Transparency Matters in Canada's Charity Sector
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
Financial transparency of Charity Intelligence's Major 100 Index currently stands at 91%: 90 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.
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).
With Beth Oloth revoked, World Wildlife Fund joins Charity Intelligence's Major 100 Index. This improves the financial transparency of Canada's Major 100 Index of charities.
While the majority of Major 100 charities are financially transparent, five 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
Financial Transparency of Canada's Major 100 Charities
The practice of Canada's largest charities in posting and providing donors with financial statements. As of February 2019 - status is subject to change
Today's 92% 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 in January 2019 also raises the issue of having audited financial statements. Beth Oloth was one of Canada's largest charities, receiving $54.9 million in donations. Yet it did not have audited financial statements. Canada's Charities Directorate recommends that charities with more than $250,000 in donations have audited financial statements. Despite its huge size, Beth Oloth was not required to have audited financial statements. This needs to change. Any registered Canadian charity with more than $1 million in donations should be required to have its finances independently audited.
Know your donor rights. What donors can do to improve transparency in Canada's charity sector February 2019
Charity Intelligence's submission to Treasury Board review of regulations August 2021
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
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The information in this report was prepared by Charity Intelligence Canada and its independent analysts from publicly-available information. Charity Intelligence and its analysts have made endeavours to ensure that the data in this report is accurate and complete but accepts no liability.
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