Governance and the Charity Sector

Published On: 
Sunday, March 27, 2016

In the next few editions of the Hindu Federation newsletter, we will examine a number of matters relating to Governance of Charities.

In this edition, we will consider some general concepts.

Introduction

Charities play a significant role in Canadian society, providing a wide range of services (including religious) to a large section of our population.

Charities face many challenges in responding to the growing expectations of their members and other stakeholders. Under these conditions, well-governed Charities have proved to be more effective, and more likely to succeed, that those that are poorly governed.

To accomplish their goals successfully, Charities require a robust system of governance, at the head of which must be an effective Board of Directors.

What is governance?

Governance refers to the processes and structures used to direct and manage an organization’s operations and activities. It clarifies the division of responsibilities and establishes procedures to achieve accountability among stakeholders, the Board of Directors and management.

Good governance systems are designed to help organizations focus on activities that contribute most to their overall objectives, use their resources effectively, end ensure that they are managed in the best interests of their stakeholders.

Governance is important to Charities because of:

·       Competition for donor dollars. There has to be a demonstration that donor dollars are being used effectively

·       Greater expectations of Charities from donors and other stakeholders. This includes heightened accountability expectations

·       The rapid dissemination of information through social media, which can quickly affect the way that a Charity is perceived

·       The difficulty in recruiting quality Board members due to reasons of time constraint or concerns about liability.

In summary, the objective of good governance is to ensure that the Charity achieves its objective by being able to put forth its best efforts to implement its plans and make the best use if its resources.