The convergence of the global pandemic and accelerated movement for the racial/Indigenous justice are set to reshape governments’ relationships with civil society. How public services are financed and delivered, how governments engage with communities and the nonprofit sector, and how both governments and nonprofits practice meaningful inclusion will need to be radically reformed.
Reinventing service delivery
Think ahead, say, to five years. You can’t visit grandma in palliative care, send your kids to summer camp, go to the theatre or access many other services that matter to you. The barrier is not a continued requirement for physical distancing, rather that the charities and nonprofits that once provided these services no longer exist due to COVID-19.
The first challenge for public management post-pandemic, then, will be how to recoup lost services valued by citizens. COVID-19 is already having a devastating effect on Canada’s charitable and nonprofit sector, which employs about 10 percent of the workforce (Statistics Canada 2017). With fundraising events cancelled, venues closed, ticket sales lost, other earned-income evaporated, and volunteers forced away, 70 percent of charities are experiencing reduced revenues, on average about a 30 percent decline (Imagine Canada 2020; ONN 2020; Sask Nonprofit 2020). One in five charities, out of 86,000, will likely close or merge (Imagine Canada 2020), negatively affecting a diversity of subsectors including human services, arts and culture, faith, sports, and international aid. The effects are likely to be place-differentiated, with some locales hollowed out of organizations to a greater extent than others, creating “charity deserts” (Mohan 2015) that leave already vulnerable communities even more vulnerable (Black to the Future 2020). COVID-19 has also pulled back the curtain on the gendered nature of the sector and on precarious work that is under-paid, lacking pensions and benefits and unstable due to short-term contracts, which particularly impacts racialized and immigrant women (Thériault and Vaillancourt n.d.; ONN 2018). In addition, the essential, often invisible role played by volunteers (mainly older women) and families in shoring-up under-staffed facilities became apparent as the pandemic took its toll on long term care homes.
An optimistic, short-term approach for recovery of the nonprofit sector is to extend wage subsidies and other community funding so that there is a “ramp” rather than a “cliff” (Social Ventures Australia and CSI 2020) off the public sector supports, allowing organizations to retain staff and regain stable revenues. The assumption of this “organic” approach to rebuilding is that, with the help of philanthropy and innovative new business models, resilient organizations will survive and, over time, new ones will spring up to replace those that do not make it. This scenario will not be an effective route to restoring publicly valued services and a vibrant nonprofit sector, however. Philanthropy is no substitute for government, and charitable giving and volunteering has been stagnant for years (Lasby and Barr 2018). Although almost $50 billion in assets are held by private foundations in Canada (PFC 2019) – most of it held in perpetuity with a mandatory payout of 3.5 percent annually – this will not suddenly be spent out to cover the $15 billion that is predicted to be lost from the sector due to COVID-19 (Imagine Canada 2020). More than a return to the status quo of 2019 will be required: the “charity model” that has been an integral part of the liberal welfare state over the past fifty years needs to be reinvented.
The charity model relies on a “goodwill” motivation or “passion bonus” to substitute for full compensation of wages and organizational operating costs. With centuries old roots in religion, the charity model was secularized in the Victorian era, absorbed into the creation of the modern welfare state in liberal regimes such as Canada and widely expanded under New Public Management (NPM) beginning in the late 1980s. The contemporary manifestation, which Canadian public administration initially dubbed “alternative service delivery (ASD),” puts an emphasis in government-nonprofit contracting on state control and accountability for public money (Armstrong 1998). Governments determine the deliverables of contracts, manage competitive bidding processes, set results-based frameworks and impose strict accountability and reporting requirements. These contracts rarely pay the full cost of service provision, however, reflecting a popular view that funders (and donors) should not be responsible for “overhead” or administration costs. For nonprofits, this has fuelled a “starvation cycle” (Hager et al. 2004; Lecy and Searing 2015) – a systematic under-investment in the infrastructure such as technology, training and personnel that supports resilience and innovation. This also makes it very difficult to accumulate reserve funds that could support more than three months of operations (ONN 2020), which is contributing to the quick demise of many charities.
For Canadian governments, the charity model has enabled policy neglect of this sector. While there have been attempts at reform, most with limited success, these have focused quite narrowly on contracting arrangements (e.g. Independent Blue Ribbon Panel on Federal Grant and Contribution Programs 2006) or charity regulation (e.g. Joint Regulatory Table 2003), rather than on the broader policy frameworks and machinery that structure and guide relationships between the state and the sector (Anheier and Toepler 2019). A Special Senate Committee on the Charitable Sector took up some of these broader issues in its 2019 report, offering 42 specific recommendations for strengthening the sector and its relationship with the federal government – recommendations that have yet to be implemented. However, the “rubber hits the road” relationships occur primarily with provincial governments, some of which have demonstrated open hostility to nonprofits, particularly those undertaking policy advocacy, in recent years.
Canadian public administration scholarship has not motivated deeper examination of these policy frameworks and, indeed, has facilitated considerable complacency. Beginning in the 2000s, Canadian scholars embraced the paradigm of “New Public Governance (NPG)” which originated in Europe and emphasizes networked, collaborative governance and the co-creation of policy between governments and nonprofits. Conceptually, NPG has much to offer as a model of cross-sector collaboration. But we have failed to test well empirically its existence in the Canadian context. Indeed, we often repeated the notion that such co-creation existed until we began to believe it, or based our evidence on a few, usually favourable case studies. Thus, we tended to conclude, with some cautions, that “co-governance of policy offers the nonprofit sector unprecedented opportunities to influence policy and craft policy solution” (Brock 2020: 267).
I hope that I am wrong in my own, unsubstantiated assertion of the limited presence of collaborative governance in Canadian public management. Perhaps opportunities are unprecedented, but policy co-creation with the nonprofit sector still seems constrained in our country. It is telling, for instance, that the initial federal proposal for wage subsidies for workers displaced by COVID-19 and other supports for employers did not include charities and nonprofits, and it took quick advocacy by sector leaders to get them covered by these programs (Emergency Coalition of Canadian Charities 2020). The fiasco of the agreement (and its subsequent cancellation) with Canada’s “celebrity” charity – the We Charity founded and run by the Kielburger brothers – to manage the $543 million Student Service Grant program on the justification that it was the only charity capable of such delivery sadly reflects on how little the federal government understands or has constructive dialogue with the sector.
As Canadians (for the most part) heeded the call to “stay home” during the early stages of the pandemic, an informal movement of “caremongering” arose – neighbours formed small pods to help neighbours and grassroots groups of mutual and community aid quickly formed (Moscrop 2020). This informal, place-based community mobilization has been counterbalanced by the nation-wide protests and other forms of collection action in support of the international anti-racism movement. What makes the 2020 round of anti-racism mobilization a critical change moment is its broad base of support: while Millennials and Gen Zs have been the primary participants in demonstrations, three-quarters of Canadians support the demonstrations, with such support consistent across the country and across gender, ethnicity and social-economic status (Narrative Research 2020).
The combination of local, self-help and national, systemic-change movements creates new dynamics for public policy and management. A renewal of the importance of place can be anticipated. The effects of COVID-19 have been felt quite differently in different places – between urban and rural, among and within cities – highlighting place-specific economic and social disparities, the importance of leadership by mayors and municipal governments, and the need for policies on opening the economy to be place-sensitive. In pandemic recovery and rebuilding, the exigencies of place will need to be incorporated into public policy and service reconfiguration by all levels of government. In spite of a spatial turn in public policy and in social science scholarship (Logan 2012) in many other countries over the past decade or so, the national and provincial politics of Canada have made differentiation by place quite difficult. And, Canadian scholarship has similarly lagged behind, with few taking up Bradford’s (2005) call to take place more seriously in policy and research. The pursuit of more place-based policy, planning and philanthropy, however, needs to avoid an inherent paradox: that with a greater focus on locale, the risk is diminishing the ability to draw together cross-sector in order to pursue big issues such as sustainable development goals and climate change.
Action on such issues will hinge on meaningful forms of public and community engagement by governments. With heightened collective action, particularly the pressure for fundamental changes to public services such as policing and the revival of attention to climate change post-pandemic, the current practices of “consultation” will be neither legitimate nor adequate to support the kind of systemic changes that are in motion. New processes and mechanisms that engage civil society leaders and citizens in deeper dialogue on complex issues and ways to rebuild the nonprofit sector will need to be developed and tested. Perhaps we will get to NPG after all. We also have an opportunity to build upon the community mobilization of COVID-19 to strengthen the culture of philanthropy and create stronger infrastructure for volunteering, participation and giving.
Diversity, equity and inclusion
The third challenge is not only engaging in more meaningful ways with diverse communities, but ensuring diverse communities are more meaningfully engaged within both governments and civil society organizations. While better practices of diversity, equity and inclusion (DEI) have been on the agenda for years, they are now at the heart of the ability to implement major change.
Accompanied by mandatory reporting on the legislated “equity” categories, the federal and many provincial governments have achieved increased representation of racialized and Indigenous employees, nearing or even surpassing the levels of workforce availability, although with reduced participation in the executive categories (TBS 2020). However, the nonprofit sector lags behind governments in DEI. While data are limited and there is no mandatory reporting on the composition of boards of directors of Canadian charities or their senior management, only an estimated 12 percent of those in leadership roles are from racialized groups, and in a city as diverse as Toronto, only 17.4 percent in 2017 – a slight decrease from 2014 (Cukier 2018).
Inclusion is more than a number, however, but is both a behaviour and an outcome. As Fredette and Bernstein (2019) note, having a critical mass of “minorities” (including youth) on a board not only produces more equitable boardrooms, but it shifts control that is often held in check by the majority, and thus promotes the exercise of collective influence that changes behaviour and can advance change. Meaningful inclusion needs to cultivate leadership pipelines and talent development, strengthen governance and management practices, and provide better reporting on DEI practices (Omidvar 2020). The post-pandemic world will put an onus on nonprofit leaders and public service executives to be more strategic and risk taking as they adapt to the digital and technological transformation and work-from-home routines. If post-pandemic there is a large scale exit of leaders from the public and nonprofit sectors, the opportunity window to implement a human resource renewal plan and cultivate new leadership in an inclusive manner will be narrow.
“Never waste a good crisis” – the line simultaneously attributed to Machiavelli, Churchill and Saul Alinsky in Rules for Radicals – is a fitting mantra for 2020. Canadian public management faces not one, but two historical moments that have created an imperative for change in policies, practices and scholarship. The disastrous effects of COVID-19 on the nonprofit sector require not mere recovery and restoration of the status quo but reinvention of models of service delivery, better means of engagement in policy development, and more effective inclusion and human resource strategies. More place-sensitive approaches supported by better data and data analytics will be essential. The mobilization of grassroots self-help as well as Millennials and Gen Zs demonstrating against racism creates an opportunity to renew a culture of philanthropy, volunteering and activism. Finally, public management scholarship has much work to do in providing better conceptual and empirical analyses of the government-civil society nexus.
Susan D. Phillips is a Professor in the School of Public Policy and Administration, Carleton University and an Editor of “PANL Perspectives.” This article was originally published as part of “Beyond COVID-19: Five commentaries on reimagining governance for future crises and resilience,” in Canadian Public Administration, on Sept. 25, 2020 (https://onlinelibrary.wiley.com/doi/full/10.1111/capa.12388). Photos are courtesy of Unsplash and @geraltyichen (woman on subway), Erik Mclean (debit-credit sign) and Etienne Marais (tire).
References for “The COVID Crisis & the Imperative for Change”
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