Tuesday, February 28, 2012

The Drummond Report: Thoughts on Charitable Impacts

The recent publication of the Commission on the Reform of Ontario's Public Services' (Chaired by Don Drummond) report, "Public Services for Ontarians: A Path to Sustainability and Excellence" has generated a lot of press.  Having reviewed the full report, here are few thoughts on implications to the charitable sector.

There are 3 Chapters that have the most relevance to charities and non-profits.

Chapter 3 discusses the Commission's Mandate and Approach.  The recommendations in this section suggest that the provincial government not make across-the-board cuts, and seek to preserve investments where good value for money is being achieved.  The trick here will be determining what metrics are used, and who determines what "value" is important. The Report also clearly supports "privatizing assets and moving to the private delivery of services wherever feasible", but also suggests that this not be done "for ideological reasons".  While it is Federal government example, the track record with respect to Bill C10 (for example) suggests this may be easier said than done.  Regardless, charities should be aware that this paradigm of privatization is now firmly established as the model going forward.

Chapter 8 is all about Social Programs. Since many charities and non-profits operate in this arena the recommendations are of particular interest. My perspective is that most of these recommendations seem reasonable and align with current initiatives / themes already under discussion in our sector.
  • Reform funding practices in the non-profit sector... reduce administrative costs by focusing on measuring outcomes rather than inputs. My only concern here is that measuring only outcomes can have unintended consequences!
  • Improve the responsiveness of the government to the non-profit sector by creating one "window" through which all non-profits can engage all provincial ministries. This seems desirable so long as we don't create another huge ministry that actually adds costs and inefficiencies!
  • Explore the use of Social Impact Bonds. They're all the rage right now, so we might as well jump on the bandwagon... And maybe they'll be a truly valuable addition to our funding toolbox.

Chapter 16 is focused on Operating and Back-Office Expenditures. The report gets a bit technical here and yet from my point of view misses a key opportunity.  While the Report is not focused on the charitable and non-profit sector, a clearer message that provincial funding would be looking to support organizations that were seeking "back of house" efficiencies through mergers, "hubs" and formal partnerships with other like-minded organizations would have been a big step.  Recommendation 16-9 does say that "consideration should be given to rationalizing and consolidating programs that regulate inter-related sectors or that could otherwise gain efficiencies from greater integration", but does not speak specifically to our sector nor to these sorts of efficiency opportunities.

The main message? That for better and for worse cut-backs and change are coming to the charitable world.  But then, you already knew that!

Sunday, February 19, 2012

Everyone on the Charity Bandwagon

Having spent many years in the Consumer Packaged Goods (CPG) world I'm always interested in what happens in that sector. So I make a habit of filling out a survey once in a while as which companies are asking what questions can tell you a lot - and I'm not adverse to a coupon for free stuff once in a while.

I was particularly intrigued last week however when I noticed a question at the bottom of the multi-page survey: a detailed query on which types of charities I liked to support. So clearly the folks at the survey company are either getting interest from the CPG firms in this kind of data, or they believe there's money to be made in having this sort of info available for the CPG firms.  Either way it's another sign of how pervasive the links between corporate giving (and more broadly Corporate Social Responsibility [CSR]) and corporate business plans are becoming.

Whether this is actually good news for the charitable world is being hotly debated, but I believe the debate on the value of greatly increased direct corporate-to-charity giving boils down to simple question of motivation and leadership.  If corporations jump on the bandwagon because it's the "flavour of the month" this will distort charities as they seek to access these funds, and hurt them when the next new marketing vehicle is found. Worse yet, there is the risk that other donors will see through this thin facade of corporate largesse (e.g. "pink-washing" backlash) and begin to believe that all corporate-charitable partnerships are selfishly motivated, which is thankfully and clearly not the case.

But if this is part of a broader move to deeper and broader partnerships between corporations and charities then we all benefit.  In the long run the leadership of the CPG firms, and the CSR values that they infuse into their organizations, will determine the nature of this relationship for better or for worse.