Transparency matters

Transparency builds trust, and trust is the foundation of giving. Charity Intelligence measures transparency objectively by whether a charity posts its audited financial statements on its website. Yes, transparency should be more than posting a pdf. Yet, this simple step alone can show donors not only how money is spent, but also so much about a charity’s culture towards openness and respect for its donors. The Toronto Star went further, stating that financial transparency is a charity’s ethical obligation:

“Charities reaping billions of dollars each year from well-meaning Canadians aren’t legally bound to make public their full audited financial statements. But, surely, they have an ethical obligation to do so. Transparency should be paramount when capitalizing on other people’s generosity.”

Toronto Star Editorial, November 11, 2011

 With Beth Oloth out, World Wildlife Fund joins Charity Intelligence’s Major 100 Index.

To recap, Charity Intelligence’s Major 100 index is a list of Canada’s largest 100 charities measured by donations and support from fundraising and special events. The Major 100 Index represents the elite 0.1% of Canada’s 86,000+ registered charities. Together, Canada’s Major 100 charities received $6.2 billion in donations in their most recent reported year. This is approximately 38% of total Canadian giving (assuming total Canadian annual giving is $16 billion).

Financial transparency of Charity Intelligence’s Major 100 Index currently stands at 91%: 89 charities met “best practices” and are financially transparent with many years’ financial statements posted on the charity’s website, and two charities post only the most recent year’s financial statements.

In contrast, six charities require donors to request the financial statements. Three charities have outright refused Charity Intelligence’s requests to receive financial statements.

“Charities should include a minimum of three years of annual reports and audited financial statements online”

Saltiro and Legresley, Best Practices in Charity Annual Reporting, Queen’s University, 2013

NOT FINANCIALLY TRANSPARENT 9%

FINANCIALLY TRANSPARENT 91%

Only available through request for information with Charities Directorate

Only available when requested

Most recent financial statements posted

2+ years financial statements posted

X

X

P

P+

3

6

2

89

Archdiocese of Toronto Catholic $170 million

Watch Tower – Jehovah’s Witnesses $64 million

Kupas Hachesed Meoroth $21 million

 

Aga Khan Foundation $83 million

 United Israel Appeal of Canada $73 million

Federation CJA $47 million

Jewish Foundation of Greater Toronto $35 million

Save the Children Canada $22 million

Toronto International Film Festival $19 million

Jewish Community Foundation of Montreal $871 million

Pentecostal Assemblies of Canada $19 million

 

Most of the Major 100 charities are financially transparent

The 91% financial transparency is a good improvement from 2011 when financial transparency of the Major 100 Index stood at 81%. It is the last mile that so often takes the most effort.

“AFP Canada calls on the foundations to change their procedures and provide the appropriate documents when requested or make them publicly available on their website”

Association of Fundraising Professionals Canada, November 2, 2018

Beth Oloth’s revocation also raises the issue of having audited financial statements. The Charities Directorate recommends that charities with more than $250,000 in donations have audited financial statements. While reporting $59.4 million in donations, Beth Oloth was not required to have audited financial statements.

Read more:

Charity Intelligence's article on Beth Oloth's charity revocation in January 2019, the seventh of Canada's Major 100 charities to be revoked in eight years.

Gates of Mercy - curious connections found in Charities Directorate's investigation of Beth Oloth

What donors can do to improve transparency in Canada's charity sector

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