Interview with Marcel Lauzière, President and CEO of Imagine Canada

Why the ever expanding non-profit sector needs innovative students like you

By Luis Fernando Arce, Chief Interviewer, Arbitrage Magazine

Photograph by Tal Gertin

The Arbitrage Magazine spoke with Marcel Lauzière, President and CEO of Imagine Canada, about the role of charities in the lives of Canadians’ lives and the rights and responsibilities we all share in supporting these organizations. We also talk about the Student Verb Charities Contest.

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Just to start, can you let me know a little bit about Imagine Canada? What do you guys do and what do you hope to achieve?

Imagine Canada is a national umbrella for charities and nonprofits in Canada. It’s a relatively new organization. We created it in 2005 out of a merger of two other organizations: the Center for Philanthropy and Coalition of National Volunteering Organization. The whole idea of the merger was to have these two national organizations – one in Ottawa, one in Toronto – come together and work more effectively to better support charities in Canada. So we had three broad goals: one is to strengthen the voice of the charitable and non-profit sector (NPS), which are broad in terms of environment, international development, social services, health, and education. While the sector is very broad in the type of work it does, it’s also very similar in the active issues that it deals with and why it wants to support Canadians as well as those around the world, through international cooperation.

So that’s our first goal: to strengthen that voice, so that we can stand side by side with government and with business as the third pillar of society. Secondly is to be a forum, a meeting place, where people can come together, gather virtually or face-to-face so that you can share information, expertise, and innovation. And the third one is to create an environment that makes it easy (an enabling environment) for charities to get on and just do their work. We need an environment that looks at taxation issues, capacity building issues, labour market issues, etc. Anything that we can do to create an environment that will make it easier for charities to actually support their communities.

And what is your involvement with the government? How do you facilitate this interaction?

Wee are a national organization, so we mostly work with corporations and the media. But when we work with the government, it’s mostly with federal government, because it is in many ways the federal government, through the Canada Revenues Agency (CRA), that has regulatory oversight of charities in Canada. We also work at the provincial level, but usually with partners that are more regionally or provincially based. So we’ll talk to governments about a variety of things. Right now, we’re talking about promoting something which is called the Stretch Tax Credit, which would be a new type of tax rate to challenge Canadians to give more, but to challenge ordinary Canadians, of all walks of life. We’ve helped a lot over the years, to help wealthy Canadians be good philanthropists, which is good.

But now what we need to do is talk to Canadians of all walks of life and tell them when you donate to a charity, whether you’re donating $300, $100, or even $25 dollars, that makes a huge difference. In other words, everyone can be a philanthropist. You don’t need to be giving thousands or millions of dollars. Your small contribution will make a difference. So the idea of this stretch tax credit is to encourage people to keep on stretching their giving year after year. That’s one piece we’re interested in. Another piece includes work we’re doing with the federal government, where we’re looking at a regulatory environment that allows charities to really innovate in terms of how they generate revenue.

Charities generate revenue in three ways: through government, contracts, and grants. And that’s really going to be tough in the years ahead, as most of our governments are looking at deficit positions, so they’ll be looking at everywhere they can cut. Then there are philanthropy donations. We’re not in a crisis situation, but the trend is not really good, so we have to be concerned about that. The third way is developing products and services that will generate revenue for organizations to be able to deliver on their missions.

Such as what?

At Imagine Canada, for example, we have an online directory to help charities identify both corporate and private foundations to fund their services. That’s a revenue generator from Action Canada. But rather than just being a revenue generator, now we’re looking at it as a social enterprise. How can we develop this and make it much more competitive, and much more effective as we generate real revenue that will come into the organization. We’re doing it because it’s good for the sector—charities need that kind of information—but the dollars we can generate through an online tool like that allows us to fulfill our mission.

There’s a variety of things that you can do to allow organizations to be more entrepreneurial in terms of types of products and services they can either deliver or develop and then get out there into the market. But that means you have the skills necessary to be able to do that. You need to convince banks that they can loan to you even though you don’t have any equity. So it’s a new environment in which we’re working, but we feel it’s really essential if charities are actually going to generate the revenues they need in order to support Canadians and communities. Governments and philanthropists are not going to be enough within the years ahead.

Do you see a lot of business students—especially those with entrepreneurial spirits—coming into the non-for-profit sector?

Absolutely. I think this next generation of kids who are in their 20’s or even early 30’s, are very often thinking differently … . A lot of them are coming in with great ideas and they just want to find a way of doing it. So I think there’s a lot of innovative thinking coming into the sector. The problem, I think, is we are in a position where we are not sufficiently on the radar.

By “we” do you mean Imagine Canada?

No, charities in general. As a sector we aren’t often on the radar of graduates in colleges or universities who are looking to work in government, or for businesses. Too few I feel are saying, ‘I want to have a career in the non-profit sector or in the charitable sector, because that’s where I want to contribute to society.’

And what is it that we can entice students with to get them into this sector? Because like you say, it’s obviously not going to be working with the government or the private sector, so perhaps in making a lot of money. Is that the angle?

I think the angle is contributing in a different way. And there is a myth: there are very small organizations in our sector that can’t pay or have difficulty paying reasonable salaries and benefits. But there are also some larger organizations that can pay very well and do have benefits. And whether they can pay or not, one advantage, I think, is that the sky is the limit in terms of what you can do and the boundaries that you can push. You may not always have the resources you want, but you certainly have a very, very strong mandate to do a lot. So for a lot of students coming to the sector, I think it’s a way to get an opportunity to experience a variety of different types of jobs and responsibilities, which may sometimes be more difficult to get than if you to work in the government or corporations where it may be more rigid in terms of what you can and cannot do.

And there are a lot of opportunities. … What we were going to see is the non-profit sector taking increasingly important roles. Even if you think students, for example, in the area of public policy, … [regardless of the industry] a lot of the great policy thinking is coming from the non-profit sector. Governments are doing less of that, and more of these ideas are coming from charities and nonprofits and that is really quite exciting.

And why do you think that is?

I think generally governments are looking at how they can be smaller and at how they can be managers of the economy. I don’t think there is—this is my own opinion—much room for broad innovative policy thinking in government right now. And that is not with any particular government, but I think that is across the board. I think we’re seeing a lot of the great ideas come out from the non-profit sector and to a certain extent, from business also. As a business, the NPS is not only a sector that is strictly out there to do good things. We are actually dealing with some of the most intractable social, cultural, environmental, and economic issues. And we need to track the best talent to come and work with us to try and address those issues. So that is really exciting and hopefully if we can get on the radar of students then there may be increased interest to come work with us. So that is part of why we’re launching this contest, to get students to think about the rolling contribution of charities in Canada. And hopefully directly from that say this is where I want to go work.

Before we get to talk about the contest, what would be your advice for students who are sure they want to get into the non-for-profit sector, either as entrepreneurs starting their own business, or joining an already established organization? What would their steps be?

Well first of all you should do your research. Look at organizations that really interest you—organizations or issues that you can be passionate about. And look at a variety of organizations that may interest you and whether or not they are having an impact, if they are having results – it’s that type of organization you like to work with. We just launched a portal a few weeks ago and it’s called Charity Focus, which is a one stop portal where you’ll get information on all 85,000 charities across the country. And that’s a great search function. For example, you decide you’re looking for a charity that is interested in working only with young kids in northern Alberta—that’s what interests you. Well, you can do the search and you will find all the organizations that are working that area and then you can have a look at them to see if that’s really where you want to work. There’s also volunteering if you can, and getting a sense of the sector and the organizations. That’s really important. And then talking to people working in the sector itself and saying why they are interested; what are the types of things that brought them into it?

What I’d like to see down the road are not-for-profits at job fares. But it would be great for the non-profit sector to do that so that people can actually come in and talk to people in the sector. We are thinking of ways of doing that. But because it’s not happening right now, I think the way to do it is to do it virtually. Charities are a much bigger presence on the web than they were before. Charity focus will help people find them also. Social media is helping, absolutely. And that’s another reason why I think non-profits and charities will increase in the years ahead.

Is there a difference between the charitable sector and non-profit sector?

Rather than going through all the legalities, in general, all charities are nonprofits, because to be a charity you have to be incorporated as a non-profit. But of course not all nonprofits are charities. So to give you a big example, there are about 160,000 nonprofits in the country. Of that, 85,000 are charities. The big difference, of course, is they are registered by the Canada revenue agency, they are involved in philanthropy one way or another, and many of them raise funds and make enough to be issued tax receipts which nonprofits can’t. That would be the main difference. But when you look at the work of both, sometimes, they are very, very similar. It is a decision you make often whether you want to be a charity or whether you want to remain a non-profit.

I’ve noticed a lot of people have apprehensions about donating money. They don’t know where their money is going, and they don’t know if all of their money is ending up for the purpose they sent it for. How do you address this problem?

The portal we just launched was launched with that mind actually. It’s about providing easier access to information for individual citizens who want to know more about particular charities. So when you go there, you will find all the financial data that a particular charity has. Where the dollars are going, what the revenues are, the expenditures. But at the same time, no balance sheet is going to tell you a lot about impacts or results. So what Charity Focus Portal allows is charities to upload their own additional information: their reports, their social media feeds, their testimonials, their impact assessment, etc. So when you come as a Canadian to the site, you can look at both the numbers, but also at the broader picture. And very often, unfortunately, people think that the best indicator of charities is how little they spend on administration, on overhead costs. So people will say 99 cents of my dollar to go to the cause, and that is great if you are giving because you want to feel good. But if you really want to see change and results, then an organization that isn’t spending on infrastructure is not going to have any impact.

What is a good balance?

There is no magic number; [maybe] 20%, 25% … . But if its 25% and the organization is a non-effective, that doesn’t tell you anything. You have to look at what they are doing. Look at whether or not they are reporting on their results. Whether or not you think they are having an impact. And then say that is where I want to donate, or work, or volunteer with. But an artificial number will tell you nothing. And the idea that you can work with impact with no infrastructure … then I think we are on the wrong track. You need skills, technology, good governance, need to be able to communicate. All those things cost money. All those things are considered administrative costs. But they can be a really good thing if at the end of the day you are having results. I’d love to say to people there is an easy answer where I can give you the number, you look it up, if it’s wrong you move on and give to another charity. But it is not that simple. Of course if an organization has 80% administrative costs, then you probably want to look elsewhere, but if it is 20, 25, 30%? There really is no way to say because every organization does different things.

I’ll give you an example. You have two food-banks. One has 7% administrative costs and the other has 20%. But the one with 7% is providing second quality food, has no other … itinerary services to help those coming to the food-bank to help them find a job or get training or help them with any family support that they would have. So it’s very, very basic stuff, that 7%. The other organization has 20% but they offer a whole variety of services to help those individuals coming to the food-bank, such as finding a job, or getting training, cooking lessons, whatever. Who would you want to give to? To the one with 7% to feel good? Or to the organization that actually has the wherewithal to be able to make a change? … Our message is: take the time to do your research and don’t stop at trying to find that magic number that’s going to tell you whether or not it’s a good organization or not because you won’t find it. Look at the broader picture: whether or not they are having results. And if you connect with that charity and they are not being transparent, then I say move on to the next one.

Well you obviously work with a lot of these charities … do you find a lot of cases of non-transparency, or is the money mostly getting where it’s supposed to go?

Very few charities have any reason not to want to be transparent, [since] they are increasingly aware that Canadians are asking questions, and that is a good thing. They want to see results, and charities have to be upfront about how they talk about their results, and how they show their numbers. So it is a very small minority, but those stories often make the front line when there is something happening out there. [W]ith 85,000 charities in the country, of course some will be less effective than others. But overall, the sector is very interested in transparency and takes it very seriously.

What do you recommend for people who get workers who come door-to-door and ask you to donate money for charities? Can people trust them?

The first thing you want to ask is make sure they have a registration number with the Canada Revenue Agency. In other words, are they a legitimate charity. If not, the first thing is a ‘thank you’ and then shut the door. But then even if it’s a legitimate charity, I would suggest asking questions. Do you have information, documentation? If you don’t need to give right away, take your time, and say I find this interesting, but I’ll do my research and decide if that’s where I want to give. If it’s a well-known organization and you like what they are doing, then feel free to donate. But if you have any questions or feel that the answers are not not straightforward, then I would suggest that’s not the time to give. Take your time and do your research: like any other investment, decide where you want to give. But the first question of course is, ‘I want to see your registration with the Canada Revenue Agency.’