The social profit sector is the backbone of Canadian society. As its champion, Imagine Canada is committed to helping its leaders navigate the challenges and changes they face. In this episode, Bruce MacDonald, CEO of Imagine Canada, delves into the state of the social profit sector in Canada. With years of experience, Bruce discusses the challenges facing leaders in the sector and shares his unique perspective in the industry. He also offers advice on how to navigate these challenges and emphasizes the importance of adapting to the changing landscape. Bruce emphasizes that the end goal is finding innovative solutions that strengthen the sector and continue to make positive impacts in the community. Listen to learn more about the social profit sector’s current situation and how its leaders can guarantee that their organizations prosper in the future.
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Imagine Canada With CEO Bruce MacDonald
In this episode, we get to answer the question, what is Bruce MacDonald thinking about? Bruce MacDonald will joins us and he is the CEO of Imagine Canada. For the last several years, he has been an essential voice advocating on behalf of and understanding the social profit sector. Our conversation looks at where we have been, where we are now, and where we can go as a sector. He shares his optimism and hope for what we can accomplish together. Please enjoy my conversation with Bruce MacDonald.
Thanks very much. I’m delighted to be here.
The conversation is going to be fast-paced and hard-hitting. We like to say, “We don’t generate news here on the show.” Maybe we will change that. We will see how the conversation goes. Having the CEO of Imagine Canada on the show, we came up with lists of questions, but it is important to start with your perspective as the champion and the voice of the sector in many ways. What is your perspective on where the social profit sector is in Canada?
We look at ourselves as one of a chorus of voices. Part of our work is to expand that chorus and bring a plurality of voices together. At times, Imagine Canada may be a featured soloist, and other times, we are supporting other featured soloists who are better positioned to champion a particular issue. Part of our role is to make sure we are singing off at least a similar, if not the same song.
As we think of the sector writ large, I would say that it is still a challenging time for charities, nonprofits, and social entrepreneurs now on the lingering effects of the COVID-19 pandemic, prolonged inflation, high costs, and challenges to labor and talent. It is hard to attract and retain staff and see drop-offs in volunteerism. All of these things together continue to make it a particularly difficult time when we also keep in mind that more Canadians are coming to organizations for services than ever before. It is a bad math equation. We got increasing demand and decreasing supply of resources to meet that increasing demand.
It is true and something we see a lot of through our work here at the Discovery Group, with an organization feeling the effects of a falloff in volunteerism. They peaked in 2019 and 2020. Their volunteerism has fallen by more than 40% and it is not coming back. A lot of the conversation was around, “Is there a way the technology can fill the void of volunteers?” The answer is maybe, probably, but it won’t be quite as good or it is going to be different. What advice are you giving to leaders who are facing the pointy end of those challenges that are saying, “We need something to change. We need something to be different in that equation?”
When you say leaders, it is interesting because this is not about the staff people. This is all also about volunteer boards of directors. The thing that we are talking with organizations about is it may be time for deeper system-level type conversations with a bit more risk associated with them. Trying to tinker around the edges to address fundamental issues for the organizations may not get them there. It may need to be that organizations, depending on where they are at, the size of their community, the mission or cause area, and their own funding or revenue streams, might need to look deeper into fundamental reinventions as opposed to simply making tweaks or adaptations.
You are hinting at it a lot there. Let me see if I’ve got one of the hints. One of the challenges and trends we have heard a lot from anyone who has been paying attention to the sector over the last decade has been a constant prediction of organizations amalgamating, merging, and coming together. There was a great course around the potential for organizations to close, certainly at the outset of the pandemic. What has held that off as this has been a tsunami wave that we have been anticipating, and it has always been on the horizon, never closer to shore? What’s holding that off? Is that a good thing?
There are two points. One is that it is a bit closer to shore, certainly since about last spring of 2022. We started to note that there were more announcements of closures in the media. There is no database of bankruptcies for charities. It takes a long time. They generally cease to exist rather than formally close. Where they do close is picked up in the media. We do daily media monitoring. We have started to notice more and more organizations that are shutting down.
It is not at a material scale but to your question about why didn’t it happen before this, I would argue that public policy success allowed organizations to continue operating. That was the inclusion of charities and nonprofits in the main federal support programs. When you look at something like the wage subsidy alone, contributed or invested between $4.1 billion and $4.5 billion to register charities.
Organizations that were struggling during the pandemic were able to defer, in a sense, some of these more difficult conversations because of the infusion of federal dollars. What we are seeing is organizations that after those programs ended lost winter fundraising in 2022 because of Omicron and now a period of prolonged inflation and escalating costs are saying, “We have to be thinking differently.” Unfortunately, some are waiting until it is too late to have those conversations. Being an attractive merger acquisition, whatever new model might exist, shared service partner, it is less attractive for their dance partner to want to get on the floor with them.
If you are drowning, don’t grab onto somebody else who is drowning. That is one of the big challenges. One of the other things that we see across the sector, and I’m wondering from your perspective whether it is something you see as well, is that governments are investing more in service delivery through charities and the sector. There seems to be a bit of a flight to scale in terms of the government resources funding larger organizations to do bigger pieces of work, which is allowing those organizations to grow, do that work, and understand the complexity of the issues they are addressing and the programs they are delivering. The downstream effect is that for smaller or single-issue organizations, those funds that were available are no longer available.
The polling that we had done since the start of the pandemic and saw also reflected when provincial groups asked sector leaders about the impact was we did see this inequality in the sector. Sometimes it was around size and scale. Sometimes, it was around the perception of the urgency of their cause. During the early days of the pandemic, governments rallied to where they saw the most vulnerable citizens. Some were in relation to their business models.
For example, those who had a heavy reliance on earned income were also linked to place-based gatherings, they were selling tickets or gym memberships, both closed. They didn’t have the opportunity to offer a performance or an exercise facility. Therefore, their revenue streams dried up. There were a number of factors there, but we certainly did see, and you had heard early in the days of the pandemic, a K-shaped recovery, we called it a K-shaped impact. There were some that saw rising demand but some form of a corresponding increase in support but others that saw both support in demand drop.
The implications of that, as you know in research, that Imagine Canada has put out, the results of that is we are going to see over the next couple of years. It is not that we don’t know the full impact of this at this point.
No, we don’t, but if we are on the front edge of that getting closer to shore where organizations and communities are shutting down. In some of those communities, they may be the only game in town providing those services. That is what we need to be thinking about. How can we accelerate business model sustainability viability conversations to an earlier point? If the decision is that the organization or the institution won’t survive, how can we ensure that the programs and services survive in a different, new way and potentially more sustainable way?
There is a lot to be worried about and a lot of challenges in that. One of the reasons for optimism I see is focusing on what the services and the programs are delivered or the purpose work of these organizations. It is healthy for organizations to focus on your purpose and not yourself as individual institutions rather than viewing yourself as the essential intermediary you are active in pushing through on the programming and purpose side. What advice would you have for a board of directors that feels that tsunami is closer to them than they are comfortable with, and they are seeing the urgency around changing their business model, looking at amalgamation or unification?
Advice is a dangerous thing. What we have talked with boards and staff leaders about is asking important, potentially tough questions. The starting point is the investigation around how we are varying and how are the impacts of our program. What do our funding or revenue models look like? Are they sustainable? It is through the inquiry process that will allow organizations at their own pace and their own time to come to points of reflection where they say, “It no longer looks like the way it worked for X number of years in the past will be the same in the future.” It is that moment in time to have questions about, “What can we do differently to ensure that this vital or this important program and service remains in operation here in our communities?”
One of the most dangerous phrases we have heard around board tables considering those issues has been, “If we could go back…” Maybe if you could go back, that is not one of the cards in the deck for any organization we have seen. It is about putting the discussion around the future of the organization or programs and services through the lens of what it means to clients and the people who use those services that they are provided for rather than through the lens of the organization itself in some cases.
Mission-centered rather than institution-centered conversations.
We solve that. All we need to do is have the hard conversations. Our organizations are going to come to the right decisions on their own. I would imagine the diversity of organizations that Imagine Canada serves, you are hearing people at different stages of grief. They said, “This isn’t going to be relevant for us. We don’t want to pay attention to it.” How do you balance such complexity across your member of the organizations?
We see our role as a bit of a provocateur in terms of providing information and data knowledge and creating a place of invitation for organizations to find their place in that at the moment in time that works for them. I have spent most of my career working for provincial or national organizations. Long ago, I came to the conclusion that there is no solution for what ails our country. There are a multitude of solutions. Those that are the best are invented in their home and communities or their networks and their federations.
What we can hopefully help with is to ensure that leaders have access to the best available data. Some of which are externally oriented because we are often best caught up in our day-to-day world. Inviting the organizational leaders maybe take a step back and look at what is happening with the economy and the political realities. Look at the future of philanthropy and volunteerism and then be able to add in their unique perspectives from their community or organizations’ perspective to have those conversations.We often get just so caught up in our day-to-day world. We hardly invite the organizational leaders to take a step back, look at what's happening, and ask them to add in their unique perspectives. Click To Tweet
Imagine Canada does a good job of that. The audience and the year of government you had and the legislative successes the organization has been a part of and have led speak to the value of what Imagine Canada does. There are a couple of other questions about the sector that I hope you want to get to. One of the most challenging pieces we see when I’m standing working with the board of directors. I always cringe when they say, “I’m concerned because our cost per dollar raise should be and insert whatever number that should be.” Why has it been tough for our sector to change its narrative from cost to impact?
I have a particular view and I will say right off the bat, “This is my own personal view.” I believe that, to a certain degree, the cost of administration questions, fundraising costs, or cost to impact the focus on the cost of our sector, that horse left the barn several years ago. As a sector, we continually struggle to convince donors, funders, governments, and the media that they shouldn’t focus on it. It is almost a myth now. It is almost a deeply embedded and held perception that organizations should not spend money to deliver quality programs. For whatever reason, that is an element of our sector.
From our perspective, some of the things we are thinking about are, as we have examined the challenges around myth-busting, changing long-held perceptions, which is difficult or almost impossible, we have been looking to say, “Are there places in society where a fundamental reframing of the issue has taken place, not an attack on the myth, but an invitation to go to a new place of understanding?” That is where we are interested in exploring more. We don’t know what that new path might look like, but given that no matter how many times we talk about, “We shouldn’t focus on cost, we should focus on impact.” People still take us back to, “You are spending more than 15% on administration.” It says to me that that is going to be difficult to overcome.
How can we collectively work together to find a new attractive path to have a conversation about the value of those community services? This is a great time to be doing this because more Canadians have come into contact with these services since the start of the pandemic than ever before and figured this out together. I don’t know that we are going to overcome this long-held perception.
We lead with, “We are not-for-profit.” The response is not-for-profits shouldn’t spend money, which we know is not feasible or true. It is also the first rule of media training, which is if someone uses a phrase at you that you don’t want to use, you don’t use it back. I see us doing it to ourselves all the time. We lead with that cost per dollar raise shouldn’t be. Rather than, as you are suggesting, we should be focusing on impact and measuring the longitudinal effect of these organizations or our organization in our community.
We respond in the negative. We act defensively. Human psychologists would encourage people who are on the attack to attack more, not to go, “That is a good point. Let me leave you alone on that.” I’m hopeful that if we are able to move away from a scarcity mindset, our sector, to a more abundance-oriented mindset. We can change that conversation about what we will do, what we do, and what the potential is rather than apologizing for our mere existence in the first place, which that cost-per-dollar raise stuff gets us into.
It is important to note that that doesn’t mean we won’t be accountable for dollars. We will continue to be good stewards of both time and money. What we hope to do is shift that from being the dominant narrative about our sector.
One of the things we found that has been helpful in conversations with boards, who are fixed on it. For all the right reasons, they want to be good stewards of money. They want to be able to say to their colleagues or their friends that the organization they are on the board of has a low cost of administration, the separation between efficiency and effectiveness.
You can have zero cost of administration if you fire everybody and close the doors. That is not effective. Somewhere between that and the other extreme there, there is a happy medium that most organizations do a good job of hitting. It is the difference between effectiveness and efficiency. That is an important tool that leaders can use to change or shift the conversation, at least around their own board table.
Most people are reasonable, but most Canadians are busy. If they don’t have the time to think deeply about these things, they default to the easy-held belief, and that is what we have to get after and change.
Imagine Canada is leading the equity benchmarking study, and its results are going to be released here in the next little while. Can you tell us about the study and share any findings that may have surprised you and your colleagues?
We are participants in the equity benchmarking study along with about a dozen other organizations. We ended up being a research arm of it. It is holding a mirror up to the sector. This is building off some work that Senator Ratna Omidvar had led with the Federal government in looking at equity compositions of boards. It has gone much broader.
We have worked with this collective together to create a suite of questions and put that out in the field. We had over 1,600 organizations participate. What was great about this is normally, we are only able to pull and survey registered charities. We were able to leverage a network of provincial players and invite them to talk with their nonprofit partners because there is no national database of nonprofit organizations in Canada. Now we have the results.
We are going to invite leaders, staff, board members, and committee members to examine these findings and compare their own organizations and say, “Where are we on this spectrum of the diversity and inclusion journey or evolution or however you might like to characterize it?” Fundamentally, we are living in a society where our communities are changing. We are being shaped by immigration. We have newcomers coming to this country in greater numbers. How are organizations responding? Are they reflecting their communities at a programmatic level, at a policy level, at a staff level, at a board level, or at a practice level? That is what the results of the equity benchmarking study are going to tell us.Fundamentally, we are living in a society where our communities are changing. We are being shaped by immigration. Click To Tweet
It is fascinating to see how those questions are playing out in different parts of the sector in different parts of the country because it would be a surprise to none of our readers that this is not a uniform learning journey that we have been on as a sector. It is remarkable that there still are pockets that will find themselves wanting when they ask themselves those questions.
There are some examples of organizations that have done it well. It leads me to my next question. In our sector, we often dwell on the things we are not doing and the things we’re not able to do. We often lead with messages about how funding or positioning are preventing us from doing the great work we could do if only those barriers were removed.
I’m interested in your perspective on it. Leading with positive examples holds a way of convincing others to join us who may be busy and not paying attention. However, by putting more of a spotlight on the organizations that are effective, particularly in the issues related to equity, efficiency, and amalgamation, tell the stories of success and lead with those examples rather than the constant critique that seems to be prevalent in our sector.
One of the wonderful things about our sector is it is highly innovative. Through the pandemic, in particular, we have seen organizations and communities respond to overcome the hurdles they have been facing. There are a multitude of stories. Everything from the creation of a network of pet food banks in Saskatchewan to addressing a fear that in the early days of the pandemic, when people adopted pets because they were locked in, they would abandon them or return, and in tough economic times, they couldn’t feed them. Now there is a network of pet food banks across the province.
We have seen counseling organizations across the country who have indicated that post-pandemic, they are not going to return to their practices of providing counseling services 100% in person. That only maybe 30% in the future, not because it is cheaper but because they are having a greater impact. People who wouldn’t go downtown to their offices for their appointments are doing them on their phones and tablets. Their actual participation rate has gone up during the pandemic.
These are wonderful, incredible stories of innovation that we should be featuring and tying to the deconstruction of barriers and challenges that prevent us from truly unleashing the power of social good. This is how we can do things and guess where we could go if we work together to bring some of these barriers down.
Why is it hard to start with the successes as a sector? Even in our conversation, you and I are optimistic supporters and champions of the sector. It took us several minutes almost to get to the point where we were talking about the successes first. There is a potential that we are leading with our weakest plague on this journey rather than leading with our strongest. How can we make that transition? How do we more consistently lead with what is working rather than leading with what is not?
It is about intentionality and looking at the nature of the conversations that we are having. The invitation is created by stories because we have talked a lot about data. Let’s not forget the power of storytelling in our sector because we are such a human sector, whether it is a member of the media, a member of a provincial legislative assembly, a House of Commons, or a senator. When we are having those conversations, they are people first. They can get engaged and invited through those stories. As we are being mindful about the ways we can affect the future, this is a different way of entering those conversations. We have to sit down and think about, “How are we going to accomplish our goal, and what is our starting point?”
Anyone tuning into this conversation can feel your energy flowing through their eyes. You have been CEO of Imagine Canada for several years. What are the biggest changes you have seen in the sector over that time as CEO?
It is almost like there was pre-COVID and since COVID. At a macro level, one of the biggest changes I have witnessed is a greater appetite for collaborative work. We see it everywhere. Imagine Canada doesn’t do much on its own anymore. That is great because, for the work that we do, we are stronger when we work together with other organizations.
There has been a mindset shift. I’m finding far less conversations where you feel like ego and logo has been the dominant issues. It is more about how we are going to collectively work together to change whatever it is we are seeking to change and an acceptance and a realization that our organizational interest or priority may not be the top one, but we are still going to be here. We are not going to leave. Our turn will come. It feels like a different way of working in different conversations. I’m hoping it is one that continues.
The pandemic was an example of our sector being built for this with the response that many organizations and people within the sector had to deliver services and meet the needs of communities in a variety of different ways. It is inspiring to see how our sector responded. It has been recognized. The work Imagine Canada and others did to ensure the sector was involved in the wage subsidy program.
It was more than a lifeline. It was a vote of confidence that the work was important and the work should continue. I want to applaud when I hear you talking about where the sector is going and those more collaborative conversations. Hopefully, it leads to greater confidence in those conversations. When we do our work well, we do our work very well. When we work together, it is even better. There is a lot to build on there.
I started this off by saying, “You are the spokesperson and the champion for the sector.” You demurred and said you are one of many voices, but Bruce, your voice is one that comes through a lot because it is an important one, and the position you hold is important. I would imagine it is sometimes a bit of a lonely job. When you need a pep talk or to air something out, who do you turn to for advice?
I’m fortunate that for the last decade, I have belonged to a collective of CEOs that is primarily private sector CEOs. It is a safe place for me to sometimes blow off a little steam and draw on the expertise of people that don’t have preconceived notions about the organization or the sector. Maybe the sector a little bit because they do come in contact with it.
It is a group of wise individuals who provide counsel. There are lots of folks in the sector. It is such a great network. There is a great collaboration among organizational leaders. Sometimes on those tough issues where you feel you truly need a safe place that is truly independent, I can go to this other group and have a conversation. It has been a wonderful place to be able to go, chat about issues and bounce off ideas. At times, their feedback and counsel have resulted in me fundamentally reframing how I was coming at things and that has always been for the better.
One of the common features of strong leaders when we ask a question is they often refer to the network of other CEOs or leaders that they have in common, and they share, reflect, and vent the question. You are leading the team there. Imagine Canada is recognized as being a highly professional organization doing great work. How do your team members earn a gold star when they are doing the work, you are looking over the shoulder, and you are seeing it from afar?
I’m a hard marker. What’s amazing is that our team here has been consummate surfers. We have ridden a variety of waves during the pandemic. What I have found interesting, and it has been a continual learning for me as a leader, is to see where new ideas have emerged. We are now a fully distributed virtual organization. We have been piloting a four-day workweek. We have cross-departmental workers on anti-racism and anti-oppression activities.
It has been our staff who have challenged our way of working and our way of being. Those have been great conversations to have with our board. Those are the conversations where the extra stars get added because we need to be thinking about our future in this world in the way it has transformed. Having many different people at different levels of our organization participate has been truly wonderful.
It is an example of leading by example for the sector.
To a certain degree, it has been interesting. Certainly, through this four-day workweek pilot, we are getting many organizations who have reached out and said, “How is it going? What have you learned? What has been good? What has been bad? Has there been anything ugly?” We have committed to being transparent about that. We will be having some more information coming out in terms of how our early months of this have been going. It is nice to be able to engage with organizations where we do have learning and share them because we have benefited so much from those who have done likewise with us.
I look forward to hearing how that goes. I know there are lots of organizations that are tuning in and some other large organizations across the country that are trialing that. Some mumbling about, “Everybody is going to want to work four days a week.” I’m sure you are getting those phone calls. Bruce, I’m confident in saying you are the only person in 180 episodes of the show who has the title former Guinness Record Book Holder. Can you indulge us with the details of that line in your bio?
It comes from my time when I was working for Big Brothers Big Sisters of Canada. We did a promotion involving Mattel, the toy company, and created the world’s longest Hot Wheels track. We had a team of fifteen student engineers who volunteered their time borrowed space at the Canadian National Exhibition and built a track that stretched to three football fields long.
We went to Toronto. It was then called the Toronto Molson Indy, the IndyCar race, and invited people to bring their favorite Hot Wheels car down and try it on the track. We talked to them about being a big brother, a big sister, or financial support. We did it two years in a row. In the second year, we decided to go for the Guinness Book of World Records. We held it for quite some time. Somebody has broken it now, but it was a ton of fun.
Bruce, as we come to the end of our conversation, I love having the opportunity to speak to leaders in our sector and ask what is my favorite question, which is, Bruce, what are you looking forward to?
I am an optimist by trade. When you work for the charitable and not-for-profit sector, those of us who are engaged in the sector are here because we want to make society better. For me, despite data that looks a bit grim and the challenges that we see around the globe and geopolitical affairs, politically and environmentally, my core remains a hopeful optimist.Most people engage in the charitable and not-for-profit sectors because they want to make society better. Despite the grim data and global challenges, let’s remain a hopeful optimist at our cores. Click To Tweet
I go back to this idea of, “We are seeing innovation across the country in our sector.” I’m confident that while the sector may look different in the future, it will continue to deliver these incredible services. Many Canadians take it for granted. Some during the pandemic stumbled on and needed. Hopefully, more will intentionally say, “I want these services here for my family, friends, and kids. I’m going to work to be part of the solution.” For me, it is a hopeful future despite the times we live in.
Thank you for sharing that. Thank you for your hopeful optimism and the great work that you and your colleagues at Imagine Canada do every day.
Thank you for the opportunity to be part of the show.
About Bruce MacDonald
Bruce MacDonald is the President & CEO of Imagine Canada. When carnivals and social good combined, it pointed to a path and for 30 years Bruce has been walking that route. From working for organizations that provide services to young people, older adults, persons with disabilities, community service clubs and sports and recreation groups, Bruce’s experiences have lead him to Imagine Canada. Prior to that, he was the CEO of Big Brothers Big Sisters of Canada where he participated in a collective effort to bring mentoring programs to kids.
Bruce holds a Bachelor of Commerce in Sports Administration from Laurentian University, a Masters in Management in the Voluntary Sector from McGill University and a former record in the Guinness Book of World Records. In early 2019, Bruce was appointed Co-Chair of the Permanent Advisory Committee on the Charitable Sector working with the federal government.