The Charity Report With Gail Picco

With the world slowed down because of the pandemic, the charity sector has been shedding light on a lot of issues, with tons of fundraising being held here and there. Though these are typically conducted with an admirable purpose, the conflict regarding disbarment quota seems to be neglected by the government. Douglas Nelson talks with Gail Picco to share her discoveries regarding this matter as the Editor-In-Chief of The Charity Report, which was launched only last 2020. Celebrating their first anniversary, she talks about the possible law amendments that could be done to address its financial structure problems and her realizations on working on charitable events first-hand. Gail also talks about her advocacy on raising proper awareness regarding supporting charities, which must not simply die out with the trends. 

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The Charity Report With Gail Picco

We have a very special guest, Gail Picco. She’s the Editor-In-Chief of The Charity Report, a much reviewed necessary resource in the social profit sector. I’m thrilled to have her here. Welcome, Gail. 

Thank you very much. I’m thrilled to be here. 

One of the reasons we’re interested in having you on the show is because we wanted to be a part of a very special day that The Charity Report is having. It’s your first birthday. It was launched on March 18th of 2020. It was a great timing. What’s the first year been like? 

First of all, I can hardly explain the way I feel about having one year under our belt. I didn’t think it crept up quickly and then we did an entire year of publishing news stories, features and photo essays. We did it two days after the prime minister declared a lockdown. The pandemic is still going on. While anybody in their right mind would want to launch a new initiative into a healthy economy, it gave us an important responsibility in terms of bearing witness to what was happening in the charity sector during this very unusual time. 

Even before March 18th, I’m interested in the genesis of The Charity Report. How did you come to the idea? What was the piece you were looking to add to the social profit sector? 

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I was looking to add other messages besides the fundraising messages. What people understand about the charity sector is mostly what they understand through the fundraising that the charity sector does and the messaging developed for fundraising. That’s where the communication’s money goes. That’s how people in the charity sector, by and large, communicate. It’s with their donors. In the past years, the size of the charity sector has almost doubled. There are $260 billion controlled by the boards of directors of the organizations, some of whom have no experience and some of whom have a lot of experience. I thought the time had come for necessary observation of the financial structures that buoy up the charity sector, and whether it was being effective in dealing with the problems that it wanted to address. 

Was there one issue in particular that you were most keen to dig into as you started The Charity Report? 

We decided from the very beginning that we wanted to look at the sector through an equity lens. What was of the biggest concern, and I’m not the first person to say this. Barack Obama, Pope Francis and many other world leaders said it. Their biggest worry about society now is the gap between the rich and the poor, and the increasing inequity, which we’ve only seen grow even greater during the pandemic. I wanted to put that equity lens on the charitable sector. There is a situation where 95% of the wealth in the sector belongs to 1% to 5% of charities. 

Those charities are getting 90% to 95% of the revenue from 1% to 5% of their donors. It goes all the way up or the turtles go all the way down. 

I thought that was an inside joke in our family, but I know that too.  

You said an interesting intersection within the charitable sector. You are asking questions that need to be asked with that equity lens. You’re often shining a light on issues of importance that may not otherwise get or gain traction. One of the things I’ve appreciated about the work you’ve done in 2020 is that you do avoid the “gotcha headlines” that can sometimes be the hallmark of reporting and research on our sector. I’m curious to better understand how you approach the work of The Charity Report and how you approach the role that you’re serving in the sector.

The closest that I could compare it to is a business reporter reporting on the business sector. We are interested in the issues of the sector as business reporters are interested in the auto sector, manufacturing sector or IT sector. We’re interested in those issues of poverty, equity, racism and so on. We’re interested in the issues, but we’re interested in how the structure of the charity sector because it’s defined by legislation. There are definite parameters around how that sector operates. How effective is it in dealing with the most intransigent problems of our time? When we look at what stories to pick, that’s our lone star. 

Before we started the interview, you said that it was interesting what the sector says they’re interested in and what they read. I’m curious to hear from you, what were the most-read stories that The Charity Report put out in 2020? 

I’m glad you asked that question. It’s fun to talk about it because you would guess this in one go if I asked you to, but I won’t make you guess. It’s 2 of the top 3 stories, the WE Charity stories. To this day, we did three stories about WE. If we had wanted to do a story about WE every day, we would have had people clicking on it. There was a lot of coverage happening about WE. I thought that we could do a summary and bring in how the issues that we could see unfolding in public view that were being faced by WE are also faced by a lot of other charities. They’re not alone in what was happening. The second most-read story was the headline, Poll Reveals Vast Majority of Canadians Find Foundation Giving Practices Unacceptable. We did not commission the poll, but the poll was brought to us. We’ve done partnerships with the same firm that did the poll. The issue of the disbursement quota was explained to the people who were responding to the poll. What they were responding to was the level of the disbursement quota. There was some interest in that as well. 

I’m curious what the response was from people who are more than casually familiar with disbursement quota and how they reacted to that poll. 

Some people said, “How do you expect people who don’t know anything about the charity sector to know what a disbursement quota is?” They dismissed the poll in its entirety, but then you have many people in the sector who are very concerned about the disbursement quota, including Senator Ratna Omidvar. We did a big story on this, Andrew Chunilall, CEO of the Community Foundations of Canada, John Howard. There are a number of people who were very concerned about the 3.5% disbursement quota, especially within private foundations in Canada. They’re sitting now on $60 billion that could be loosened up to help with equity issues like racism and economic inequity, and they’re not.  

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They probably won’t until the regulations are changed because they’ll do whatever the regulations suggest. They’ll sit around at a board table and go, “That’s what we’re supposed to do, 3.5%,” and they’ll do 3.5%. Remember, that’s money that’s been $0.50 on the dollar that’s been credited by Canadian taxpayers. You might know Bill Young of Social Capital Partners. His argument is that, “All of the money or none of the money that a foundation invests, is it necessary to invest in the social capital enterprise? They don’t have to pay any tax on their investment revenue, but they don’t have to invest in anything that makes society better.” He believes that a lot of regulation needs to change around private foundations. 

I did my Master’s degree looking at the role of private foundations and the development of the social sciences at the beginning of the twentieth century. It’s as exciting as it sounds. The issues around disbursement quotas of what private foundations are able to invest in have existed in the United States and Canada since the inception of private foundations. As someone who’s been in the sector who paid a lot of attention, it strikes me that this is a regulatory issue which ultimately means it’s quite fixable. It’s not easy, there’s not a magic wand, but there are ways to get there. What’s stopping that from happening? 

I asked that same question to a range of people who have started to campaign on this. The private foundations were able to lobby the Federal Government to lower the disbursement quota. With the dot-com bust, 24, 25, they had a couple of bad years. They went to the Federal Government and said, “We need some relief or we’re going to have to dig into our capital. Let’s reduce this to 3.5%.” It was agreed. I had CRA dig up the budget documents that were very helpful, and how it was introduced in a budget document. It is a regulatory thing. It could be increased with the sign of a pen with a minister.  

I’m not sure why they haven’t done it. I don’t think how the charity sector functions generally is well understood outside the sector or maybe even in the sector by many people. You probably find this too if you’re talking to lots of people. I’m not sure that the people in government are fully cognizant of all aspects of the sector, and most of the lobby groups associated with the sector. Imagine Canada being one that has not focused on disbursement quota but has focused on more generous tax consideration for people who make donations. That’s been more of their government relations plan. 

Maybe this is next? 

It has to be next there because there’s no reason for it. There’s no reason why these foundations should be existing in perpetuity where the credit that one generation of taxpayers gives individuals should never be paid back, not even to that generation, their children or their grandchildren. The tax benefit is soaked up by people who already have the wealth. It doesn’t trickle back into the Canadian charity economy in a strong enough way for it to make any difference. The percentage of private foundations giving it in terms of all of philanthropy is less than 10%. 

DSP 10 Gail Picco | Charity Sector
Charity Sector: Imagine Canada focusing less on disbursement quota but more on generous tax consideration for people who make donations.

 

I’d be interested in your perspective on the view that I’ve heard expressed a number of times. One of the reasons why the issues around disbursement and the role of private family foundations, in particular, isn’t discussed in the sectors is because there are organizations that are dependent on, or those organizations for some of their support, or in hopes of one day being the recipient of support from those organizations. They’re being critical of the potential funder or current funder. It’s such a power imbalance that it’s going to be very difficult for the sector to step outside of itself and advocate for something different. 

There is that fear of not being funded. The organizers of the increase-the-quota campaign have seen that and talked to people who supported the campaign, but there were many people who won’t go on the record with it. There’s that, which I don’t understand that at all. I’m like, “Where’s any courage or any ability to be able to stand up and do the right thing?” I don’t get that in particular. People don’t like going against powerful interests. It’s not necessarily the foundations. We’re only talking about twenty foundations. Like everything else, 90% of the revenue in private foundations is in the top twenty foundations. Ninety-five is in the top one which is the Mastercard Foundation which has assets of about $40 billion on its own. It’s odd that people don’t advocate for it stronger. 

The other issue aside from that power imbalance is that you also said, “Do the right thing.” I worked with lots of organizations, where doing the right thing is interpreted and understood to be direct activity and service to the organization’s mission. Sector-wide issues are perceived as being a distraction. If we’re paying attention to this, we’re not paying attention to supportive housing, food bank, university research or whatever the organization exists to serve. To me, that’s a decision and a discussion that needs to happen more around board tables around organizations about, “What does being in service to our mission mean? Are we thinking broadly and expansively enough when we consider what our strategic plan or what our priorities are going to be?” 

I got into this area of work as a young woman, working in a shelter for battered women in downtown Toronto. I’m from Newfoundland originally. I came to Toronto like many of my compatriots, seeking a better life. I’ve had a couple of jobs, but then I started as a volunteer at the shelter. Before long, I was a reliever staff and then I became a full-staff member. I’ve worked there for eight years as a counselor. We didn’t get any government funding. We had to learn how to fundraise. We heard that if you mailed 5,000 letters, as it was in those days to people, you could get a break on the postage. I got involved with direct mail. One of our board members was going out with a guy who was on the Pollution Probe board. Anyway, we got lists to mail. 

When it came time for a letter to go in the mail, I would go to a resident and say, “Cynthia, we’re going to be looking for support for the shelter. We’d like to talk about your story. First of all, would you like to tell your story anonymously? Where did you come from? What has the shelter meant for you? What would you have done without the shelter? How are the kids doing? What are your plans?” I would sit down and write whatever Cynthia told me and fix it up. We’d make that into a letter with a coupon, BRE and so on. The money just rolled in. In those days, the direct mail market wasn’t as competitive. I learned very early that if you can go out in the marketplace with an idea that is authentic and close to the people that you serve, we would put in the letter. This is not Cynthia’s fault. This is the patriarchy.  

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Women are oppressed and this is why they’re oppressed. People gave us a lot of money in order to do that. I think about fundraising and the fundraising sector, the women who I met and had the honor to intimately get to know because you are immediately put in an intimate situation. I still have some of their letters. I had a Christmas decoration that a little girl freely gave me. It says my name on one side and her name on the other. That was flour and water. I still have that many years later. It goes on my tree every year. She’s a Facebook friend. Of course, she’s well into her adulthood. Those are the people that I try to think of when I think of why I’m doing what I’m doing, why it’s important to keep people on their toes, and where I get my courage from.  

If they got the courage to leave an abusive spouse with 2 or 3 children in tow, not knowing what their future was going to be like, then I sure as hell have to have the courage to ask the head of the McConnell Foundation why aren’t they spending more money on racial justice. They’re going to have an answer. It’s not a disrespectful question. It’s a question that I’m looking for an answer to. When people talk about having or not having courage, they need to understand what courage means first and who in their lives have they seen expressed courage and try to guide their lives in that way. 

Thank you for sharing that story. Defining that role of courage in the sector, I think it’s a big word with a broad definition, but very specifically applied in individual circumstances and individual organizations. It is a hallmark of the sector in a lot of ways and the courage to say that we haven’t got it all right. We haven’t solved a lot of these big issues and we need to be doing more. One of my favorite questions to ask CEOs when we have them on the show is what drives them crazy about the sector and the work that they do. I’m going to ask you, what drives you crazy about the sector? 

I don’t even know where to begin. You can go to The Charity Report website and see some of the things that drive me crazy. I’ll answer in a personal way. The thing that worries me the most about doing what I’m doing and continuing to do what I do is that the work of The Charity Report and my work will be dismissed. For whatever reason, somebody might dismiss that poll on the disbursement quota. It is not seen as having a serious weight behind it. It goes beyond what drives me crazy. It’s what gnaws at me. The work that I do and the work that we do, there are other people writing for The Charity Report, that it will be brushed aside as being irrelevant, either because Picco has been saying this for so long and nobody listens to her anymore. Being dismissed is the thing that gives me the most regular concern. 

You’re coming up on your one-year anniversary of The Charity Report. Certainly, it is a source that people look to for, “I know what I need to do now, but what should I be paying attention to in the world beyond my to-do list?” You’ve done a very good job of creating a space for people to think critically about the sector and ultimately to improve the work that we all do on a day-to-day basis. 

DSP 10 Gail Picco | Charity Sector
Charity Sector: The percentage of private foundations giving it in terms of all of philanthropy is less than 10%.

 

That means a lot to me to hear that, Doug. 

As we come to the end of our conversation, I’m curious what advice you would give to someone as we’re waking up from the pandemic. Let’s assume it all rolls out smoothly and we open up again. What advice would you give to an executive director or a CEO of a charitable organization to capture the learning of what we’ve had in 2020? 

The first thing is, if I was running it, that employees need less to do rather than more to do. There needs to be more of them to do it. Going forward, right this first day, the number one task is to build in the humanity of your workplace. That is treating your employees like you would like to be treated, looking around and seeing how many black, indigenous people of color are employed by your organization. If there are not very many, try to figure out why that would be. Think internally about how you are making your decisions as opposed to just externally about what could be wrong with your organization. The number one job is to think about the humanity of the people who you’re employing in addition to the humanity of the people who you’re supposed to be serving. Look inward as much as you’re looking outward to determine the reasons why you’re making the decisions you’re making. Thirdly, act on your own humanity and the humanity of your employees and the people you serve. 

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That’s great advice. We’ve had conversations with lots of CEOs about what’s next for the sector. It’s true that a lot of leaders have not followed the first rule of airline passenger ships, which is to put your own mask on first before trying to help others. We hear the changing expectations of leaders. Many leaders that we’ve spoken with have changed their expectations of themselves. They’ve risen and they need to be the chief-rallier of the team, working with the board, mission and the operations of the organization and pushing that forward. 

For most of the leaders we’ve talked to, the expectations of their teams have gone down. Their expectations of themselves are up. The expectations of their teams are down which is noble in a way, or it is noble as an instinct. It’s concerning from my perspective because it creates a gap between leadership and the rest of the organization, which is hard on leaders. It’s going to be harder on the rest of the organization that there aren’t enough of them. You said we need more people doing this work and your advice gets lost, “If you’re expecting less of your team, you’re not thinking we need more people.” It’s going to be harder to do that. 

My biggest concern for the sector is two things. One, we’re going to take a deep breath and say, “We’re back to normal,” stop talking about all these big issues, go back to having five board meetings a year and hearing from the audit committee and we’re fine. The second one is there will be a moment of exhaustion beyond exaggeration, where leaders are not going to be able to come back and be effective for themselves as human beings but certainly for their organizations. When we started the conversation, you were talking about a three-day conference. One of the phrases that came into that, and I’ll ask if you could share that, is how we could imagine a different sector. 

DSP 10 Gail Picco | Charity Sector
Charity Sector: 90% of the revenue in private foundations is in the top twenty foundations.

 

The conference is the party at the end of the patriarchy conference and how we would imagine. One of the points of the conference was to let your imagination go in terms of what you think should happen. Many of our world’s problems, the 9/11, the insurrection at the US Capitol or even the pandemic were a failure of imagination that people couldn’t foresee what was going on. Let it not be the next step when people get back to work. Let it not be a failure of imagination that prevents us from being the best that we can possibly be including the well-being of people, and the important work that has to be done to talk less about the sector as a financial product in a range of financial product, and to talk more about humanity, wellness, health, women and children. It’s important that we let our imaginations go to think about how it can be much better. 

I talk to an average of about 20 to 25 people a week. They’re not all CEOs. That would be right over the top. A lot of them are doing all types of jobs. Some have no jobs whatsoever. One woman told me that she’s been so glued to her computer since she’s been working from home. She has contracted two bladder infections in 2020, even though the bathroom is across the hall from her house because the demands of her job have gotten so strong. Other people were telling me that the charity sector, especially organizations that don’t have a ton of money but have already downloaded workers in the charity sector, are often subsidizing either through lower salaries, no professional development or whatever the work of the charity. 

What these workers were afraid of is that the convenience and the in-expense of working at home are now going to be downloaded on the workers in charities. Charities will try to save money. They have been able to by having virtual offices. They will now be able to do that because it’s all set up to continue to have their people, their employees working at home. A large number of the people in varying positions in the charity sector who I’ve talked to do feel that that is a further downloading of responsibilities onto each individual staff member. There’s a lot going on depending on the perspective. It’s important to include that all when we try to imagine the future. 

Gail, thank you so much for what you do. If leaders and readers of this show are looking for ideas about how to maintain that creativity and keep the light on those issues that matter, they can find more at TheCharityReport.com. Thank you so much for being a part of the show. 

Thank you for having me. 

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About Gail Picco

DSP 10 Gail Picco | Charity SectorGail Picco is currently editor in chief of The Charity Report, and publisher and editorial director of her own imprint Gail K. Picco Books with Civil Sector Press. She has had a 25-year career as a fundraising and communications consultant, most of it running her own firm Gail Picco Associates. Prior to becoming a consultant, she spent eight years as a counselor at Interval House, North America’s first shelter for abused women. Her most recent book Cap in Hand was published in 2017, and her upcoming book about the gap between charity and justice will be published in spring 2022.

 

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