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Intro to the Nonprofit / Voluntary Sector Lecture Notes (Classes 2-6).docx

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Ryerson University
Global Management Studies
GMS 200
Jean Golden

INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho Week 2 – Jan 13, 2014 Difference between charities and nonprofits - Charities are a special subset of nonprofit organizations o 161,000 Nonprofits, 85,000 charities - Charities are deemed to have mandates that deserve a charitable license and are accorded different privileges than ordinary nonprofits - Nonprofits are simply a special type of incorporation whereby the corporate form does not distribute profit - The CRA has four heads of charity that determines if they can be a registered charity 1. Poverty 2. Education 3. Religion 4. Other purposes that benefit the community Hall’s groundbreaking research (Pub. 2005) - Part of an international project led by Johns Hopkins University in Baltimore to “map” the world charitable and nonprofit sector - Funded by the federal government - Gives a definitive size, shape, and scope to the sector for the FIRST TIME Canada’s sector matters: - A significant economic force and employer - Worth up to 8.5% of the GDP - $75.9 billion contribution of the economy - 12% of the “economically active” population either works or volunteers - 2 million FTEs (1.5 million employees, 549, 000 FTE volunteers) - Largest sector in the world 1 INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho 1. Netherlands 2. Canada 3. Belgium 4. Ireland 5. United States 6. United Kingdom 7. Israel NP & Charities are about getting things done - The nonprofit sector is a gathering place where individual citizens can take collective action - Almost no barrier to entry and, depending on focus, tax-assisted support - Distributed power is a fundamental building block of an advanced society In comparison to other countries: - Canada has a more resilient society - Power is distributed beyond a few major blocks in society - Means ideas and drivers for change can come from anywhere - People and communities can chart their own course without permission - Canada is wealthy and progressive because it has a tradition of community action, it does not have community action because it is wealthy and progressive The government funds many large organizations – Where the money comes from (w/Churches-Hospitals-Universities) - 51% Government - 9% Philanthropy - 39% Self-generated The remainder of the sector is entrepreneurial – Where the money comes from w/o C- H-U) - 39% Government 2 INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho - 12% Philanthropy - 49% Self-generated A professional sector: - Canada: 75% paid vs 25% volunteers - Developed country average: 62% vs 38% volunteers But a very inequitable sector - Estimates that just 1% of organizations have budgets of more than $10 mill or greater than 100 staff, 54% have no staff Week 3 – January 20, 2014 Hall’s findings related to the issues facing the sector: - Government funding - Elite versus everyone else the “Bolivia problem” - Where are the donors/volunteers? - Public policy environment - Corporate engagement Funding issues: The sector is characterized by reduced funding from governments, a lack of core funding in favour of program funding that is delivered annually, not in multi- year commitments. And this is compounded by “donor fatigue” … - Big shift from core funding (accounting, printing, etc) to program funding (place, food, etc) o Core: administration and existence o Program: to a specific program at a specific time with set deliverables and clientele 3 INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho - Hall’s idea of “multiyear commitments” – government are not willing to pay so they change to program funding - I.e., homelessness: Pay for out of the cold clinic, but not the accounting where fees are from, the program director, etc The gap between elite and everyone else: - Budget for Sick Kids ($718 M), budget for Pediatric Supportive Care Network of Ontario ($20 K) - Called “Bolivia program” because it is similar to the economy in those countries In retail “Big box” versus “boutique” - Big trend is that the rich are getting richer (Sick Kids versus PSCNO) - Smaller organizations with solid market niches are doing OK - The remainder? Eroding, treading water, trying to improve - The medium sized are disappearing (1%) Donors and volunteers: A shallow pool - 9% of donors and volunteers provide 46% of donations and 40% of volunteer hours - Donating and volunteering are broad based, but a small percent is doing most of the work (80/20) Public policy issues & the sector: - Lack of a modern charitable definition o Mcnaughten 1890s UK 4 definition - Restrictions on charitable advocacy o Restriction on time speaking to government - Lack of a public voice for medium- and small-sized charities o Big charities have the resources (I.e., manpower – lobbyist) - Liability insurance a definite restriction on nonprofit success o Cannot afford liability insurance 4 INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho Business – the untapped partner? - Contributes just 3% of total resources – but business represents single largest untapped partner - A solution to volunteer crisis? - Early in the evolution of corporate-community partnerships o I.e., Timberland gives 2 weeks for full time workers to volunteer at a charity - How to translate trend into a new way of doing business that benefits both partners? Conclusion: A professional sector that makes a difference, but facing serious issues… but where did the sector come from? Paula M. The institutions that define society are a product of generations of history… understanding the past lets us understand the present - I.e., government accountability requirements 1875 The question of the “urban angel”: - St. Michael’s hospital is located just down the street from Ryerson - Hundreds of beds, thousands of staff - Why does it have an angel on the side of the building and in the lobby? St. Michael’s hospital: - Founded by the Sisters of St. Joseph in 1892 - Got the statue from a pawn shop for $49 - Had its own school of nursing and sighed its affiliation with U of T in 1920 - Now one of the top three hospitals in the GTA and one of two trauma units - But why does it look like it does? Maurutto and the origins of the sector’s relationship with government: 5 INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho o Looks at the history of Ontario’s charitable and nonprofit sector from 1830s onwards o Looks at the origins of the relationship between charities and the state o Very rare perspective – and an interesting one To understand the Maurutto concept we must explore Ontario in the 1800s - Farmer who is the bread winner dying and the community is the only ones who can help the dependent family – COMMUNITY BASED RESPONSE - Ontario in the 1800s o Largely rural, a frontier being opened o Little diversity (Protestant-Catholic is main divide) o Had serious social concerns – public health, a caring for the poor and indigent, education, etc. o Government was largely absent in the way we know of it today - The Canadian federal government (EXAMPLE) o Before 1917, almost all of the federal civil services is in East Block of Parliament  1917, first income tax (used for the war, but we are still paying it) o Now, it employs approximately 200, 000 people - **Communities responded to social need and government came later … and that is still largely the case o Government is the prime mover, they respond later Discussion: According to Maurutto’s article, churches played a central role in the early days of the nonprofit sector in Ontario. - Why did they do this? Why were they well-positioned to play this role? - Give me some theories as to why? - Church already had a similar role, so why not do this for charity Churches and the sector…? 6 INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho - One of the few public spaces not dedicated to commerce - Almost uniformly attended - Infrastructure mirrors a traditional nonprofit structure (fundraising, agendas, accountability) - One of the few non-state and non-individual actors based in the community - Informed by an ideology of caring, compassion, and individual responsibility (Protestantism) The word about the Protestant-Catholic divide: Same ideology Catholic (Centralized – Franchise) Protestant (Individual – more civil action) • Centralized authority/authoritarian • Diversified and entrepreneurial • Core ideology of compassion, • Core ideology of compassion, respect respect for the poor, ill, etc. – but for the poor, ill, etc. – but individual church takes lead and congregation takes lead • Church intercedes and tells you • It is up to the individual to look for whether you are good or bad favour in his/her life as a sign of divine grace Churches laid the foundation… - And government followed - Later in the 1800s, government began to grow and were concerned with social issues by an expanded franchise of voters - Their response came through nonprofits – why reinvent the wheel? - Medicare in the 1960s – nonprofits were already running hospitals – just like St. Mike’s Women in charities and nonprofits - Maurutto notes that local women’s associations were often the instruments of disseminating charity 7 INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho - Bell (2005) finds that, even now, the sector is female-dominated but men earn more than women at every level of the executive ranks, no matter what the size of organization - From Bell (2005) Daring to Lead – Executive Gender 66% women, 33% men Women in the sector… some hypotheses: - An extension of a socially-acceptable role? - Dealing with issues that impact them directly? - Had the time to engage (particularly the wealthier segments of society)? - Work that is valued less than other parts of society? - One of the few avenues open to them for community involvement? - About collaboration and compassion, not competition and winner-take all The cultural legacy that endures - The ingrained belief that change can come from individuals working together - These groups can then engage governments and others - Bottom-up community change – but will this endure as more time passes? Maurutto and efficiency - The first attempts to apply scientific management, rationalization of effort, etc. to the sector happen in the first 30 years of the 20 century - Consolidation and modernization were “the dominant concerns of charities’ leaders between 1900 and 1930” (Brown and McKeown, 1998) - Coordination of fundraising for charities through federated organizations such as Federation for Community Services (1919) - 1920s sees hiring of university-trained social workers This drive for efficiency spilled over from other parts of society – and still colours the sector today. Frederick Winslow Taylor: - Mechanical engineer, author and professor at a time when industrialism was growing rapidly 8 INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho - Key idea was that of efficiency – that human systems could be made more efficient and that non-efficient systems were wasteful - Stopwatch timing of assembly lines, strict measurement of processes and a focus on improvement - A practical reminder of this today – The United Way Conclusion: A sector that grew organically, established the roots of the social-service dominated sector we have today, that government funded later Who gives to charity and why? - Compassion to those in needs - Personal connection to the cause - Alberta, British Columbia, and Ontario give the most per capital, Quebec the least o The religion may not be as prominent, but the cultural ethic does not change o Entitlement Fraser Institute (very right winged) study on giving: - What provinces give most to charity? - Why? - How does Canadian giving compare to that of the US? - Important to remember that much of think0tank research has an ideological purpose - What would the Fraser Institute purpose be here? Week 4 – January 27, 2014 Politics, advocacy and the nonprofit sector - Preconceptions have always been there Deserving versus undeserving poor: 9 INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho - A concept that creates a broad differentiation between two types of poor people - Some people have fallen into poverty through no fault of their own and are “deserving” of our help (the deserving poor) - While others are poor because of their character of decisions and do not “deserve” our help (the underserving poor) - Fallacy that everyone is equipped to make said decisions The history of government and the nonprofit sector (Peter Elson) - From the earliest days of Canada, nonprofits provide social supports that the state does not - Takes a distinctly different form in the Atlantic provinces, Quebec (lower Canada) and Ontario (upper Canada) New Brunswick and Nova Scotia - The Elizabethan Poor Law came along with the Loyalists after the American revolution - Makes provision of basic services for the poor the responsibility of municipalities and counties - Province is “hands off” unless it is an emergency - “support is contracted out… to the lowest bidder, extended at times to a humiliating annual public auction of paupers” (a true privatization of poverty relief) - No differentiation between deserving and undeserving poor – the stigma of being poor applies to EVERYONE who is poor Quebec – a Catholic system - Catholic Church is THE partner in support for the poor and infirm - Has a monopoly over social services, reflecting its monopoly over society (civil government comes to Quebec in 1663) - Until 1763, non-Catholics are not allowed to settle in Quebec - Ironically, the British conquest actually increases the role and power of the Church 10 INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho - Quebec Act of 1774 recognizes the “national church” - Language and culture is a bulwark against new ideas of reform - Church provides civil services (birth and marriage registries) - Even as reforms begin (e.g. unions, professional associations), in Quebec they begin as Catholic unions and associations - Even the Caisse movement has religious origins Ontario – Protestant and entrepreneurial origins.. - Funding goes to independent, community0run boards of institutions and initiatives - Rewards community-driven initiative and favours broad representation rather than narrow religious focuses - The availability of land and resources makes people see poverty as a moral failure – there are no deserving poor o Judged because there were a lot of opportunities, why no take these opportunities? - Responsibility for most of the poor (save asylums) is assumed by individuals, community, family o Bottom-up approach - There is still growing social need, so community organizations apply directly to government for funding to supplement their initiatives – something they could not have done had the Poor Law been in effect - Charities take on certain characteristics: o Moral and evangelical o Fragmented and entrepreneurial - Protestant Christianity also fuels noblesse oblige (if you have been successful, you are expected to give back) - Very grassroots, powered by religion, and entrepreneurial (give back) The historical echoes today? 11 INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho - Atlantic provinces = government takes initiative, not community; poor are unified - Quebec = Church, then the state (after the quiet revolution) are responsible for social dynamism and social services - Ontario = local, bottom-up initiative; judgmental streak, strong community ownership and initiative - Nonprofit sector is different because of how they were shaped in the early days Turn of the 20 century - Wilfred Laurier considered one of the top five prime minister because he presided during the time of growth - The “golden age” of philanthropy? - The age of reform movements (e.g., temperance, social gospel) that are fed by growing literacy, newspapers, extended franchises and economic growth - “Progress” is the buzzword - Unionism, co-ops/caisse movements, suffragism, efficiency The First War… - Income tax is introduced for the first time in 1917 (war)[ - The first income tax is offset by “war charities” deductions (Red Cross, YMCA, Canadian Patriotic Fund) - First “registration” of charities federally - Portions of the enabling legislation (Income Tax War Act; War Charities Act) are repealed in 1920 and 1927, but a deduction of 10% - and a precedent – remains The Depression (fuels needs of nonprofit sector) - Destroys the notion of “undeserving poor” for generations (it is creeping back) - Begin laying the groundwork for a social safety net (Employment and Social Insurance Act of 1935) - Amendments to Income War Tax Act in 1930 first favour “church, university, college, school or hospital” donations, then opened up to “any charitable organizations” – the first universal tax deduction 12 INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho World War II changes everything - 1.1 million (A country of 11 M people) Canadians go into uniform and die - 60 million plus people die across the world (2.5% of the global population) World War II - Governments have to answer the question “why are we doing this – what will change when this is over?” - UK has the Beveridge Report in 1943; the March report in Canada – “freedom from want” is the new policy fad - Socialism is also a viable option and a perceived competitive social order - We begin to build and extend the social safety net – and the nonprofit sector is at the centre because it is a necessary partner This kickstarts a real “golden age” of growth and collaboration - Large nonprofit institutions come into their own (Arthritis, Diabetes, Heart and Stroke) **Canadian Cancer Society before war - Charitable donations increase 800% (absolute terms) from 1931 to 1959 – giving becomes middle class phenomenon, not an elite one - Between 1974 and 1990, welfare charities grow by 175%, health charities by $105%, educational charities by 221% - Then the 1990s hit… What happens in the 1990s in Canada and around the world that eventually “rewires” the relationship of government and the nonprofit sector? - Arbitrarily changes the boundaries of the relationship – changes the rules - Neoliberalism comes into its own (Thacture, Reagan, Malroony) - Where does neoliberalism/neoconservativism come from? o Rise in deficits spending o Stagnation & inflations – not earning more, but taking more o Too many unions (lots of strikes) Government embraces neo-liberal ideology 13 INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho - Reduced role of the state - Efficiency is a HUGE focus - Governments become funders and program overseers, not program operators - Private and socials sectors take a much bigger role - Funding for community organizations changes to short-term contracts to DO specific deliverables (similar to private contracts) - Accountability is a key focus, but it distorts the nature of nonprofits - Applying a rationality and efficiency focus - 1994 cut federal spending (start to pay back federal deficit) The response of the sector? - Mobilize, organize, push back - Coalition for National Voluntary Organizations is ineffective, so is supplanted by the Voluntary Sector Roundtable, created by 12 large national nonprofits - Set up the Panel on Accountability and Governance in the Voluntary Sector in 1997 (Broadbent Panel) - Issues a report in 1999, federal Liberals respond with Voluntary Initiative – a five- year, $95 Million initiative The VSI – visionary or a symptom of what’s wrong with the sector? - Creates structures in first two years (joint tables) - Develop a framework agreement between the sector and government - An Accord is signed and two Codes of Good Practice - Some regulatory reforms, voluntarism initiatives, research, HR and policy initiatives - It ends in 2005 and … what is the sector left with? The legacy of this recent history? - Shift from core to project based funding - Increased reporting and accountability standards 14 INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho - Funding contingent on compulsory collaboration - Perception that volunteers are a ready pool of labour - Belief that market models lead to greater efficiency AND - Fragmented sector that can’t speak for itself - Limitations on advocacy and a horrible policy environment Program: Relationship between the government and nonprofit is not working, how do we fix it? - The main concern is that government (people) are not willing to pay for these services. (Underlying reason for neoliberalism) Since nonprofits are expected to be transparent taxes should be increased on private organizations and regenerated into the country - “Tough love” Since governments are not forth giving nonprofits should learn to utilize the system to gain greater benefits. We live in a democratic society and if the greater population learned about what is happening then they can mobilize and change policies. (AIDA – Think) Week 5 Lecture – February 3, 2014 Questions 15 INP 900 - Introduction to Nonprofit and Voluntary Management Jessica Ho It’s 2018. You have graduated, and are now in a job where you are earning $80,00
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