A revolution is brewing.

It began as early as 2006, with the realization by some that the Canadian nonprofit sector needed to project a cleaner, more trustworthy image to the public and to donors at large. The catalyst for this thought was the 2009 introduction into parliament of former Liberal MP for Mississauga East-Cooksville, Albina Guarnieri‘s Private Member’s Bill C-470.

The bill sought to force a salary cap on executive level salaries in the sector as well as muscle charities and nonprofits onto a path of greater transparency of their operating budgets and expenditures.

Despite its brief life in the House, the bill galvanized the resolve of many actors in the sector to start cleaning house, one of whom, Marcel Lauzière, president and CEO of Imagine Canada, decided to take the lead.

“Organizations we talked to were concerned about how to improve their systems, be well-governed…it’s not that they’re doing a bad job of it, it’s just that it’s much more on people’s radar than it was in the past. That’s where you start to provide the credibility you need,” Lauzière told CharityVillage.com® in an exclusive, sit-down interview at his offices late last month to discuss his organization’s answer to the Guarnieri flashpoint. Enter Imagine’s pilot Standards Program initiative.

If a bill such as Guarnieri’s had made it to parliament — Lauzière and his sector colleagues thought — despite its many flaws and assumptions, the important thing to take from its creation was that the will of the Canadian people was on display. And that will represented the collective blowback from every negative piece of news that showed charities and nonprofits to be run by dishonest brokers, regardless of the sensational nature of the reports or the incredibly small percentage of sector organizations these stories represented.

Something needed to be done, and done fast.

Let’s get ethical

Cathy Barr, Imagine’s senior vice-president, said the new Standards Program (which will replace the organization’s Ethical Code program, now being phased out) is being designed to up the ante on accountability in the sector and will hopefully one day be the recognized standard for all nonprofits in the country.

“People working in charities and nonprofits are becoming aware that the fact they are doing good isn’t enough anymore. This [initiative] is a way to recognize the good practices that are being done. The public now wants to see how charities are being accountable,” she said. Lauzière added that the new program is also about “capacity building” and helping charitable organizations across the nation “raise their game.”

Citing the book The Decline of Deference [University of Toronto Press, 1996], Barr said it was only a matter of time before the Canadian public began to stop deferring to the charitable sector and assuming it was being well-run in all aspects, the same way it had stopped deferring to the corporate world in the wake of Enron and other scandals.

“Now this is hitting charities too. Maybe [the nonprofit sector] was the last bastion of the type of organization that didn’t have to be so upfront” about how it operated, she said.

According to Imagine’s website, the new program is being designed specifically to implement “a Canada-wide set of shared standards for charities and nonprofits wishing to enhance their effectiveness in the fundamentals of governance, paid-staff management, financial accountability, fundraising, and volunteer involvement.”

Whether it’s improving the quality of reporting on a charity’s T-3010 to the CRA or setting internal guidelines for issues like how best to appoint a board or calculate work hours, these new standards will hopefully allow the sector to regain some lost lustre and echo the for-profit world’s “good corporate citizen” push of the last decade.

Good riddance to bad governance

“One of the things this initiative will give us down the road is better [sector] knowledge to bring to decision-makers,” Lauzière said, alluding to a future where charities are not looked upon skeptically by citizens and legislators alike for murky reporting measures and expenditure accountability, because they will be regulated homogeneously via this program, or some outgrowth of it.

He qualified that the standards will never remain static, “nor should they be,” Lauzière said, but instead would change over time as contexts and best practices change.

And the whole thing is being done without government dollars. Lauzière said he and his team did not want any federal funding lest they be tied to (and tied up in) regulatory delays and suasion. That said, he’s eager to clarify that this initiative is not something his organization is imposing on the country’s nonprofit sector. Indeed, there is no obligation for any organization to join the program, though Imagine’s 50 founding member organizations and others have put up their own cash as seed money to fund it.

“There has been broad engagement in this initiative. This is not Imagine Canada that has gone off and developed standards and we’re now coming down from the mountain saying ‘here are your standards!’ They really have been developed with a variety of organizations across the country,” Lauzière said.

There is also some corporate investment in the initiative. One of Imagine’s leading sponsors is Canadian insurance giant Great West Life. Jan Belanger, the company’s assistant vice-president of community affairs said she “shares an interest” in supporting Imagine’s program.

In fact, that interest has translated into some $300,000 of seed money over five years to help Imagine get the program off the ground.

Belanger told CharityVillage® that her organization makes “well-considered decisions on how and where to allocate our corporate giving in the infrastructure of our communities. We also have great confidence in Imagine Canada’s vision. That’s why we have built on our support for the Ethical Code Program and committed multi-year funding for the standards program.

“In sponsoring Imagine Canada’s development of broader standards for charities, we’re committed to helping Canada’s charities strengthen relations with their donors, use resources efficiently and responsibly, and position themselves for long-term effectiveness,” she said.

Belanger did not answer why her organization has taken such a keen interest in this program specifically, though a company spokesperson indicated she would elaborate on that in future stories on this subject.

If you build it, the nonprofits will come

In addition to fleshing out a program that provides standards and objectives for all who wish to follow, Lauzière said Imagine will oversee reviews of the participating organizations on a periodic basis conducted by “standards committees” to ensure compliance.

The goal is not to scare participants into compliance, but to allow them time to adjust and rejig their governance systems in order to better fulfill their missions. To that end, the pilot program, which is scheduled to run through 2012 and officially launch sometime in 2013, will feature a peer-review process. All participants will be obliged to go through the review in order to identify areas they can improve.

According to Barr, it was the participating organizations themselves who insisted on a “rigorous” peer review process in order to get the standards program right.

For Lauzière, the long-term goal is to position Imagine’s Standards Program, and the organization’s associated “Trustmark” branded logo, as the sector’s “seal of good housekeeping.”

“A trust mark is only as important as it is known. Imagine Canada needs to be the leader in communicating this,” he said, adding that the hope is this trust mark will become such a symbol in the sector that organizations that may initially have chafed at the idea of participating or paying to join the standards program — opt-in fees range from $400 for organizations earning less than $250k annually up to $8,000 for those with annual revenues of more than $25 million, plus annual renewal fees — will feel a sort of peer pressure in order to compete with rival organizations and stay in good standing in the eyes of the community.

Barr added: “We have no expectation that all 85,000 charities [in Canada] will join. But we already have 400 organizations involved.”

She said she expects that “sometime within the next 10 years” the standards will reach a tipping point where organizations will all clamour to be involved. “In some subsectors this is already happening, where charities who initially ‘poo-poo’d’ [joining] have now come around.”

Lauzière acknowledged that this venture is a big risk for his organization, as it strays closer to an oversight type of body instead of purely an educational one for the sector. Despite this, he is firm in his belief that this is the best way to go to rehabilitate a sector that has taken many knocks — some valid, most not — over the years.

“Anything we can do to shift the perception [that charities are badly managed] will be helpful,” he said. “There’s a professionalization that doesn’t negate volunteerism. This is about a new vision and changing the narrative.”

Look for future stories on the Standards program as CharityVillage® interviews some of the participants going through this pilot program and what this process has meant to them and their organizations.

Andy Levy-Ajzenkopf is president of WordLaunch professional writing services in Toronto. He can be reached at andy@wordlaunch.com.

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