Top 50 Equitable Funders - why you should care
QuakeLab is very proud to be launching Canada’s Top 50 Equitable Funders in conjunction with Future of Good.
QuakeLab and Future of Good collaborated on this project for more than a year because we knew it was a groundbreaking body of work, not just for the sector - but Canadians in general. Here’s why this project has been so important to us, what it means for you and why this is an equity issue that should be concerning to all Canadians. The topline here is that:
The charitable sector is huge
Everyone is affected by charity either directly or indirectly because of the tax breaks that charities receive
Funding has traditionally been opaque with a potentially detrimental effect on small charities and non-profits that are overwhelmingly run by women, Indigenous people, people of colour, disabled people and others.
Let’s get into it!
The charitable sector in Canada is no small fish; It accounts for 8.2% of gross domestic product, and the entire industry is worth $216.5 Billion dollars in economic activity. Yes, Billion with a B. The funders in our dataset were the largest in Canada by asset size according to their 2022 Canada Revenue Agency (CRA) filings. The Top 50 Funders, collectively, have a total of just over $69 billion dollars in assets under management - which is a fancy way of saying that’s how much money they control.
With these kinds of numbers, it’s easy to forget that we’re talking about, charity, not the financial sector or manufacturing. Following the strictest definition of charity as defined by the CRA (the body that is gives charitable tax breaks to these organizations), these are organizations that are broadly categorized into four groups:
Relief of poverty
Advancement of education
Advancement of religion
Other purposes that benefit the community in a way the courts have said is charitable
We’re talking about relieving poverty here and there’s 70 billion dollars on the line - this is why it's important! In a time when we’re constantly hearing from social service organizations that the government is not funding them, that they’re having trouble getting operational funding and volunteers, this is troubling. The CRA mandates a minimum disbursement of 5% a year on the foundations that own over $1 million in property. With record interest rates in recent years, and the already generous endowments that foundations have has continued to grow exponentially as they invest that money in property, stocks, bonds, GICs and more. This is not necessarily a bad thing, it’s a fact. But this is where you, dear reader, whether you’re someone working at a small charity, or someone who donates to charity (large or small) should care.
Equity principles and dismantling inequitable systems are also about the distribution of wealth. The distribution of wealth is uneven and when discussing the charitable sector, it can be easy to forget who is supposed to be in receipt of this money when we’re throwing around words like “endowment”, “billions”, “assets”, etc. At the end of the day, this money trickles down to organizations that are doing incredibly important work that span the gamut , from helping people find jobs, settle refugees, conserve the environment, feed hungry families, protect animals and mentor youth, amongst many others. Each of us has likely been touched by charity in some way, directly or indirectly. Maybe you’re fortunate enough to just be someone who is able to donate money - but that means that you should know how your dollars are being spent. Or, maybe your family has used services like meals on wheels, or maybe your nieces, nephews and niblings attend a summer camp that is run by a social service organisation.
There’s also a possibility that you don’t donate and don’t know anyone who uses any services. And with an ongoing cost of living crisis and statistics indicating that charitable giving in Canada is at record lows this is a distinct possibility. However, charities don’t pay taxes, while the average Canadian pays taxes to all levels of government to fund schools, hospitals, national defence etc. And so, if we’re forgoing the taxes that charities could be paying into central revenue and giving them a tax break for the alleviation of poverty - then we should know whether they’re doing it well.
As a company, we work in service of people who are equity deserving, because we care about our community and we’re invested in dismantling inequitable practices within systems. And thus, pushing grantmaking foundations to seriously consider whether they’re actually supporting the people they’re serving with their funding decisions, and their funding practices is critical. No longer are equity principles like fairness, transparency and accountability a nice thing to have - they’re increasingly some of the most important metrics in determining whether charity is meeting the need.
The Canadian charitable sector employs 2.4 million people in Canada, and has an over-representation of women and people of colour as employees. Yet, at the Board level, where critical decisions are made, less than half of these positions are filled by women, and there’s an under-representation of people of colour. We know that there are activists in our community who would advocate for a complete demolition of the nonprofit sector, but QuakeLab recognises that blowing everything up, leaving a void may also be just as harmful to the millions of women and people of colour whom the sector employs. In an ideal world, we would love to take the 70 billion dollars and divide that up between every person in Canada suffering from poverty - but it's not that simple. That also doesn’t mean that the sector can’t be improved.
This is where the Equitable Funders project comes in.
QuakeLab and Future of Good set out not only to rank but to celebrate, and encourage the sector to do better. When we begin to identify the equity practices that foundations should be taking, especially as it pertains to how they fund, who they fund and how those decisions are being made; we can start to measure how equitable a funder is. This, in turn, helps organizations applying for funding. For years, smaller organizations especially those led by people of colour, immigrants and women always felt locked out of the funding cycle. In an age where only 11% of charity funding comes from government and the rest is made up of donations often funneled through foundations, it is increasingly important that there is some sort of mechanism in place to measure and track progress and change.
It is our wish that, over the next decade, the annual ranking of Canada’s Top 50 equitable funders will move the needle for foundations to reconsider their equity practices beyond prioritizing aesthetic diversity (diversity comprised only of putting people into positions based on identity without valuing their lived experience and contributions and knowledge). Our methodology seeks to have funders consider the pieces that are harder and less noteworthy. We’re seeking to understand who in the industry understands the ways that traditional philanthropy has been harmful, how the white saviour complex that has past permeated the charitable sector is harmful and why equity work demands of all of us to do better.
Over the next few weeks, we’ll continue this series about the Top 50 Equitable funders project, taking a deep dive into the methodology and some of the excellent examples we saw along the way. If this has resonated with you, we hope you’ll reach out and consider how we can work together.
