October 28, 2011; Source: The Globe and Mail | The Stephen Harper government in Canada has announced a “new era of accountability in which businesses and citizens shoulder more of the cost of giving.” In other words, the Canadian government is going to cut back on government financing of nonprofits. Purportedly, the government’s new ideas about nonprofits are inspired by the U.K.’s Conservative prime minister David Cameron’s “Big Society” plan for shifting more governmental responsibilities to the voluntary sector—the Cameron plan that the Economist referred to recently as a “dud”.

What’s on tap in Ottawa?

  • Increases in tax credits for charitable giving
  • New flexibility allowing nonprofits to generate money through side businesses
  • Performance standards on government grants

The Minister for Human Resources and Skills Development, Diane Finley, made a point about performance standards, suggesting that in the past, government gave nonprofits grants regardless of their performance. She told the Globe and Mail, “Now we’re saying, ‘All right, we still want you to do this, but you get more money if you actually achieve the objectives.’”

It’s not hard to see the underlying theme behind the new attention to nonprofits. Federal agencies are under direction to cut their budgets. Nonprofits that depend on government grants are obviously an easy cost-savings target. Unconcerned about the Economist’s dismissal of the Cameron experiment, Finley went to the U.K. to look at Big Society projects in person, and came away with one big thought—that government could ask nonprofits and volunteers to take on a larger share of the cost and responsibility for social welfare programs. She also visited the U.K.’s experts in social investment as examples of mobilizing “private capital for public good,” citing Habitat for Humanity and its work with Home Depot.

Why is it that when governments want to cut back on their budgets in the U.K., the U.S., and now Canada, they are remarkably creative in their thinking about cutting nonprofits?—Rick Cohen