The Senate is considering a bill that would require charities to report how many of their board members are women, racialized, Indigenous or disabled people.
Sen. Ratna Omidvar’s Bill S-279, the Registered Charity Board Diversity Data Collection Act, is currently at second reading in the Senate. If passed into law, the bill will require the Canada Revenue Agency to ask charities to report on the number of board members who are members of equity-seeking groups as defined by the Employment Equity Act. The list includes women, racialized, Indigenous and disabled people.
The question would be part of a charity’s annual filing with the agency. Charities are already required to report information about board members, including their contact information and how long they have been on the board.
The proposed amendment is very “simple,” Omidvar said in an interview earlier this month. Federally incorporated businesses are legally required to report to shareholders the diversity of boards of directors and senior managers. If the bill is passed, charities will be required to do the same.
The bill would not require boards to have a specific number of women, Indigenous, racialized or disabled people, says Omidvar. And a charity could not have its charitable status revoked because of a lack of diversity on its board, she says.
If the government “wants to treat [the charitable sector] with equal respect as the corporate sector, it will ask the charitable sector the same question,” said Omidvar, an Ontario senator and member of the Independent Senators Group.
There are 85,736 registered charities in Canada, according to the Canada Revenue Agency’s website.
“A board has incredible power in setting the agenda for an organization that is largely driven by charitable dollars,” said Omidvar. Boards need to reflect the Canadians they serve, she says.
Omidvar was the deputy chair of a Senate committee in 2018 and 2019 that studied ways to improve Canada’s charitable sector. In June 2019, the committee recommended the Canada Revenue Agency require charities to report on their board diversity. The government responded that it agreed with the recommendation and said it would consider it if the advisory committee on the charitable sector, an independent group co-chaired by the Canada Revenue Agency and the charitable sector, recommended it.
In its April 2021 report, the committee recommended the government create an advisory group to discuss ways to collect data about diversity that are accurate and do not result in harm. The report noted privacy concerns if the data was included in filings to the Canada Revenue Agency and suggested the law would need to be changed to make questions about board diversity mandatory.
More charities are already interested in increasing diversity within their organizations, says Mary Barroll, president of CharityVillage, a business that provides training and information for leaders of non-profits and charities.
It can be difficult to know how diverse charity boards are, says Barroll. In December 2020 and January 2021, Statistics Canada produced a crowdsourced voluntary survey of board members for charities and non-profits. Of the 8,835 people who responded, just more than 30 per cent said their organization has a written policy about increasing diversity on boards.
But surveys only provide a “snapshot,” said Barroll. A legal requirement for charities to report their board’s diversity would “allow us to understand better just how diverse the leadership is in charitable organizations across Canada,” she said.
Board diversity is not top-of-mind for people when they donate, said Kate Bahen, managing director of Charity Intelligence, a registered charity that provides Canadians with information about charities.
“The board of directors is critically important,” she said. Boards decide how to spend money, how to fundraise and who to hire or fire. Donors are concerned about boards doing a good job, she says. Donors want to know about all these things, she says.
But she has “never” had a donor ask her about the diversity of a charity’s board in her more than 17 years working at Charity Intelligence, she said.
“Diversity and being inclusive and not discriminating are really important Canadian values,” she said. “I think we need to take the good intentions of the bill and really ponder about what this is now going to put onto charities.”
Not all charities have the same resources to prepare their annual reports, she says. While many charities are large — such as hospitals and universities — some are much smaller, such as churches and local service clubs.
There is also no way to ensure forms are filled correctly, she says. It is not clear how, or if, charities could verify board members’ race, Indigenous status or disability.
Charity Intelligence examines charities’ audited financial statements and compares them with the information they send to the Canada Revenue Agency. Audited financial statements are more accurate than charities’ annual reports to the government, she says, noting that many charities make mistakes on their government filings.
Boards should choose board members for their abilities, not so they can “check the box” about race, gender or disability, she said.
Omidvar says the bill is intended to help collect information. The bill also requires a report be tabled to the government that says how many charities there are in Canada and how many of their board members belong to each desired group. The report to the government is not supposed to identify individual charities or which board members belong to which equity groups.
The bill does not require charities to make plans to increase board diversity. “I believe in time that will come,” she said. “I actually believe that the charitable sector has the vigour and the guts to do it on their own.”
Bill S-279 is currently at second reading in the Senate. Once it passes third reading there, it will move to the House of Commons.
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