Think Philanthropically

The non-profit sector is an economic driver, contributing over 192 billion dollars to Canada’s GDP.

Is it scandalous that a few non-profit executives appear to be overpaid?  Probably.  But there is a bigger scandal that very few journalists write about. The real scandal is that the non-profit sector is typically forced to pay starvation wages to its fulltime employees because most non-profit organizations exist in a cycle of financial precariousness.

The non-profit sector is an economic driver, contributing over 192 billion dollars to Canada’s GDP.  It employs 2.4 million people, far more workers than the energy or transportation sectors.  Yet there is a persistent expectation that workers in the non-profit sector should expect to make significant financial sacrifices for the privilege of delivering services that are essential. There is also a prevailing assumption that leading a sizable non-profit is something anyone can do. The truth is that frontline non-profit work is often challenging and draining. It is best done by highly skilled and well-trained people. Leading any major non-profit organization is every bit as demanding as leading a sizable business.

The real scandal isn’t that a few non-profit executives are overpaid. A few of them are. The phenomenon of overpaid executives is far more common in the corporate world. Frankly, it should be considered shameful if any executive receives compensation that is 40 or 50 times larger than the lowest paid worker in their organization. The problem is that many people don’t recognize that non-profit work is as valuable as for-profit work. We expect that non-profit work should be undertaken on the cheap. In order to do that, the people who work in non-profits are expected to be incredibly dedicated people who are prepared to accept very low wages.

Recently, the Canadian Press published a story that was further amplified in a French language report in La Presse. The article identified a small number of Canadian non-profits that had executive salaries they judged to be excessive. The CP article focused on the leaders of environmental advocacy groups but La Presse targeted a few larger Quebec based non-profits with a salacious headline that suggested that leaders of charities that serve the disadvantaged are being paid excessively.

I am a supporter of good investigative journalism. The existence of the free press is a pillar of our democracy. In recent years the echo chambers of social media and a variety of alternative information channels have emerged and we have all experienced the proliferation of “fake news” along with opinion pieces that pass for legitimate journalism. Professional journalists need to avoid being caught up trying to copy the tactics of those who produce poorly researched stories or click bait. The sort of reporting that was the basis for the CP story should become a case study for how not to produce a credible piece of investigative journalism.

Investigative reporting often begins with a premise, a leak, or a piece of suspicious information. The best reporters then proceed to question all prevailing assumptions and seek out multiple sources to confirm information. In this case, the research that led to the articles was superficial at best because it parroted publically available data from the Canada Revenue Agency website. This sort of data can produce a hypothesis but it requires an actual understanding of the inner workings of each charitable organization before any conclusion can be reached.

“There is a persistent expectation that workers in the non-profit sector should expect to make significant financial sacrifices for the privilege of delivering services that are essential.”

It is important for the non-profit sector to be open to scrutiny. It is equally important that the scrutiny be grounded in comprehensive research coupled with a grasp of the nuances of the various aspects of a very diverse sector. If any reporter is looking for a real scandal, well, I’ve just given them a great tip for some investigative journalism in the opening paragraph of this column!

Sam Watts serves as the CEO of Welcome Hall Mission  www.welcomehallmission.com  He serves on several non-profit boards and is an appointed member of the National Housing Council of Canada.  He is the author of Good Work…Done Better www.goodworkdonebetter.com