Canadian charities: the good, the bad and the ugly

by Kevin Donovan

With 82,000 charities in Canada and billions of dollars in revenues, philanthropy cannot help but make news. A well-run charity serves those in need and uplifts the people involved. A poorly run charity is a scandal. Both situations create headlines.
I did my first charity investigation in 2000. I looked into the National Society for Abused Women and Children. It started with a tip from someone in-the-know. The charity had been registered by the federal government on the promise it would counsel and shelter women and their children. I did some digging and found that the “National Society” was a scam from start to finish. I presented my findings to the charity’s executive director, who promptly confessed (which does not happen every day). The “National Society” had taken more than $1 million from the public and returned nothing of value. It took three years, but the authorities finally shut the charity down.

In 2002, and again this year, I probed the philanthropic world with colleague Andrew Bailey, using a database of charity financial returns we had assembled. From the investigation, we learned that there are many wonderful charities in Canada and that their stories deserve to be told.  But we also learned that Canada’s charity world is a “Wild West” for scammers. While the Canada Revenue Agency and provincial authorities privately acknowledge the situation, they say they are powerless to deal with the problem. Political will is needed to watch over charities, and Ottawa is perennially silent on this matter. I’m told that legislators don’t want to ruffle the feathers of good charities, which is odd, because it’s the good charities that tell me they want to see action taken.

Public reaction to my investigative stories on charities is massive. I’ve gotten calls and emails in the thousands. Some charity leaders are prickly about the stories. They say they fear my stories will stop philanthropy, but I don’t believe that’s the case. Judging from the calls I get, people don’t want to stop giving. They just want to know which organizations use the money well.

This fall, I sensed the winds of change finally blowing through the charity world. Big charities exposed in our Star investigation admitted they were wrong. For example, both Sick Kids Foundation and World Vision have now changed their commission-based fund-raising practices. Mothers Against Drunk Driving has finally agreed it should not have claimed millions of dollars in telemarketing fees as charity; the admission will have big repercussions across the country. And the federal government has finally cracked down on charity schemes that promise they are saving the world, but in reality are selling inflated tax receipts.

Most importantly, Imagine Canada, the voice of philanthropy in this country, has developed a backbone. When I did my first investigative series on charity, the predecessor group of Imagine Canada was scathing in its response, denying any problem existed in the charity world. Now, with a different boss and mission, Imagine is talking tough about people who abuse the trust of well meaning donors.

There’s lots of journalism to be done on the subject of philanthropy, but few reporters write about charity – the good and the bad. I don’t know why. I suspect that situation might change if editors realized that a single charity story draws over 500 responses from readers.

Read “$1.4 billion tax scams nail donors“and “MADD charity mends its ways

Kevin Donovan was a panelist at the sold-out event The Charitable Sector and the Media: Accountability and Reporting, co-presented by the Canadian Journalism Foundation and Imagine Canada, which took place in Toronto in October, 2007.