The holiday season has arrived and with it, the usual lists of charity rankings. It has been a couple of years since Imagine Canada has written about these inevitable lists that attempt to rate the performance of one charity over another. We felt it was time to revisit the annual rankings this year as the global COVID-19 pandemic has ‘raised the stakes’ related to holiday giving.
With 40% of individual giving taking place during the last 6-8 weeks of the year, there is no way to understate the importance of the ‘season of giving’. And, in 2020, that usual surge of support is showing signs of weakness. A September Angus Reid Institute poll found that 37% of Canadians said that their giving has dropped since the start of the pandemic. In addition, a November Mackenzie Investments survey showed that 40% of respondents have had to lower the amount they planned to give to charity this year due to the financial impact of the COVID-19 pandemic. At the time of the year when charities need Canadians the most, there are warning signs.
Enter the rankings.
It is important to acknowledge that ratings and rankings are giving Canadians something they want - a fast and easy way to distinguish between the multitude of charities that request funds from them each year. We often hear from donors that want to know who they should give to. By looking at a top 10 list or searching for A+ scores, there is a sense that someone has played the role of adjudicator and assessed an organization’s performance.
Imagine Canada has consistently stated its concerns with the methodologies used in these rankings. For example, the 2019 Charity 100 published by MoneySense states that “The MoneySense Charity 100 assesses Canadian charities based on two major criteria: finances and transparency.” No mention of the impact of their programs. None. We simply don’t agree that any meaningful, credible assessment of organizations can take place in the absence of the very reason for their existence. This would be like rating automobile performance without mentioning gas mileage, engine performance or quality and reliability.
Others, like Charity Intelligence, have attempted to introduce the issue of impact into its ratings system. Accounting for 20% of the rating, the Social Impact Rating has been a progressive move aimed at introducing the very challenging task of comparing the impact of hundreds of programs against each other. While one can debate whether social return on investment is the sole, correct indicator of impact, we acknowledge that tacking the question of impact is a good step forward.
Recently, Charity Intelligence released its 2020 Top Impact Charities list. In its news release, Charity Intelligence made the following statement: “$17 billion was given to charities by Canadian donors last year and a significant portion of that is wasted, going to the wrong charities. Based on our work, up to 40 per cent of donations may be wasted by donors giving based solely on the reputation of the charity or by getting distracted by salaries or administrative costs.”
Imagine Canada strongly disagrees with the suggestion that $6.8 billion is being wasted and we are very concerned that, at a time when the sector needs the support of donors, suggesting that there are ‘wrong charities’ based on a particular methodology is not in the best interests of communities. The choice of language is very important in the presentation of information and, in our opinion, stating that there is rampant waste in the sector is both detrimental to sector organizations and damaging to the trust that Canadians have in our sector.
We continue to encourage transparency and disclosure in the charitable and nonprofit sector and agree that Canadians should have access to meaningful information to allow them to make informed choices. However, we are concerned that the rating of charities does not provide complete and contextual information, and we believe that these ‘top charity lists’ have limitations that can, unfortunately, paint an incomplete picture of the amazing work done by sector organizations.