The Collectif des fondations québécoises contre les inégalités, a group of public and private foundations operating mostly in Quebec, has created a framework and series of commitments to combat inequality.
In late 2014, a group of Quebec-based foundations came together in response to a series of budget restrictions that had recently been announced by the Quebec government. They were concerned that these restrictions would have far-reaching implications for the community-sector organizations, collaboratives, and networks that these foundations were in relationship with, and most significantly for the hundreds of thousands of citizens who would lose access to pathways out of poverty and to locally created services and economic solutions for their families and communities.
In short, they worried that these measures could jeopardize some of the progress that Quebec as a society had made in curtailing the effects of the social and economic inequality that has been on the increase in recent decades in Canada and throughout the world.
These foundations were keenly aware that they had neither the means nor the power to right this wrong. Foundation resources, even combined, amount to only a tiny fraction of the money that governments can put into public programs. They felt compelled to push back against any emerging public narrative implying that they would be able to step in and fill the void left by these cuts. At the same time, they felt that they did have a voice to contribute to public debate about the kind of society that Quebecers wanted to be part of, the commitments that its citizens were willing to make collectively to curb inequality, and the role of government in enacting public policy that reflected this will. It was only with this strong policy foundation in place that Quebec’s vibrant community (non-profit) and philanthropic sectors would be in a position to make their own vital contributions in these areas.
Out of this context, the Collectif des fondations québécoises contre les inégalités (Collective of Quebec Foundations Standing against Inequality) was born. A loose network of 15 to 20 public and private foundations with assets ranging from $300,000 to $2 billion, the Collective’s members operate mostly in Quebec, although some work elsewhere in Canada as well.
Over the following years, the Collective wrote open letters and submitted joint policy briefs on behalf of members, reiterating hopes and expectations that the Quebec government would use all the tools at its disposal – including taxation and redistribution – to limit and combat the spread of inequality.
Foundations’ ambiguous relationship with inequality
Foundations in the Collective were aware that there was something slightly paradoxical in their taking a public stance in favour of stronger and more progressive taxation and distribution measures. How, as foundations, could they legitimately espouse this position, when they themselves could be seen to be both the products and beneficiaries of inequality?
This question was raised against a backdrop in which private foundations, as the product of accumulated wealth, had come under increased public scrutiny. In Quebec in particular, the increasing prominence of large, powerful private foundations in the last two decades had been viewed with some suspicion by non-profit sector advocates.
Critics such as Anand Giridharadas have argued that philanthropy enables, legitimizes, and magnifies inequality – making it appear more acceptable if the wealthy appear willing to voluntarily redistribute some of their wealth.
Internationally, a recent OECD report reviews the tax treatment of philanthropic entities and charitable donations in 40 countries worldwide, drawing attention to emerging concerns in some countries that current practices could give a small number of wealthy donors disproportionate influence over how public resources are allocated, and calling upon governments to strike the right balance between safeguarding tax systems and continuing to provide support for the sector.
These critiques and debates have gained new traction in Canada, where since 2020 the pandemic has deepened and exacerbated disparities in income and wealth, and calls have been made to institute a wealth tax in order to put the brakes on this trend and generate badly needed revenue for public investments.
In this context, advocates in Canada have pointed to the $80 billion of charitable assets sitting in foundation endowments, calling upon their holders to step up and increase their rate of granting and on the government to increase the disbursement quota set in regulation.
Questions and debates over the tax treatment of foundations were part of the public conversation even before the pandemic. Critical observers have pointed out that taxpayers subsidize up to 53% of charitable donations – a subsidy that can amount to hundreds of millions of dollars in the case of exceptionally large donations. (The tax credit rate applied to charitable donations varies according to province and according to the amount of the donation; the 53% rate represents the federal and provincial tax credit applied in Quebec to donations over $200,000.) Tax reform advocates such as Brigitte Alepin have repeatedly called for the assets of private foundations to be taxed.
A framework and pledge to combat and reduce inequality
In the face of these trends and the growing scrutiny of foundation philanthropy, Collective members wondered: How could they be confident that they were not in fact contributing to the inequality problem? What could they be doing as foundations to ensure that they (we) were making the most powerful contributions they could to combatting inequality?
The Collective decided to engage head-on with these questions and to seek a set of answers that would allow them to contribute a critically engaged foundation viewpoint to the broader conversation.
A starting point was the recognition that Canadian society values and seeks to encourage private giving – a reality reflected in Canada’s enabling regulatory framework for philanthropy and charitable giving. Collective members also acknowledged that foundations are taxpayer-subsidized and exist in the public trust; in connection with this they recognized that their legitimacy as institutions is not an intrinsic right but something that is earned.
They also recognized that the various concerns raised do have legitimacy – that philanthropic foundations do indeed have an ambiguous relationship with inequality. At the same time, advocates within the sector have argued that foundations can contribute meaningfully to efforts toward resolving the problems of inequality.
Collective members came up with a set of principles and ground rules to guide what they should be doing as foundations to … reduce inequality rather than uphold or grow it.
Through a process of expert review, engagement, and dialogue within each of our organizations, Collective members came up with a set of principles and ground rules to guide what they should be doing as foundations to recognize and “lean into” their legitimate areas of contribution, to maintain and grow public trust, and above all to actively work to reduce inequality rather than uphold or grow it.
The outcome of this process is a framework and a series of commitments (a pledge) that the majority of Collective member foundations have signed on to (a list of the foundations that have signed the pledge appears below). The first part of the pledge urges foundations to uphold a role for themselves that is both distinct and complementary to other actors, and especially to government. It then challenges foundations to demonstrate their tangible contribution to the common good and accountability to the public for their actions, and commit in an ongoing way to improving the impact and coherence of their action.
The second part lays out three basic principles to guide foundations that seek to align their action with combatting inequality:
- ensure that their foundation’s mission, values, and program and granting priorities are in keeping with redistributive goals;
- adopt policies and practices aimed at sharing the power they have as foundations by increasing the power and representation of the beneficiaries and communities they are striving to support – especially those of equity-seeking groups; and
- ensure that their investments support economic and social practices that mitigate or reduce inequalities, and disinvest from those that have the opposite effect.
Many of these commitments in the Collective’s pledge echo other frameworks and calls to action such as the Trust-Based Philanthropy Project, and this influence is something that they acknowledge. In the last five or so years a groundswell movement has led the philanthropic sector’s guiding ethos to shift toward trust-based philanthropy, social justice aims, and power-sharing practices. In this sense, the Collective’s work and the pledge that has come out of it are resolutely products of their time.
The Collective’s framework and pledge also have some unique features that set it apart in the eyes of its first signatory foundations:
- Its comprehensive focus spans multiple areas of foundation engagement – not just grantmaking and programs, but also governance, strategic positioning, and investment policy and practice.
- The framework and pledge introduce the notion of an “inequality footprint” that foundations can increase or decrease through their actions. Inspired by the carbon footprint concept (the amount of greenhouse gas emissions that can be attributed to specific human activities), a foundation’s inequality footprint can be understood to be the sum of the positive, negative, and neutral impacts of all its activity on social and economic inequalities. The framework applies the “inequality footprint” lens at different levels and to different targets of action. It looks at foundations’ responsibility from a broad societal perspective and invites intentional action to address social and economic drivers of inequality through both programs and investments. It also invites foundations to examine the practices that uphold or subvert unequal power relations between themselves, grantee organizations, and communities.
- The pledge is framed as an invitation to embark upon a journey. There are no minimum criteria to fulfill at the outset – rather an initial set of commitments to agree to work toward. The process is internal; there is no “report card” that foundations are expected to share publicly/beyond themselves. Rather, foundations are invited to assess their own activities and orientations in light of the pledge’s baseline commitments, to set progress goals and targets for themselves, and periodically review their own progress.
For Collective members, the process of inquiry and engagement within their organizations and within the network space was as significant as any outcome. Its flexibility has allowed different foundations to engage with it in different ways, depending on their starting point. Annie Gauvin, executive director of the Berthiaume-du-Tremblay Foundation, notes that the pledge fostered critical reflection among board members about the foundation’s ethical obligation to assess what impact its grants were having on issues of inequality, in particular as they affected seniors. It also led them to give fresh consideration to the right balance to be struck between fulfilling their mission-related responsibility and fulfilling their fiduciary responsibility of ensuring the financial health and performance of the foundation’s investments.
The pledge fostered critical reflection … about the Berthiaume-du-Tremblay Foundation’s ethical obligation to assess what impact its grants were having on issues of inequality, in particular as they affected seniors.
Annie Gauvin
For many, the process of signing on to the pledge has entailed a whole-organization engagement – bringing together board, management, program, and investment staff to look together at how governance, granting orientations, communications, partner relations, and investment practices, taken together, produce the foundation’s “inequality footprint” and making plans to shift those practices that stand in the way of reducing it.
Former program director Beth Hunter describes two of the steps that the McConnell Foundation undertook: “We organized a cross-departmental staff workshop, which we used to help flesh out an assessment of how we were doing on each of the baseline commitments in the pledge. Then this assessment was presented to the board to allow them to have a clear view of what the organization was already doing and what it could commit itself to work on.”
She adds that bringing staff from different departments together in this way provided an opportunity to shine a spotlight on particularly positive practices: “There was one program area that was setting an example for ways to engage with potential grant partners that the rest of the organization could gain from emulating.”
What’s next?
Foundations that have signed on to the pledge are clear that the process doesn’t end there. They have expressed a need for the Collective to support and encourage their follow-up action, by acting as a space to share notes, learn about how others have engaged with specific commitments, and possibly to test out collaborative vehicles for engaging with new investment practices reflected in the pledge’s commitments. Jacques Bordeleau, executive director of the Béati Foundation and the Collective’s spokesperson, reflects on this: “Knowing that we have this supportive peer space where we share these common aspirations, and where we will be offering the chance to check in periodically about the progress we are making with the pledge, helps to keep us engaged after signing on. It pushes us to set real goals and move forward on them.”
Knowing that we have this supportive peer space where we share these common aspirations … pushes us to set real goals and move forward on them.
Jacques Bordeleau, Béati Foundation
Through the process of member engagement around the framework and pledge, a few foundation boards and CEOs urged the Collective to share it with the broader foundation community in Canada and Quebec, and invite them to join in embracing these principles and commitments. The Béati Foundation was among these. “In expanding the circle, our board members see the potential to positively influence the practices of their peers and to give the pledge even more momentum by increasing the pool of knowledge about practices to consider,” says Bordeleau.
The Collective has taken the first steps to make this possible, making the framework and pledge available in both French and English and launching a website inviting other foundations to engage in this process for themselves. It also compiled examples of the commitments being put into practice by a diverse range of Canadian foundations (document in French only).
Conclusion
To individual foundations, the pledge exercise can be valuable as a tool to raise awareness and mobilize a diverse set of stakeholders within their organization to align practices around a common set of aims.
However, as is the case with the carbon footprint concept, there are limits to the notion of the “inequality footprint” if it is used only by individual foundations to examine their own practices. The pledge’s intention, with its reference to foundations’ inequality footprint, is not to shift responsibility for combatting inequality to individual foundations – or worse, to engage in “virtue-washing.” If this were to be the only outcome that the pledge and framework led to, it would amount to a failure, says Bordeleau.
Social and economic inequality is first and foremost a collective action problem, and policy solutions offer the most powerful way to meaningfully act on the drivers of inequality. While internal conversations about a foundation’s inequality footprint are undoubtedly valuable, it is hoped that the pledge invitation will also spark an awareness about the contribution that foundations should collectively aspire to make to combat inequality, and generate some will and momentum to align efforts to help drive change in public policy and private investment practices.
A list of foundations that have signed on to the pledge (at the date of publication):
- Centraide of Greater Montreal
- Centraide Québec Chaudière-Appalaches et Bas-St-Laurent
- Centraide Régions Centre-ouest du Québec
- Fondation Béati
- Fondation Berthiaume-du-Tremblay
- Fondation Dufresne et Gauthier
- Trottier Family Foundation
- Fondation François Bourgeois
- Foundation of Greater Montreal
- Fondation Lucie et André Chagnon
- McConnell Foundation
- Fondation Mirella et Lino Saputo
- Fondation Solstice
- Mission Inclusion
