Funding equitably
In the summer of 2022, the federal government quietly made some changes to the federal Income Tax Act that impact registered charities. The average Canadian probably didn’t notice it. However, they were changes that some charities and their supporters had long been advocating for.
Canada Revenue Agency has fairly strict guidelines for charities to ensure that they are using donations wisely and doing their due diligence. Charities who break these rules can lose their charitable status and their ability to offer tax receipts. Up until last summer, charitable organizations like United Way were limited to the kinds of organizations they could fund in the community. For our United Way, it meant that legally we could only fund other registered charities.
From an equity standpoint, it left United Ways and other similar charities unable to support incorporated nonprofits and Indigenous governing bodies, many of which represent or are led by marginalized and racialized communities.
Unfunded Report
Unfunded: Black communities overlooked by Canadian Philanthropy, is a report that looks at the systemic racism in Canadian philanthropy. Black-serving and Black-led organizations are widely underfunded due to systemic inequities, a poor understanding by funders of Black community leaders and needs, and a lack of awareness of the systemic barriers faced by their communities.
Black- and Indigenous-led organizations may also face barriers to becoming registered charities. This has historically made them ineligible for many funding opportunities. It’s a vicious circle: for organizations to grow and thrive they need funding, and yet funding opportunities are limited if an organization isn’t a registered charity. For this reason, changes in legislation are essential.
United Way Halifax has been tracking our funding to Black-led and Indigenous-led organizations, and we know we can do better. As an organization, we have a desire to fund more equitably, since we know these communities face additional barriers due to systemic racism. Having the ability to fund incorporated nonprofits and Indigenous governing bodies will allow us to make headway on this goal.
Making changes
Changing funding practices is not something that can happen overnight. There are legal and financial implications and changes to our due diligence practices. As a trusted organization receiving funds from donors and government, we need to report back on how funds are used.
When the Community Services Recovery Fund (CSRF) was announced in late November of 2022, the Canada Revenue Agency was circulating draft guidelines for funding “nonqualified donees”. Incorporated nonprofits and Indigenous governing bodies fell into this category. With support from a charity lawyer and draft guidelines, we committed to including these kinds of organizations in the funding process.
Building trust
We knew the CSRF would be an incredible opportunity for Black- and Indigenous-led organizations, but we didn’t have strong relationships with those communities. We wanted to do our best to build relationships with African Nova Scotian organizations so that they might have a more equitable opportunity to apply for funding through the CSRF.
To do this, we partnered with the Decade for Peoples of African Descent Nova Scotia, holding targeted information sessions in community and being prepared to answer lots of questions. We also created an African Nova Scotian volunteer review panel to make decisions on funding for African Nova Scotian organizations that applied for CSRF funding through United Way. Although it wasn’t perfect, we are hopeful our efforts improved the experience for those applicants.
Wildfire Recovery
When wildfires broke out in the Upper Tantallon area and in Shelburne and Barrington, United Way was prepared to play a role. Organizations of all shapes and sizes stepped up to help their neighbours. With experience from funding CSRF under our belt, we were able to quickly assess and disburse funds to organizations that have deep connections in their communities. Many of these organizations are volunteer-led, incorporated nonprofits—not registered charities—but because of the updates to the Income Tax Act, we were able to fund them. We were also pleased to be able to fund Acadia First Nation, allowing them to support immediate needs and even offer temporary accommodations while they rebuilt a home for a family.
Looking Ahead
In the future, we hope to have many more equitable funding opportunities that will allow for Black- and Indigenous-led community organizations to grow and thrive. We know that part of that will likely include more fundraising to specifically serve these communities. If you would like to learn more about how you can help, please get in touch. If you’d like to see the list of organizations funded in 2022-23 by United Way Halifax, read our annual report.
