Given recent headlines about the Pierre Elliott Trudeau Foundation, more and more Canadians are now familiar with the term “charitable foundation”. However, few people know what these foundations do. Indeed, Canada’s 10,000 foundations generally operate in the shadows, as essential partners of the country’s 76,000 other charities and non-profit organizations that work in social and community action.
Foundations are independent legal entities that operate solely for charitable purposes. Their typical operating model is to create endowment funds whose annual interest supports the charities of their partners and/or their own activities. As an integral part of civil society, foundations provide concrete and unique support to the ties that unite us as a democratic society.
Civil society encourages, informs and accomplishes the important work of businesses and governments to contribute to the dynamism and vitality of communities for a more prosperous, fairer and more sustainable society. This approach is based on independence to ensure an exclusive focus on the common good, free from any political, private or partisan interest.
This exercise of independence must be consistent with the law and the charitable purposes of the foundation. Canada’s 10,000 foundations make a myriad of decisions, from grant making to investments, that aim to bring our real country closer to the one we aspire to become. Pluralism, empathy and solidarity are not abstract values; they are the lived experiences of our social fabric.
Recently, however, the independence of philanthropy has been questioned. This questioning is normal and healthy. Public scrutiny is legally built in and welcome. In Canada, while foundations have a wide variety of origins and charitable objectives, they also remain public interest organizations, since the donations made to create them have received tax credits. Thus, foundations are required to undergo external audits and submit annual reports to the Canada Revenue Agency (CRA) in order to maintain public trust and legitimacy. In addition, foundations are increasingly transparent in explaining the impact of their work and engaging more with their partners to shape their priorities.
From issues as distinct as childcare and the climate crisis, to decent work and diabetes, Canada’s foundations are helping their partners tackle some of the most important issues of our time.
The strategic choices of each foundation, in terms of its governance, its priorities or its impact, are the subject of continuous learning and debate. Philanthropy is a human enterprise and always remains a work to be perfected. This is Philanthropic Foundations Canada’s raison d’être: to strengthen philanthropy — in all its diversity — in its quest for a just, equitable and sustainable world.
We need to ensure that tough and legitimate questions about foundations don’t lead to less philanthropy (and more resistance to risk-taking). Our country and the world need more generosity, a greater expression of solidarity, more ambitious pilot projects to meet the challenges they face, especially in areas where governments and markets are ill-equipped to provide solutions. Our country would be impoverished if the work of foundations dedicated to service, learning and community were to fail.
Our culture of sharing, of the relationships of trust that we have with each other — regardless of our origins — and the foundations must not become collateral damage of the great tension that democratic societies and institutions are currently experiencing all over the world. . I therefore invite you to learn more about the contribution of foundations and civil society to the common good and to participate in its growth and resilience.