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PFC - Philanthropic Foundations Canada

April 2011 E-newsletter

Letter from the President

During this election campaign month, it seems appropriate to reflect on the importance of public policy engagement by funders and the charitable organizations with which they work. While there are indeed some regulatory restrictions on public policy activities, in fact only the obviously partisan type of political activity is banned for charities by the Canada Revenue Agency. Charitable funders can engage in limited advocacy activities involving a call to action by public policy makers. But they are not restricted at all in activities that could be called public policy development: helping the public make informed decisions, communicating with elected representatives and public officials, or releasing documents addressed to elected or public officials (as long as there is no explicit call to political action).  

Why should foundations and charities engage in public policy development? This question will present itself to any organization interested in achieving a systemic change in the context that shapes a particular issue (whether this be food security, environmental protection, poverty reduction or health promotion, for example).  In the very timely current issue of The Philanthropist this question is discussed at length from various angles. A particularly helpful article by Elizabeth Mulholland in this issue suggests some very practical ways to avoid common pitfalls in policy work and to help produce “good policy that has a chance of being adopted by government and implemented.” As Mulholland points out, more and more, governments are confronting societal problems that they alone cannot solve. Funders can make a huge difference in supporting the mobilization of insights, expertise, resources and institutions to develop sustainable solutions to complex problems.  Many PFC members are doing this already. It seems to me that it would be enormously helpful to create a portfolio of case studies of their engagement, as a way to inspire others to do the same.

In this issue, we share the results of the annual member data-gathering that we do to help us paint a portrait for you of where philanthropic dollars are being invested across the country.  It’s a reminder of how diverse the interests of private funders are. But it doesn’t tell the full story of the impact of these investments. For stories on how funders make a difference that goes well beyond the grant, please see our section on Great Grant Stories on the PFC web site. And send us a story! We would be delighted to hear from any PFC member who wishes to share their story about the difference they are making in their chosen community of interest. If it’s a public policy change, that makes a great story too!

Hilary Pearson
hpearson@pfc.ca

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Grantmakers Roundup

On 2009 Foundation Giving in Canada: Emphasis on Social Services 

In 2009, PFC members collectively gave the largest portion of their approximately $192 million in annual grants to social services.  This data is consistent with the shift in emphasis reported by many funders as they allocated more resources to mitigate the impact of the recession. It is also a return to more typical patterns after a year (2008) in which members gave proportionately more to environmental projects and organizations.  Generally, PFC members consistently give the largest proportion of their grants to education and to social services. As in previous years, it should be noted that the data from year to year is somewhat difficult to compare, as it can be affected by a significant change in giving by one of our members to one sector, or by a change in our membership mix, as some foundations withdraw and others join. Year after year, however, social services, education and health remain the top three for foundation giving overall, drawing close to two-thirds (63 %) of all grants in 2009.

PFC members also disbursed over $117 million directly on foundation-managed charitable programs and activities in 2009.

26% of members focus their grants geographically and 34% focus their funding on a particular target population (mostly children and youth).

The distribution of grants by sector is shown in the chart below. Every year, PFC collects data from its members on the distribution of their grants in the previous full calendar year. This year’s report is based on 2009 grant data. 

 

On Giving by U.S. Foundations

U.S. grantmaking foundations gave an estimated $45.7 billion in 2010, virtually unchanged from 2009. According to Foundation Growth and Giving Estimates (2011 Edition), 2010 giving remained just 2.1 percent below the record high of $46.8 billion awarded by foundations in 2008, despite the fact that foundation assets were still close to 10 percent below their 2007 peak. 

Key estimates for 2010 giving: 

 

On Comparing Grantmaking Costs

Grants Managers Network and The Center for Effective Philanthropy recently launched Project Streamline’s Grantmaker Assessment Tool, a new online tool that enables funders to compare their grantmaking processes to those of other funders. The tool also helps grant managers determine the costs associated with grantmaking processes for both funders and grantees. 

The Grantmaker Assessment Tool is a free online survey that generates a comparative report that will enable you to: 

 

Canadian Foundations and Program-related Investments – The McConnell Experience

According to an interview in Axiom News of March 29, The J.W. McConnell Family Foundation has committed to acting as a mentor to other foundations on mission-related investment and in doing so help foster sector-wide efforts for Canada’s foundations to invest at least 10 per cent of their capital in mission-related investments by 2020. The foundation’s board has dedicated five per cent of its assets, approximately $25 million, to program and mission-related investments.

In an interview with Axiom, the President, Tim Brodhead, says the foundation has currently reached half of its target, investing approximately 2.5 per cent of its assets in initiatives seeking social and financial gains. The foundation has experienced the most success with program-related investments, which are loans to charities that support any of the Foundation’s program objectives. Other program related investments include providing loan guarantees and mortgage funding for capital projects.

 

On Capacity Building for Nonprofits

The PricewaterhouseCoopers Canada Foundation has released a discussion paper, Capacity Building: Investing in not-for-profit effectiveness. According to the paper, capacity building for funders means providing the right mix of resources to enable not-for-profits to operate at maximum capacity. For not-for-profits, it’s about educating everyone on the true costs of keeping their lights on and what they need to help them achieve their missions. 

The paper reveals a disconnect between how we describe capacity building and the actions that corporations could be taking to help address it. It challenges corporations and not-for-profits to put themselves in each others’ shoes and speak candidly about the ways they can work better together. 

 

On Government Relations with the Non-Profit Sector

An interesting perspective on the relationship between the public and nonprofit sectors in Canada is taken in a recent study by the University of Toronto’s Mowat Centre for Policy Innovation.  

The study Strengthening the Third Pillar of the Canadian Union: An Intergovernmental Agenda for Canada’s Charities and Non-Profits highlights the importance of the regulatory framework to the financial and overall health of the nonprofit sector. Competing jurisdictions (federal/provincial) and regulatory inflexibilities are both examined. The Mowat Centre makes three recommendations for addressing these issues, including a federal-provincial officials meeting and the establishment of a formal intergovernmental process to coordinate policies and approaches to the sector.

 

More on Government and the Non-Profit Sector 

A new book by Dr. Peter Elson of Mount Royal University High Ideals and Noble Intentions examines critical historical events in the relationship between the federal government and the voluntary sector. Beginning with an overview of developments in voluntary sector-government relations from 1600 to 1930, it goes on to explore more recent events and to bring present day policy and practice into focus. Elson explores the impact of the regulation of charities based on amendments to the 1930 Income War Tax Act; the shift from citizen-based program funding to service-based contract funding in the mid-1990s; and advocacy regulation changes in the 1980s. Elson also compares voluntary sector and central government relations in Canada and England. A thorough analysis for students of the evolving relationship! 

 

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Interesting Reading 

Two books released in March are worth noting:

Give Smart: Philanthropy that Gets Results  by Thomas J. Tierney and Joel L. Fleishman, 2011, a guide for donors and those they fund, drawn from the experience of two prominent philanthropy thinkers and extensive research by the nonprofit consulting group Bridgespan. For a balanced commentary on the book and the issues it raises (or does not address), see Lucy Bernholz’s blog.

Do More Than Give: The 6 Practices of Donors Who Change the World by Leslie Crutchfield, John Kania and Mark Kramer, a book about high impact donors that aims to show how a distinct type of donor helps solve pressing social and environmental problems by going beyond traditional philanthropy.

 

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PFC Family News and Events

Upcoming PFC Events

PFC Publications 

 

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Other News and Events

The following Grantcraft guides are now available in French, Dire Oui / Dire Non aux Demandeurs de Subvention [Saying Yes / Saying No to Applicants] and Travailler avec des Intermédiaires (Working with Intermediaries).

Book Launch: Walk Out Walk On by Meg Wheatley and Deborah Frieze written in partnership with the Laidlaw Foundation. The authors invite you to come learn about the people they met in seven communities around the world who have walked out of limiting beliefs and assumptions and walked on to create healthy and resilient communities.The book launch is on May 9th from 5:30 – 8:00 p.m. at City Hall in Toronto. 

Upcoming Conferences

 

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