A Liberal Member of Parliament is proposing a new private member’s bill that would require the five highest-paid executives of registered Canadian charities to publicly disclose their salaries, the Globe and Mail reported March 16.
Albina Guarnieri, the Liberal MP for Mississauga East—Cooksville, created the bill hoping it would help Canadians make more informed decisions about where to donate their money.
The proposed bill also sets a $250,000 cap on salaries for the senior executives of registered Canadian charities and requests that charities exceeding this payout be officially deregistered.
Guarnieri cites costs like golf club memberships, dining out and business class travel among the ways in which some of the 85,000 registered charities in Canada currently “spend money on themselves.”
The charity transparency bill is a promising proposition. It can be difficult to track how dollars donated to charities are spent, and it’s surprising a transparency bill relating to top salaries hasn’t appeared until now.
It’s in donors’ best interests to know where their money is going, and disclosing top executives’ salaries is a simple step that would go a long way towards accountability.
It’s unlikely the bill, if passed, will result in any significant decrease in how much Canadians donate to charity. Rather, charities are more likely to use their public accountability as a selling point in order to rake in more donations.
If the proposed bill comes into effect, donors shouldn’t fall into the trap of equating how much a charity’s top executive is paid with how much good his or her organization does. For some charities, the most effective way to bring about positive change may be through recruiting a high-quality, high-cost leader. Focusing on the larger question of accountability is more relevant than enforcing blanket salary caps.
Charities are corporate bodies, and racking up dinner bills and rounds of golf should be acknowledged as part of the business. In order to secure large donations, charities often need to make the relatively minute investment of dinner with a potential donor.
If not voluntarily or by good conscience, registered Canadian charities should be compelled by law to state where their money is going. Ideally, the bill would go further to address more than just the top five charity executives in Canada, but for now it should be appreciated as an incremental step towards transparency.
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