Top 50 Equitable Funders - a deeper dive into why this is an equity concern

The Top 50 Equitable Funders project aims to measure and track whether foundations issuing grants in Canada are considering and embedding equity into their strategies. But also its important because grantmaking foundations now outstrip government in their funding of social service organizations by a wide margin. About 11% of charitable funding comes from the government - the rest of it comes from donations. And the pipeline of funding for small, local charities continues to be predominantly through funding from large foundations - a double charity funnel if you will before the money actually goes to your local food bank, animal shelter or employment hub.

All charities in Canada, regardless of size, receive tax breaks. In other words, we’re forfeiting a portion of national revenue based on the belief that these organizations can provide those services better than the government can. But why do we do that, and is this an equity issue? Of course it is! Let us explain.  This is going to seem a bit strange, but stick with us on this history lesson.

The origins of modern day charity the ‘Western’ context was first seen in the Charitable Uses act of 1601, all the way back to the reign of the first Queen Elizabeth. The list in the preamble to that Act, contained a number of purposes which were considered charitable and where the government of the time wished to encourage private contributions. You can read the full list here but the cliff notes is that this was a way for private contributions to help the sick, the elderly, veterans and build schools and churches. This has formed the basis of what we know to be charity and continues to this day. 

When we take a leap forward, the concept of a charitable organization really gets fleshed out when Lord Macnagthen wrote in 1891 that “Charity" in its legal sense comprises four principal divisions: trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community…”

In Canada today, charities are defined in 4 categories: 

• Relief of poverty

• Advancement of education

• Advancement of religion

• Other purposes that benefit the community in a way the courts have said is charitable, the alleviation of poverty, 

This list is very similar to the list above. In other words, it  hasn’t changed much in 133 years. But a lot about the world has changed in that time. And here, it’s helpful to remember why governments encouraged charity in the first place. In a Government of Canada’s publication from 1996, it states that “social services could be provided much more efficiently by charitable organizations […] communities and local agencies are in a better position to assess and meet these needs economically than government employees working in a capital city far removed from the people they serve.”

This is the equity argument at the heart of the Top 50 Equitable Funders project. Local charities - the charity that’s run by a single person or a group that sees a need in their community and goes to address it - has a better sense of what is needed than a bureaucrat or executive far away. So how funding is apportioned and to whom, how the decision is made, how the money is grown and spent and the imposition on the local charity for that funding all goes to heart of whether it’s meeting the need. 

This rings particularly true for Black, Indigenous and other racialised people and poses a problem when the charitable ‘industry’ increasingly wants to have data and information to substantiate the need. In the 2020 report “Unfunded: Black Communities Overlooked by Philanthropy” a Black community leader is quoted saying: “...while Black communities know what their needs are through the work they are doing on the ground, the sector understands need through data.” 

This is not to say that data is not important. Data is very important but collecting and substantiating data also takes resources, which becomes a catch-22 for small non-profits, because they don’t have the data to substantiate the need which they can see in front of them. Further, how  data is gathered and tracked is also critical and when done incorrectly, can actually cause harm to vulnerable people, groups and populations.  So, not to sound like a broken record, but embedding that equity lens into what a foundation demands of its grantees is not just a nice to have, it’s critical to reducing further harm being perpetuated against already marginalized and potentially vulnerable people.

The charitable and non profit sector, as outlined in our first blog post, is huge and worth billions of dollars to the Canadian economy. If the sector as a whole understands the needs of the community it serves in one way, and is making decisions on flawed information - that’s a big problem. The Canada of 2024 is very different from the UK of 1601 or 1891 or even the Canada of 1996. An equity lens is not just nice to have - it’s imperative to ensure that charity and the delivery of social services meets the needs of the people it is serving.

This project celebrates the organizations that are changing and evolving their understanding of community needs, adapting their practices procedures. If you too are  hoping to adapt, embed equity in your systems and build for change, get in touch with us - we would love to work with you!