Rather than seeking incremental changes, the social sector is being called upon to reclaim a larger role in Canadian society, Abdul Nakua suggests. He offers three areas of development and three key investments for consideration.
In a widely quoted and generally praised speech at the World Economic Forum’s annual meeting in Davos, Switzerland, in January, Prime Minister Mark Carney asserted that the world is “in the midst of a rupture,” not just “a transition,” from the post–Second World War order. Carney urged the leaders of “middle powers” to adapt to this new reality of an old world that no longer works and a future that has yet to be built.
Ruptures are generally conceived as radical and often forceful forms of discontinuity. They are switch points that instigate a significant break with existing conditions. Although often perceived as a negative outcome, rupture can also offer an opportunity for renewal and reconstruction, as it can lead to the emergence of a new order with alternative structures and operational modalities that redefine value and redistribute power.
Long before this talk of an imminent rupture point in the world order, the charitable and non-profit sector had been undergoing a unique rupture, one without an epiphany moment. It is a quiet and profound transformation that is driven by multiple stressors, ranging from declining and unsustainable financial resources (while costs and demand rise) to persistent economic inequality, from the rise of wealth gaps and drastic demographic transformations to the lack of a modernized regulatory regime.
The impact of these stressors has been amplified by a number of structural changes. For example, the traditional sector boundaries are increasingly blurred as philanthropy adopts more of the business culture and business increasingly pursues philanthropic ends, and the distinction between charity and investment is no longer as clear as it once was. This is exemplified on one hand by the increasing number of media and news outlets that are adopting a non-profit model and looking to philanthropy to survive; on the other, giving patterns are changing dramatically, where donor-advised funds (DAFs), for instance, are now among the most important giving vehicles in the Canadian philanthropic landscape. Indeed, more donors are talking about their giving in terms of “social investing” and are conducting “due diligence” on these investments. Another example of the blurring lines between sectors is the rise of social entrepreneurship and its many variants. Social innovation and social finance are advertised as part of a new economy where multi-sectorial solution-focused ecosystems could be developed.
The rise of digital platforms has transformed how the sector relates to its key constituencies, from engaging donors to recruiting volunteers and delivering key services. Donation and crowdfunding platforms, for example, have changed many aspects of fundraising (e.g., streamlining complex giving, offering immediate tax benefits, facilitating the donation of non-cash assets). Dedicated platforms such as Charitable Impact and Fidelity Charitable have transformed giving. Digital capacity has become essential for impact and key to success. As a result, a digital divide is growing due to disparities in this capacity across the sector, where organizations with greater technological capacity are able to gain a wider share of resources, while new and smaller organizations face significant barriers to bridge this divide.
Demographically, Canadian society has undergone major transformation over the past 50 years. Canada is becoming more racialized, with persistent racial wealth and income gaps. Its aging population is increasing steadily. Estimates suggest that by 2037, Canada will be home to more than 10 million seniors (65 and older).
Over the same 50-year period, neoliberal economic policies and market changes have created a persistent and growing divide between Canada’s wealthiest and poorest households. According to a 2025 report from the Office of the Parliamentary Budget Officer, the top 1% of wealthy families in Canada hold 24% of the country’s total net wealth. In contrast, the bottom 40% of wealth holders collectively hold 3.3% of total wealth in Canada. The resulting decline in the earnings of middle-class workers and the steep rise in high earners’ incomes risk driving the creation of a more polarized workforce, economy, and society. Add to this rising living costs, where 17% of lower-income households are food insecure and 45% are concerned about their ability to afford housing.
Compounding the impact of these stressors is a considerable shrinking of the public space through successive laws enacted since 9/11. Anti-terrorism laws, such as Bill C-36 (2001) and Bill C-51 (2015), have enabled an expansion of state power without adequate oversight or safeguards. For example, according to a report by Rideau Institute, in the decade after 9/11 Canada devoted an additional $92 billion ($69 billion inflation-adjusted) to create a new “national security establishment.” This has led to increased surveillance, diminished privacy, and arbitrary limits on freedom of expression and freedom of association; it has undermined due process in the courts through the use of secret evidence and racial, religious, and political profiling. The passage of Bill C-70 and, more recently, Bill C-9, is likely to exacerbate these conditions.
In 2014, Maina Kiai, the former UN special rapporteur on the rights to freedom of peaceful assembly and of association, said these post-9/11 changes threatened “to take the air from civil society’s lungs,” adding that the future of civil society is far from guaranteed. More recently, the impact of anti-terrorism laws on the civic square was examined in a global study produced by Fionnuala Ní Aoláin, the UN special rapporteur on the promotion and protection of human rights and fundamental freedoms. It concludes that civil society experiences complex and compounding misuse of counter-terrorism measures and practices as a result of an expansive security architecture.
The sector’s collective response to these structural changes has been excessively cautious and mostly ineffective.
While these major transformations are causing a rupture of many of the established norms of operations within the sector and its power structure, the sector’s collective response to these structural changes has been excessively cautious and mostly ineffective. The reasons for this are complex. An outdated governance framework and government overregulation and arbitrary rules has stifled any serious development of advocacy capacity within the sector. (For more thorough analysis, interested readers can refer to “Bringing the Provinces Back In,” by Adam Aptowitzer; “Overview from Canada,” by Bob Wyatt; “Charting a Path Forward,” by Lisa Lalande and Joanne Cave; “Charity Law Reform in Canada,” by Samuel Singer; and “The Co-optation of Charitable Resources by Threatened Welfare States,” by Kathryn Chan.) Secondly, there was a drastic transformation of the relationship between the sector and government, where service delivery replaced advocacy as an anchor for this relationship. In 2022, lawyer Peyton Carmichael and Peter R. Elson, then co-director of PhiLab, chronicled the history of the relationship between Canada’s charitable sector and the government (the piece was an update of a 2007 article). The increased reliance on government funding had created the conditions for a gradual but ultimately permanent shift in the sector’s focus from advocacy to service delivery, they observed. There was also the emergence of a “contract culture” in the 1990s that has only grown since. Eventually, this dependency transformed the sector into a sort of delivery arm of social programs.
This tension between service delivery and advocacy has shaped the current vulnerability of the sector, with its diminished capacity to mobilize, organize, and advocate to influence government choices and directions.
Another big weakness of the sector is structural. It is divided into key subsectors with different focuses and priorities. (Grouped according to the CRA’s four broad categories of charitable purposes, it is composed of 38% for advancement of religion, 13% for relief of poverty, 13% for advancement of education; the remainder is registered under the “other purposes beneficial to the community” category.) In addition to this diversity, there is disparity in resources and capacities among sector organizations, where a small number of large charities dominate total revenue and assets. This disparity has created unique power dynamics that make it difficult for the sector to speak with one voice or effectively prioritize agendas and sustain collective action. For example, equity-seeking advocates prioritize tackling the harmful processes of marginalization and exclusion embedded within the hierarchies of power and privilege; older and more established organizations are seen by many as more concerned with funding and the operationalization of the relationship with government agencies.
The sector should articulate a grand vision for civil society within which it can grow and find the echo of its voice.
Despite all these challenges, today our sector is summoned to adapt to this dynamic and fluid environment. For the sector to change its current trajectory, it needs a rupture from the existing model and a pivot to a new strategy and approach. Rather than seeking incremental changes within existing paradigms, the sector should articulate a grand vision for civil society within which it can grow and find the echo of its voice.
This pivot should move beyond the sector’s place within its relationship with the government and instead articulate its place in society. The sector needs to address the fundamental question of what constitutes the public space and how civil society should organize in order to claim this space and fulfill its role in a changing world.
To increase the odds for success in this undertaking, we must move past existing modalities and expand our imagination to envision a new and more vibrant civil society. We might need to borrow a useful idea of the capitalist lexicon: “creative destruction,” which was coined by Joseph Schumpeter 80 years ago. Its basic premise is that in the moment of rupture, innovation demands the dismantling of long-standing economic structures to make way for new ones, which in turn encourage the introduction and adoption of disruptive technologies. Though such change would most definitely have unintended consequences, the logic of its adoption is that it ultimately fosters long-term economic growth and improved productivity.
For the sector to declare its current and long-standing arrangements obsolete and seek to replace them with a new operational model, it should develop along three interconnected tracks:
- Our sector needs to reaffirm its mission and reconnect with its purpose but also re-imagine its role. For this to take root and form, it is not about updating our mission statements, but rather changing what we do. We need to embrace larger contexts, infuse new ideas, create new alignments, and learn from other sectors and other jurisdictions.
- Secondly, the sector needs to build capacities to address the complex problems of society today such as income inequality and racial disparities, polarization and erosion of democratic norms, sustainable development and environmental degradation, and social cohesion.
- Thirdly, the sector needs to expand its reach to other constituencies in civil society and be part of a bigger movement. It needs to consistently show up and take risks. Whether in defending protected rights, defending the vulnerable, or striving for the greater good, it needs to learn how to build a strong advocacy machine and develop effective means to mobilize.
This pivot should be built on the imperative that addressing complex problems effectively requires tackling their root causes. As Darren Walker, former president of the Ford Foundation noted in 2020, while charity can improve the symptoms of inequality, it does not address its root causes. Doing so requires system-wide change, which is difficult to achieve without government policy and strategic investments. Here are three key investments the sector can undertake:
1/ The sector should prioritize building advocacy capacity so it can play a bigger role in shaping public discourse. Notable examples of such initiatives include Maytree’s Policy School for senior policy professionals, the Vancouver Foundation’s Level Youth Policy Program, and the Public Policy Training Institute at Calgary’s Max Bell Foundation. More of these investments are still needed.
The scope of our advocacy must expand. It should focus on the rebuilding of resilient communities and the public good and challenge neoliberal modalities about the economy and its excessive income inequality.
2/ The sector needs to be bold in challenging government overreach. This can be achieved by seeking legal redress of intrusive government practices. The Charter challenges of the Muslim Association of Canada and Canada Without Poverty provide examples the sector can consider. The sector should also be more engaged in the political process in general and the law-making process in particular. Building capacities for grassroots mobilization for action should be another priority. Particularly, it should advocate for the creation of an enabling environment that helps civil society expand and thrive.
3/ The sector needs to widen its reach and expand its constituencies by collaborating with civic-minded leaders from other sectors and engaging diverse stakeholders. Twenty years ago, David Pecaut provided an example of civic leadership that inspired action and brought together diverse leaders from multiple sectors to make change. He helped drive the creation of landmark projects in Toronto that include CivicAction, the Toronto Region Immigrant Employment Council, the Emerging Leaders Network, and Luminato festival. That kind of leadership is sorely missed.
Another example of civic leadership is Alan Broadbent, who through the Maytree Foundation and the Caledon Institute of Social Policy has created innovative vehicles to identify and research the important social issues facing Canadians.
As Andrew Chunilall, CEO of Community Foundations of Canada, points out, “Oftentimes we say the barriers are regulatory, but the real barriers are relational.”
Much of the leverage the federal government has over the charitable sector stems from the confinements of the Income Tax Act. The sector should seek alternative arrangements that reduce the impact of this, even if it means giving up charitable status or reconfiguring organizational structures. For example, Greenpeace was registered as a charity back in 1976 but lost this status in 1989; it celebrated its 50th anniversary in 2021. Experts attribute its capacity to endure in part to its commitment to the original set of philosophies and principles, for instance, its refusal to accept donations or grants from corporations and governments. After a few attempts to regain charitable status, it settled on a dual operation structure where it operates as a non-profit and launched the Greenpeace Canada Education Fund in 2020 as a charity with a narrow focus on education and research.
Building coalitions and networks can be another venue to avoid the confinements of the charitable operating model. Selecting the governance and operational model should be driven more by the mission than by tax credits. Our governance should not be measured solely by the degree of compliance to standards but by its effectiveness in creating impact in the communities we serve.
More than ever, the social sector is called upon to reclaim a larger role in this adaptive pursuit for a more resilient society that is able to thrive in this new and yet-to-be-built future. At the heart of this is the re-examination of the relationship with the government and the place of the sector within Canadian society.
Canada is at a crossroads in a fast-changing and unpredictable global order. Prime Minister Mark Carney was elected on the premise of rebuilding the Canadian economy. He articulated a vision to “build one Canadian economy” through pursuing an ambitious agenda with huge investments. Back during his tenure as the governor of the Bank of England, Carney asserted the legitimacy of markets on not only their efficiency but also their fairness, as he spoke about “inclusive capitalism” and the importance of a new social contract.
The sector has a golden opportunity to engage in solutions beyond existing frameworks and boundaries and help reinvigorate civic virtue in a sector that craves it.
This generational opportunity offers the sector a chance to be a partner, not just a stakeholder, in advocating for an equitable economic rebuild where human needs are integrated with economic growth. The sector has a golden opportunity to engage in solutions beyond existing frameworks and boundaries and help reinvigorate civic virtue in a sector that craves it.
At the first Indigenous Innovation Summit in Winnipeg, held in 2015, the late Senator Murray Sinclair reminded us that “innovation is not just about new things” – it is also about bringing the past into the present to help address the challenges that communities face. Our sector can actualize the wisdom of those words by remaking the sector into a movement and a force to address current challenges and help build a more equitable and prosperous future for all Canadians.
As part of this discussion, in upcoming articles I will focus examination on three areas that would be key to rebuilding a more robust civil society and an expansive public square: the need to challenge the existing regulatory framework, re-examining current funding models and philanthropic practices, and building communities and investing in capacities to develop social capital and social cohesion.