview of the mix of revenue sources for Canada’s charitable sector and review the theories that aim to explain the benefits of diversified revenue portfolios. These theories and the ways in which they have been applied have significant limitations, however. In general, existing research has been limited to linear associations between revenue diversity and organizations’ financial conditions; that is, they assume that as revenue diversity increases, there will be a proportionate effect on financial stability and health. In practice, however, this relationship may be nonlinear, and, in fact, diversity may exhibit diminishing returns on financial health at a certain point. In this chapter, we argue for a more sophisticated approach to understanding the effects of funding diversification and test the potential for Canadian charities of a nonlinear relationship of diversity and financial health.

The full chapter is available at .

Nathan J. Grasse is an editor of PANL Perspectives and an assistant professor in the MPNL program at ĐÓ°ÉÔ­´´ University. is an assistant professor in the Department of Leadership Studies at the University of San Diego.