Yes You (Foundations) Can!....Make Better Public Policy

Hilary Pearson

It’s federal election season in Canada.  Surely a time to consider public policy and its importance to the work of philanthropy. But public policy decisions and programs can have a profound impact on philanthropic goals. The decisions made by policy makers matter very much if you are designing any philanthropic strategy. Think of reducing poverty, improving education, preventing illness or fighting climate change. Can you imagine not thinking about how public policies matter? So, can foundations involve themselves in the policy process? In my view, not only can they but, where possible, they should, if their purpose is to create public benefit.

For many foundations, engaging in public policy work seems totally outside of their purpose. Most Canadian foundations describe themselves as arms-length funders of other charities. Yet foundations play many roles. They convene dialogues, bring together issue experts, commission original work and operate their own programs. While many foundations don’t choose to speak out themselves, they strengthen the voices of others, or create spaces for dialogue and the expression of views. Going beyond this, some foundations use their own voice to highlight issues in the public space. All of this activity can contribute to better public policy. 

Even if foundations are reluctant to advocate directly for a policy position or action, they need to pay attention if their mission involves changing the systems that make our society less equal or less inclusive. In a sense, as charities they are compelled to do so. Dr Roger Gibbins, a former Senior Fellow of the Max Bell Foundation, has put it well: “The very concept of a charity carries with it an obligation for policy advocacy that sets charities apart from the private and more broadly defined nonprofit sectors. In short, charitable status confers a privileged position that comes at a price: that charities necessarily assume a moral obligation to pursue the public good.”

Through their funding and work, Canadian foundations have indeed contributed directly to many important public policy changes of the last two decades: the Canada Child Tax Benefit, the Registered Disability Savings Plan, the Portable Housing Benefit, the Ontario Greenbelt, Community Benefits Agreement, the Great Bear Rainforest (Forest Protection) Act and others. They are funding public policy training for charities, supporting policy think tanks, running social policy labs, funding municipal governments, writing open letters and commissioning polls. 

All of this is absolutely legitimate charitable activity, if it is related to the charitable purposes of the foundation.  Since the 2019 federal rule changes that took the word “political” out of the description of charitable activities under the Income Tax Act, foundations have a clear green light to engage in what the government now calls “public policy dialogue and development” activities. A new guide Funders Making Change: Engaging in Public Policy from Philanthropic Foundations Canada makes the case for why and how funders can engage in public policy work, even if they may not have thought of it as philanthropy. The guide describes the federal rule changes. Even better, it tells stories about the actions of funders in a wide range of policy areas, making their engagement and impact much more vivid. 

We face some big and potentially wrenching social and economic challenges in Canada. This is a crucial moment for philanthropy to get involved in policy dialogue and development. This work is a lever for systemic change that can have enormous positive impacts. It is possible and arguably it’s necessary for more foundations to engage. The field of action that is permitted under the law is broad, as long as it serves a charitable purpose. And the public benefit created by foundation engagement in policy work is invaluable.

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