The Charitable Dilemma – Part 1

[In this, the first of a series of commentaries, Brad Odsen, Executive Director of the John Howard Society of Alberta examines an issue impacting charitable organizations across Canada, with particular relevance to those in the human services business, including the John Howard Societies in Alberta.]

"Do more with less!" The mantra of business and all orders of government for a little better than the last decade. But those in the charitable sector have been doing more with less for at least the last 25 years. At times, it seems that every year there is a need to do more, and every year there is less available with which to do it.

"Accountability!" Something that has been, many would argue, paid lip service for some time now, in both business and government, but recent scandals, in business and government, in Canada and beyond, have meant that this is now starting to become a reality for business and government. But again, it's been a requirement for the charitable sector for at least the 25 years - and it is becoming ever more stringent. Whereas funders of charitable activities expected, in the past, at the very least an Annual Report on how charities were using the funding, it is now more and more common that semi-annual and even quarterly Reports are the norm, and more and more demands are being made for objective measures of the outcomes of the funded program(s).

Yet it is becoming increasingly difficult for charitable organizations to access on-going funding for general operational and administrative uses. Whether the funding source is an order of government, a Foundation, or a "government spin-off" (such as proceeds from gaming activities in Alberta), it is more and more the case that it is for a fixed term, for a very specific purpose, and that very tight constraints are placed on the uses to which funds can be put - and this typically includes the provision that funds cannot be used to contribute to administration of the organization (or only a small portion can be used for administration and even then, there are frequently severe limitations on which "administrative" costs are eligible).

For human service organizations like the John Howard Societies, the effective provision of services requires the use of professional staff; in many instances, the use of professionallyqualified staff is a legislative or contractual requirement. The administration/management of an organization employing professional and support staff must in turn, necessarily have a certain minimum level of professional qualification or experience in human resources management - and that "minimum level" continues to rise.. Similarly, the administration/management of the organization must have the skills to write project proposals, prepare budgets, manage the fiscal resources of the organization, prepare reports on funded activities, conduct evaluations of funded activities, deal with government officials and other funders, businesses, the media, and the public.

Oh, and they must also implement the Board policies and, in essence, manage the organization in a prudent, effective, and efficient manner. Few charitable organizations have the resources to employ individuals, let alone departments, for all of these administrative/managerial functions.

While the sources of funding become more and more "term specific" and "project specific", and as the evaluating, accounting, and reporting requirements of the funding sources continue to grow, the availability of the resources necessary to properly do this increased (administrative) work continues to decline.

"Do more with less indeed!"

And there is another aspect of the now predominant funding practices that is equally as dangerous for charitable organizations; as these organizations become more and more dependent on short term and project funds for their continued survival, they necessarily have to become more and more "creative" in matching possible funding to their core Mission and Values. A necessary consequence of this is that funding availability and policies can, and frequently do, affect the Missions of charitable organizations.

I do not believe the various funders intend this as a consequence of their funding policies; I do not believe that this is a "policy driver" for these funding organizations. Each funder sets policy guiding how funds will be made available, and for what purposes, that are important to it and within its mandate.

But I am convinced that a cumulative outcome of this is that many charitable organizations are put in the position of finding themselves straying further and further away from their primary raison d'etre out of the necessity of accessing funding to continue to survive.

It's past the time for those that support the concept of a healthy and vital charitable sector to re-visit their funding policies and carefully consider whether those policies currently in place are, in the long term, strengthening or weakening the sector.

Having said that however, it's important to acknowledge that the John Howard Society of Alberta has been extremely fortunate (in comparison with many other charitable organizations) in that it has received, and continues to receive, generous support from the Alberta Law Foundation, the Government of Alberta, and the Government of Canada that does recognize the importance of the Society's Mission and Ends, and the need for the administration required to fulfill the Mission and achieve the Ends.