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In the business world, financial resources are allocated via the stock market on the basis of current or expected profits. Businesses that are making the most money, are generally rewarded and those that are not making money, are generally punished.

The business world is mostly black-and-white. The not-for-profit world, on the other hand, is quite different. Measuring success is significantly more complicated. Many of the outcomes cannot be accurately quantified. In addition, human behaviour is complex, which makes it difficult to ascertain cause and effect. The best one can do is find a correlation which describes the relationship between various variables. How then can resources be efficiently and effectively allocated in the not-for-profit sector to eliminate poverty?

Over the last 15 years, due to ruthless government cutbacks, the sector has been left devastated and is currently on life support. Not-for-profits have been corporatized — funding is now determined by individual programs or organizations reaching numerical outcomes that often aren't meaningful. As a result of this system, not-for-profits compete intensely with each other for funding. It has become a dog-and-pony show to outdo each other. More emphasis is on making programs look good rather than improving them. The better an organization is at pulling heartstrings with its marketing, the more funding it will obtain. The problem is that the difference between the marketing and an organization's ability to fulfil its mandate can be quite vast. The result is an enormous waste of human and financial resources spent on marketing.

With the cutbacks, charities have tried to fill the void. The problem is that charities are generally funded by those who are benefiting from the way things are. These donors feel good, or at least reduce their guilt, by giving. They then get a tax receipt to boot. There is little incentive for real structural change to eliminate poverty. Compared to governments, charities have little resources and do not have legislative powers. They are not democratic either. Unlike corporations, charities can even lose their status if they become too political. Most importantly, charities are accountable to their funders, not to those living in poverty, whom they serve. These are the reasons that charities have been around for hundreds of years and have made barely a dent on poverty.

Though most not-for-profit workers are dedicated and caring, the sector is not designed to eliminate poverty. There are also too many poverty-based charities, which means that financial resources are spread too thin. The not-for-profit sector resembles a forest of small stunted trees. We need to realize that not all seeds in a forest can grow to maturity. Therefore, some not-for-profit organizations need to pass away. These resources need to be reallocated to areas where they are most needed and can be most effectively utilized to allow the not-for-profit sector to become a flourishing and healthy forest.

Having individuals making individual choices on who they donate to, often to the feel-good not-for-profit Band-Aids, and having not-for-profits compete for funding has clearly been unsuccessful. Even though tax receipt donations in Canada increased to $8.5 billion in 2006 from $5.4 billion in 2000, the child poverty rate is the same now as it was in 1989. What is most needed is for not-for-profits to collectively work together to eliminate poverty. All not-for-profit, including charity, financial resources need to go to a central not-for-profit fund. Instead of people individually donating to charities, the government should increase taxes by $8.5 billion. This money should then be placed into a central not-for-profit fund. Clearly, this is more efficient. With a progressive tax system this would be more fair, too.

A board of directors for such a fund should be composed of individuals from government, not-for-profits, businesses and citizens and, especially, those living in poverty. The full-time and paid board would determine how these resources should most appropriately and strategically be allocated to eliminate poverty. Many difficult and painful decisions would have to be made. The board should connect and co-ordinate with the health care, income support, affordable housing, community development, public transportation and other sectors to increase its effectiveness. The whole success hinges on not-for-profit organizations' openness and honesty about their successes and failures. The effectiveness of the organization's board of directors in reducing poverty would be subject to regular evaluation.

The transition period of reallocating financial and human resources would not be easy. Layoffs would need to be minimized. A restructuring of not-for-profit workers’ wages is in order too. Despite higher education levels, not-for-profit workers are paid less than private sector workers. Increasing the unionization rate in the not-for-profit sector would increase workers’ ability to increase their wages. These unrepresented workers cannot continue to be devalued and exploited. The fiercest resistance to changing the charity status quo would come from contented management in not-for-profit organizations. They are the ones who benefit the most from poverty.

The not-for-profit sector is suffering from fatigue, disillusionment, poor pay and high turnover, and is delivering poor service. Now is the opportunity for strategic, co-operative, collaborative and courageous action from the not-for-profit sector to make poverty in Calgary history. What are we waiting for?

David Wilson is an activist working for a more equitable and sustainable Calgary and has worked in the not-for-profit sector for five years.