Public Policy Sources #31:
Executive Summary

[Contents] [Next]

In February 1999, the Panel on Accountability and Governance in the Voluntary Sector, chaired by the Hon. Ed Broadbent, produced its final report, Building on Strength: Improving Governance and Accountability in Canada’s Voluntary Sector. This report was the result of a process of consultations with government and the voluntary sector, which included the publication of an interim report in May 1998, Helping Canadians Help Canadians: Improving Governance and Accountability in the Voluntary Sector.

There is much of value in these publications. However, the aim of this paper is to examine critically one of the central recommendations of the final report--that a new, permanent, voluntary sector commission be established on the model of the Charity Commission of England and Wales. This new commission would be charged with:

• evaluating and making recommendations on applications for charitable status
• providing support, information, and advice about best practices to voluntary organizations related to improving accountability and governance;
• collecting and providing information to the public; and assisting organizations to maintain compliance with Revenue Canada and other regulatory requirements, and investigate public complaints.

From the Panel’s publications, it appears that the idea of establishing a new commission attached to the federal government, with a wide array of responsibilities, was favoured from the start. However, this recommendation failed to garner significant demonstrable support from the voluntary sector, and the arguments provided in support of it are unconvincing. No notice appears to have been taken of the actual record of the Charity Commission, which has come under strong criticism in the United Kingdom over the past decade. Moreover, during the consultation period, two reports were published by the UK Committee of Public Accounts, both highly critical of the Commission’s performance. Neither report is referred to in the Panel’s work. At the same time, the example of the voluntary sector in the United States appears not to have been taken into consideration. In the United States, a multitude of flourishing voluntary intermediary organizations accomplish the great majority of the work envisaged for a new voluntary sector commission.

In fact, there is little evidence that a new commission as recommended by the Panel is either necessary, or likely to produce significant public benefit. Certainly there is no pressing need justifying the Panel’s recommendation that such a body be established within a year. Depending on the arrangements decided by Parliament for the future determination of charitable status in Canada, there might be a role for a small body of judges and legal scholars to make recommendations to Revenue Canada in this regard, or to hear appeals of Revenue Canada decisions. All of the other functions envisaged for the new commission could be accomplished better and more cost effectively through other means, either by requiring existing government agencies to perform them, or by allowing existing voluntary sector efforts to develop naturally.

The Panel also made a number of recommendations regarding relations between the voluntary sector and governments, which indicate that the Panel’s stated goal of bringing the voice of the sector to the cabinet table was more central to the exercise than might appear on first glance. Combined with the Panel’s stated desire for increased government funding for "capacity building" in the sector, this raises important questions about the future direction of the sector, which the Panel’s final report does not address adequately. The Panel stresses the important role the voluntary sector plays in democracy, but some of its recommendations seem likely to undermine the independence and diversity of the sector. In particular, entwining charities more closely into governmental policy formulation, increasing government funding for intermediary organizations, making charitable registration dependent upon accession to "ethical codes," and encouraging "corporate responsibility" to the voluntary sector all seem antipathetic to independence, diversity, and voluntarism.

This paper recommends, therefore, that:

• the Panel’s recommendation for a new voluntary sector commission not be adopted;
• if a new voluntary sector commission must be established, its commissioners should number no more than five, with at least two-thirds having extensive experience with the charitable sector, and (if the commission is to have a role in making recommendations on applications for charitable status) one-third having legal expertise;
• Revenue Canada should retain all regulatory, oversight, and investigative responsibilities for the voluntary sector;
• final determinations on charitable status should be left to Revenue Canada;
• if it is considered necessary to have another body to make recommendations to Revenue Canada on applications for charitable status, or to hear appeals of Revenue Canada decisions, this body should be independent from Revenue Canada and composed of people with legal expertise;
• the application procedure for charitable status should be made transparent, by authorizing and requiring the body charged with taking such decisions to make its decisions public;
• adherence to ethical codes for fundraising and financial accountability should not be made mandatory for charitable registration;
• the elaboration of voluntary ethical fundraising and financial accountability codes should be left to voluntary intermediary accrediting organizations;
• although Revenue Canada should continue to respond to enquiries, the development of additional information sources on particular charities should be left to voluntary intermediary organizations;
• Statistics Canada should be required to collect and make public additional data on the charitable sector as a whole;
• the provision of services to assist voluntary organizations improve accountability and governance should be left to voluntary intermediary organizations and the private sector;
• the Panel’s recommendation that a cabinet minister be charged with responsibility for the voluntary sector should not be adopted;
• the Panel’s recommendation of forming "horizontal policy units" to liaise with a new voluntary sector commission should not be adopted;
• in order to increase the capacity of the voluntary sector, government should increase the capability of individuals to donate, by increasing their disposable income; and
• any government support for a new voluntary sector commission, or for voluntary intermediary organizations, should be tied directly to their ability to achieve performance targets, including acquisition of funding from non-governmental sources.

[Contents] [Next]

info@fraserinstitute.ca You can contact us at the above email address for any comments or information requests. Please report any dead links or technical problems.

If you know someone who would be interested in this web page, please enter their email address below, and we will forward this URL to them: Email Address:

Last Modified: Thursday, August 5, 1999.