Non-Profit Social Responsibility

In addition to some lively feedback (positive and negative) to my recent post about the The Bay’s current Think Pink campaign, I also heard from a number of people in the last week about the $2.7. million g0lden parachute that the SickKids Foundation gave former president Michael O’Mahoney (as it was reported in the Toronto Star, the $2.7M included his final salary of $600,000 and $2.1M in “incentive payments” and money to compensate him for leaving before the end of his contract).

 People I know in the corporate and non-profit sectors were shocked to find out how much Mr. O’Mahoney received wondered how the board of directors at SickKids could have agreed to such as high salary (reported as being more that the president of SickKids Hospital) and severance.

While the lens of corporate social responsibility is clearly focused on the actions of the private sector, organizations in all sectors are being held to a higher standard than ever. In my experience, most large corporations have endorsed the principles of CSR and have put checks and balances in place to ensure that their operations are as responsible as is possible. CSR standards such as the Global Reporting Initiative (GRI) have been adopted by virtually all global corporations. And, business are doing everything they can to better understand the social and environmental outcomes of their actions.

It’s clear that non-profit organizations are not inherently responsible. I think that inappropriate behavior by third sector organizations is a violation of the public’s investment (though taxes and donations) and trust. While guidelines exist for charitable organizations (in Canada through the Canada Revenue Agency) I don’t believe that there is anything as nearly as comprehensive as GRI. (If there is, I be happy to hear about it).

To quote Mr. Obama, this is the “age of responsibility”.  Today, the public has a higher expectation than ever of organizations in all sectors and non-profits should consider reviewing and adopting the principles and practices of CSR.

Paul Klein is president of Impakt Corporation, a Toronto-based outfit that helps corporations increase the returns on their community investments.