On the occasion of The Philanthropist Journal’s 50th year of publishing, we look back at 50 notable moments, movements, and trends that have affected the non-profit and charitable sector in Canada. Part 2 focuses on the pivotal moments that have shaped philanthropy and funding.
The history of Canada’s charitable and non-profit sector over the past 50 years has been marked by pivotal moments that have changed the way society views the sector and the way it views itself. We are arguably living through such a moment right now. This period has also seen the sector drive important mindset change and policy action on issues that affect the lives of Canadians.
As we look back on 50 years of publishing, we’ve compiled 50 milestones that together create a snapshot of a fast-growing sector moving into maturity, developing a clearer idea of itself and its role in Canadian society, navigating turbulent and often adversarial relationships with government, fighting for the funds and licence to fully come into its own, and able to fuel progressive shifts in spite of significant obstacles.
This list was developed in consultation with our editorial advisory committee, board of directors, and sector colleagues, and we present it broken out into four broad categories: movements and shifts, advocacy and systems change, funding and giving trends, and government-sector relations.
Of course, these aren’t the only important moments of the past 50 years; lists must inevitably leave things out, and category boundaries are easily blurred. As we continue to publish the list, we invite you to share the milestones that come to mind when you think back over the past 50 years. You can chime in on social media or send us an email.
(Read part 1 and part 3 of this series.)
Funding & giving
17. The Carter Report
In 1973, the Canadian Council on Social Development publishes a report by Novia Carter titled Evaluating Social Development Programs. The report is lauded as the first comprehensive review of Canada’s tax system and for asking fundamental questions about a tax system that would support the non-profit sector.
The Carter report suggests raising the maximum donation eligible for tax credits to 15% of income and echoes concerns from within the sector that a lack of mandated financial transparency could lead to the erosion of trust and tax privileges. It suggests that increased public disclosure and accountability measures could prevent this from happening.
The report also questions whether an increase in government spending on health and well-being, in line with the social welfare reforms passed in the 1960s, could decrease the amount of private donations.
18. Changing tax incentives to encourage charitable giving
The 1970s, ’80s, and ’90s see changes to how the federal government encourages charitable giving through the tax system.
In 1972, the government begins to allow charitable deductions of up to 20% of income. In 1984, it cancels the optional standard $100 income tax deduction and gives Canadians the option to claim donations up to five years after the donation is given.
In 1988, the government changes how it calculates individual tax benefits on charitable donations, shifting from a deduction model where the value of the benefit is based on a donor’s income to a two-tier credit model where the calculation is based on the total charitable giving a person claims in a year.
In 1996, the government increases the maximum limit on donations that are eligible for tax credit from 20% to 50%. That number rises again the following year to 75%.
19. Changes in the disbursement quota
In 1976, the federal government introduces a disbursement quota that requires charities to spend a minimum of 80% of the amount for which they issued charitable donations in the previous year on the current year’s charitable programs. Private foundations, meanwhile, are required to disburse 5% of assets annually. In 1980, that quota drops to 4.5%, and in 2004, under the Harper government, it drops again to 3.5%, bringing it under quotas established in the United States (5%) and Australia (4%).
The 2010 federal budget removes the requirement that charities disburse 80% of tax-receipted donations on charitable activities. And capital accumulation rules are changed to apply only to assets over $100,000.
During the pandemic, calls mount for foundations and donor-advised funds, which hold billions of dollars in wealth, to increase disbursements to respond to Canadians and charities in crisis. A number of foundations respond, granting at levels significantly above the 3.5% quota.
In 2021, the feds announce their intention to examine the appropriateness of the current disbursement quota rate.
20. Laidlaw becomes first family foundation to accept non-family board members
In 1977, Laidlaw Foundation president Bruce Quarrington recommends that the board limit the number of family members and accept non-family members.
The Laidlaw Foundation, which was founded in 1949, accepts the recommendation, becoming the first family foundation to do so. In the 1980s, the board expands from four to seven people, with a stipulation that no more than three be family members. The move supports the public interest mandate of a private family foundation that continues to engage different communities to address issues in underserved communities.
21. White-only scholarships and the limits of private trusts in the matter of the public good
In 1986, the Leonard Foundation’s distribution of scholarships only to white, Protestant people of British heritage is questioned by the Ontario Human Rights Commission, which says the trust’s discriminatory practice runs “contrary to the public policy of the Province of Ontario.”
The foundation, established by the long-deceased Colonel Reuben Wells Leonard, responds that it is a private trust and not a public foundation. The trust is found valid by an Ontario court. Four years later, the Ontario Court of Appeal reverses that holding. The decision in Canada Trust Co. v. Ontario Human Rights Commission (known as the Leonard Foundation case) is the first time a court in the Commonwealth has ruled that a testamentary provision in a will that discriminates against potential beneficiaries on grounds related to race, religion, sex, et cetera, goes against public policy. The court holds that the trust’s policy is based on racism and religious supremacy.
22. The Supreme Court hears the case of Centenary Hospital Association
In 1989, the ongoing debate about how and if charities should engage in business is addressed by a ruling by the Supreme Court of Ontario.
Centenary Hospital Association plans to develop a medical arts centre on the grounds of Scarborough’s Centenary Hospital to generate revenue through retail and rentals. (This is partially in response to an Ontario incentive for hospitals to raise money by expanding patient-care-related services.) The minister of health requests that the Office of the Public Trustee of Ontario confirm it has no objection under provincial charities and trust legislation.
The trustee cannot confirm this. It’s a first that the trustee is called upon to exercise a supervisory power over a public hospital. Centenary Hospital’s legal counsel questions whether this decision falls within the trustee’s purview. The court rules that the case falls under the Public Hospitals Act and not the Charities Accounting Act and is therefore outside of the supervisory scope of the trustee. Furthermore, the centre is deemed to be an investment in the operation of the hospital and not a business, and thus in line with the Charitable Gifts Act.
23. Community foundations create a national network
On May 1, 1992, a national conference of community foundations representing 10 Canadian cities incorporates the Community Foundations of Canada. The 28 foundations have assets of $500 million.
Under this funding model, endowment funds are grouped into a single investment portfolio to support various non-profit organizations serving a local/located community while connecting community-level expertise and data with personalized donor services.
With a local approach to issues faced by the nation, the network also spearheads Vital Signs – an extensive community-driven data program. By compiling data, local community foundations can identify trends and issues, prioritize spending, and raise awareness.The network encourages the establishment and growth of community foundations across the country. The 191 foundations that now form the network have combined assets of more than $6.2 billion and, taken together, are one of Canada’s largest grantmakers.
24. Capital gains taxes halved, then eliminated
In February 1997, Finance Minister Paul Martin cuts the capital gains tax on listed securities by half, extending the donor-friendly tax incentive for private companies to public companies.
The removal of 50% of the tax increases the tax credit for people who donate their securities instead of selling them, and creates favourable donor conditions for charities that receive the shares at their full valuation. This increases donations during a period of government funding cutbacks. In 2006, after lobbying by philanthropist Donald K. Johnson and others, Canada eliminates the remaining 50% capital gains tax. Since then, Johnson says, charities have received more than $1 billion in donations of listed securities virtually every year, often benefiting large institutions such as hospitals and universities and paving the way for a new scale of philanthropic giving.
25. The rise of the family foundation in Quebec
In 2000, businessman and philanthropist André Chagnon incorporates the Fondation Lucie et André Chagnon with the goal of alleviating poverty by focusing on youth development. The family invests $1.4 billion in the foundation. An investment of this scale in a private family foundation is unprecedented, and the Chagnons’ engagement with the government attracts scrutiny from those who see their foundation as “entrepreneurial.”
When the Chagnon family requests an amendment to the Income Tax Act so that their donation to their private family foundation will be subject to less capital gains tax, their request is studied by the government and later becomes law.
Critics emphasize the tax gains for the donor class, while supporters emphasize that changes to the tax law will encourage a new scale of charitable giving from private foundations.
26. The Unclaimed Property Act and found assets as funding
In April 2003, British Columbia joins forces with the Vancouver Foundation to provide services outlined in the Unclaimed Property Act and create a non-profit society, the BC Unclaimed Property Society, that can tap into a new source of non-profit funding.
The organization has a mandate to return financial assets, such as estate gifts or unclaimed wages, to their owners and a philanthropic business model to reinvest a portion of unclaimed assets in charity. Since its inception, it has transferred $48.4 million to the Vancouver Foundation, which in turn distributes funds to community organizations.
Other provinces have since followed suit with unclaimed property acts, and Community Foundations of Canada is championing this alternative funding process.
27. Movement for Indigenous-informed funding practices
In 2008, as the Truth and Reconciliation Commission is being formed, members of the philanthropic community and Indigenous leaders come together in Winnipeg for the All My Relations gathering and a discussion of how the philanthropic community engages with and funds Indigenous issues and communities, and how to advance Indigenous philanthropy.
At the time, few foundations are funding Indigenous and organizations, and Indigenous communities are rarely at the funding table. One of the outcomes of the gathering is a commitment to found the Canadian Aboriginal Grantmakers Network, which evolves into The Circle on Philanthropy and Aboriginal Peoples in Canada.
The Circle partners with the United Way of Winnipeg to produce Aboriginal Philanthropy in Canada: A Foundation for Understanding, a research paper that proposes a pathway to Indigenous-led and -informed funding practices and further fuels the still-growing conversation about Indigenous philanthropy in Canada.
28. Imagine Canada launches national Standards Program
In 2012, Imagine Canada works with sector leaders to develop and launch the Standards Program to provide comprehensive guidance to charities and non-profits on governance, human resources, financial accountability, fundraising, and volunteer management. The program also provides the opportunity for organizations to become accredited through a third-party review system.
The Standards Program now counts more than 200 accredited charities and has become the primary sector-led evaluator of charitable effectiveness in the country.
29. Quebec Social Economy Act
In 2013, the Parliament of Quebec unanimously passes the Social Economy Act. Social economy organizations in the province are already well-organized and networked – most social economy enterprises are grouped within two large organizations, the Chantier de l’économie sociale and the Conseil québécois de la coopération et de la mutualité – but the act marks a milestone in government relations.
It acknowledges a long history, stretching back to the mid-19th century, of social economy organizations like associations, cooperatives, and mutual aid organizations and recognizes their specific contributions to the socio-economic development and vitality of Quebec society.
The act outlines the role of government in recognizing the social economy as an important part of Quebec’s socio-economic structure, promoting initiatives whenever relevant, and adopting action plans that include reporting mechanisms related to the government’s commitments to the sector.
30. International aid and DFATD
In 2013, after years of overhauls and cuts to the Canadian International Development Agency (CIDA) by the Conservative government, royal assent formalizes the merger of CIDA and Foreign Affairs and International Trade Canada into the new Department of Foreign Affairs, Trade and Development (DFATD). The new department is formed to leverage foreign policy, development, and trade objectives.
The elimination of CIDA as a distinct department raises questions about how official development assistance will be used. This aid is governed under a 2008 act that ensures that it is “focused on poverty reduction and is consistent with aid effectiveness principles and Canadian values.”
Before the merger, a pilot project partners NGOs with Canadian mining companies. Critics respond that development spending is being used to advance the private sector. After the merger, priority countries and projects shift to those of strategic economic importance to Canada. In 2015, DFATD is renamed Global Affairs Canada.
31. The government invests in social enterprise
On November 21, 2018, Finance Minister Bill Morneau announces the Social Finance Fund, a $755-million initiative to grow Canada’s social finance market. The fund supports charities, non-profits, social enterprises, cooperatives, and other social purpose organizations through access to flexible financing. Most funds are repayable and distributed to investment managers who will invest in social finance intermediaries alongside other investors. The government estimates the fund will attract up to $1.5 million in private sector capital investment.
Social enterprise, premised on the idea that non-profits can earn revenue and that business can do social good, isn’t new to Canada: the 2009 Satellite Account of Non-profit Institutions and Volunteering report noted that the core non-profit sector – excluding hospitals, universities, and colleges – already earns 45.6% of its income from the sale of goods and services. But the government endorsement of this market is a watershed moment for Canadian social enterprise and creates new links between private enterprise, civil society, and the government.
32. The Philanthropic Community’s Declaration of Action
In 2015, the Truth and Reconciliation Commission of Canada publishes its reports on the residential school system and issues 94 Calls to Action to advance reconciliation. The Calls to Action underline both the influence of traditional religious and charitable belief systems on the establishment of the schools and the role religious and charitable entities played in their operation, and in the resulting harm experienced by thousands of Indigenous children and youth.
In response to the Calls to Action and a direct challenge to the philanthropic community issued by Commissioner Murray Sinclair at Philanthropic Foundations Canada’s fall 2014 conference, the philanthropic community presents its Declaration of Action, signed by 35 funders, at the closing session of the TRC in Ottawa.
More organizations sign the declaration following the event, formalizing their commitment to learn and remember, understand and acknowledge, and participate and act. At the time of writing, 85 organizations have signed on in support.
33. Participatory grantmaking and the COVID-19 pandemic
In 2020, participatory grantmaking gains traction as a means of changing the power dynamic inherent in giving by shifting decision-making powers to equity-seeking communities.
While community foundations already support participatory grantmaking, a heightened awareness of structural racial and class inequity spurs public calls for more participatory grantmaking across the giving landscape. In 2020, the Indigenous Peoples Resilience Fund is established, to support Indigenous communities and Indigenous-led organizations (regardless of non-profit status) with grants to respond to urgent community needs. Non-Indigenous foundations support the fund, but the grantmaking decisions remain in Indigenous hands.
34. The WE controversy
In 2020, the House of Commons Ethics Committee announces investigations into Finance Minister Bill Morneau and Prime Minister Trudeau after a large federal contract is granted to WE Charity in a non-competitive process to administer the $912-million Canada Student Service Grant program.
Both had ties to WE, but Trudeau is cleared of having a conflict of interest, while Morneau is found guilty of ethics violations. Speaking fees given to Trudeau family members had come from the social enterprise entity affiliated with the charity ME to WE and not WE Charity. However, as the overlap of WE’s various philanthropic and for-profit entities is made public, some of the youth-oriented charity’s perceived shortcomings come into sharp relief against the social enterprise’s financial success.
The collapse of the buzzy, youth-oriented organization is associated with a negative perception of how charities function. In September 2020, WE’s founders, Marc and Craig Kielburger, announce that they are closing their Canadian operations, blaming the pandemic and the controversy around the contract.
35. Philanthropy fails Black communities
The 2020 Unfunded report, prepared by the Network for the Advancement of Black Communities and Carleton University’s Philanthropy and Nonprofit Leadership program, reveals how philanthropy has underserved Black people in Canada. The report, covering the 2017/18 fiscal years, reveals that among leading community foundations only 0.7% of grants went to Black-serving organizations, while grants to Black-led organizations represented only 0.07% of the total. Public and private foundations dispersed a scant 0.13% of grants to Black-serving organizations and 0.03% to Black-led organizations.
In response to the report, the Foundation for Black Communities is established to “ensure that Black-led and Black-serving organizations have the sustained resources they need to make a meaningful impact.” During an open call for pre-budget recommendations, they propose a $200-million endowment, and in April 2021, the Liberal government acknowledges that the pandemic has exacerbated systemic inequities, commits $200 million to a new Black-led Philanthropic Endowment Fund, and pledges an additional $100 million for the Supporting Black Canadian Communities Initiative.
36. Changing the rules around non-qualified donees
In February 2021, Senator Ratna Omidvar introduces Bill S-222, the Effective and Accountable Charities Act, in the Senate.
The bill proposes to move away from the traditional “direction and control” approach and amend the Income Tax Act to eliminate the “own activities” test and permit charities to fund non-qualified donees.
The bill passes third reading in the Senate and the National Finance Committee and moves to the House of Commons but dies on the order paper when the 2021 federal election is called. It comes back as Bill S-216 in late 2021 and is passed in the Senate. At the time of writing, it awaits first reading in the House of Commons.
Read more in The Philanthropist Journal.
37. A new scale of donation
In September 2021, the Temerty Foundation, established by James and Louise Temerty, donates $250 million to the University of Toronto’s Faculty of Medicine. This high-profile donation is the largest gift in Canadian history.
The Temertys aren’t U of T alumni, but David Palmer, the university’s vice-president of advancement, approached them with ideas that aligned with their philanthropic goals. According to the university, the gift will support Toronto’s health-science network, including equity and accessibility in medical education, and the creation of a new Faculty of Medicine building for research and education.
Observers note that massive donations to universities are increasing and that they have become increasingly important as provincial funding stagnates.
38. Canadian Philanthropy Commitment on Climate Change
Ahead of the COP26 climate change conference in November 2021, a number of large Canadian funders launch the Canadian Philanthropy Commitment on Climate Change to mobilize growth in funding and support for the fight against the climate crisis. The pledge, which had 42 signatories at the time of writing, builds on a global movement coordinated by the international philanthropic network WINGS.
While giving to environmental charities has grown in Canada, it still represents a small percentage of the total. A June 2013 Charity Intelligence report found that donations to environmental charities totalled around $286 million, or roughly 2% of total Canadian giving. The CanadaHelps 2022 Giving Report found that environmental donations through the platform represented only 5.1% of overall giving in the previous year.