Update: Bill S-216 has now been passed “in essence” via Bill C-19, the Budget Implementation Act. Bill C-19 included measures that changed the “direction and control” requirements that regulate charities who work with non-charities. 

According to Senator Ratna Omidvar, sponsor of Bill S-216, “These are big and important changes. They provide a path to get rid of the deeply embedded form of systemic racism that was contained in the Income Tax Act. In its place will be strong, accountable and effective partnerships based on mutual respect.”  

In our recent CharityVillage Connects podcast episode, How Bill S-216 Could Transform the Nonprofit Sector Forever, we explored the potential ramifications of Bill S-216, otherwise known as the Effective and Accountable Charities Act. 

Sponsored by Senator Ratna Omidvar, the Bill sought to amend the Income Tax Act to allow charities to more effectively collaborate with a wider range of organizations – including those without charitable status, or what the Act refers to as “non-qualified donees”.  Proponents of the Bill said the amendments were necessary to get rid of burdensome and expensive red tape and outdated legal bureaucracy. But the key shift proposed by Bill S-216 is much more aspirational: to eliminate the deeply rooted and historic paternalism that many see embedded in the current rules about how charities can operate.  

Listen to the full CharityVillage Connects episode

This excerpt from the podcast features two Indigenous leaders, Bill Mintram and Kris Archie, who weigh in on why there was a need to change the rules on how charities can work with non-qualified donees and how the new legislation will impact Indigenous communities and organizations.  

Bill Mintram, Métis from Saskatchewan, is the Director of Indigenous and Northern Relations for the Rideau Hall Foundation, where he assists organizations and institutions in strengthening their relationships with Indigenous peoples and communities while responding to the Truth and Reconciliation Commission Calls to Action. Part of Bill’s role is to oversee the funding agreements between the Foundation and the Indigenous organizations it works with. We asked him about his own experiences navigating the current system as it relates to funding nonprofits and Indigenous organizations without charitable status. 

Bill: Well, I can tell you, as an example, providing funding as a non-Indigenous organization to a non-qualified donee, who are Indigenous recipients…the current way that we have to go about providing that funding is, in my perspective, a bit awkward. I feel like I’m being disrespectful because I have to create agreements that essentially outline that I am going to provide funds from a non-Indigenous organization to an Indigenous organization, and I’m going tell them that their use of these funds is only…on behalf of my organization and my charitable objects, not their mission and mandate, not their ability to be self-determining and to be able to impact their communities in a meaningful way. 

I have to communicate to them in an agreement that they’re working on behalf of a non-Indigenous entity and everything they do is for the purposes of that non-indigenous entity and that, frankly, is not showing respect. 

Bill also expressed his concerns with the disconnect between reconciliatory intentions and the actual language written into agreements between charities and Indigenous groups. 

Bill: If I were to take a project agreement for providing funding to a non-qualified donee who’s an Indigenous recipient, and I were to try and tell them that we want to work with you in a reconciliatory manner, we want to work with you in a relationship-driven manner, we believe in you, we trust in you, but yet…the words I’m putting on paper and asking them to sign off on don’t demonstrate that trust. They don’t demonstrate that ability for autonomy, that ability self-determination, and that is the opposite of the direction that we should be heading as a nation. And so, Bill S-216 does address some of those areas to be able to still maintain those accountability measures while being able to enter into a much more respectful relationship with those who are doing amazing work for the public.  

Much of the discussion around Bill S-216 focuses on phrases like “direction and control” in the current Income Tax Act. This refers to the requirement for nonprofits to act as if the charitable activities they are funding through a third-party organization were their own. We asked Kris Archie, Chief Executive Officer of The Circle on Philanthropy and Aboriginal Peoples in Canada, if language like this was part of the problem. 

Kris: I would say yes and no. So, this conversation about Bill S-216 is much larger than direction and control. That being said, the specific language of direction and control and the way in which it has to be enacted is very paternalistic. And largely I think could be done in ways that are more helpful, not only to the charitable organization that’s serving as the intermediary to flow funds through to a non-qualified donee or a non-charitable organization… 

But I think that the other piece that just needs to be said is that organizations all across this country are already doing this. They’re already in relationships, in partnerships, whereby they are supposed to have a level of oversight and control and to direct the activities of organizations that they’re flowing funding through too. 

And for all kinds of reasons, that is not unreasonable or not possible because of the lack of cultural context or because the very specific nature of the work that an organization is doing, that an intermediary could never do on its own, would just make that a relationship that’s fraught with a lot of difficulties. Now doing away with that language, I think, doesn’t just magically make everything better, but it does invite a different kind of a conversation about what does partnership mean when an organization’s choosing to support, as an intermediary, an Indigenous organization. I think that it provides Indigenous organizations with a little bit more ownership over the work that they’re doing. They can say things like I’m not going to allow you to take photos from our programming and to share it with your donors to gain donor dollars. 

Listen to the podcast episode!

But is Bill S-216, now passed “in essence” as Bill C-19, enough to create real change in how charities collaborate with Indigenous organizations and communities? Check out the full podcast episode for more comments from Bill and Kris around this important issue.