It's time we recognize the full value of volunteering. A simple change to the tax code could help
A localized version of a French tax credit has the potential to unlock billions of dollars of value
This column is an opinion by Stephanie Robertson, the founder & CEO of SiMPACT Strategy Group, and Chris Jarvis, the co-founder and CSO of Realized Worth. For more information about CBC's Opinion section, please see the FAQ.
In times of crisis — and 2021 had its fair share of crises — the power of voluntary citizen efforts is often seen on full display. Volunteers are both the input and the output of resilient communities. Yet, we see in both data from Volunteer Canada and in recurring anecdotes that non-profits are finding themselves doing more with less; and that includes fewer volunteers.
Earlier this month, the United Nations celebrated International Volunteer Day as a time to honour the transformative power of volunteering in our communities and encourage citizen and government support for volunteerism. This year, Secretary General Antonio Guterres made a very specific "appeal to all governments to promote volunteering."
Hollow words or meaningful action?
Well beyond hollow words, governments have powerful levers at their disposal to encourage community volunteerism. In fact, the Canadian government has an opportunity it may not have considered: corporate tax reform may be the catalyst to a resurgence of volunteerism in this time of unprecedented need.
France provides us with an example worth exploring. Article 238a of the French General Tax Code stipulates that companies can make in-kind donations to non-profits, including the unpaid service of employees to deliver skills to support the common good. These contributions must be made during work hours (requiring the company to have a paid time-off policy for volunteering) and include the provision of pro bono services. Companies are then able to apply for a tax reduction equal to 60 per cent of the wage paid to the employee during that period.
Sodexo, a 625,000-employee company, recently shared with us their experience in the French tax scheme: "It's a win-win where we can engage employees to do good for the local communities — which gives them a sense of purpose and improves employee retention — and is a free source of expertise for NGOs," said Nathalie Brindeau, the Europe director of Stop Hunger, a foundation created by Sodexo.
A tax credit translates into action
This tax credit acknowledges that corporate community investment is not limited to cash; our skills and efforts can be even more meaningful. This would quantify the very real value Canadian non-profits are receiving in skilled volunteer resources.
A localized version of the French Article 238a has the potential to unlock billions of dollars of value for all parties: increased resources for essential operations, meaningful employee engagement opportunities, and tax rebates from a government in need of some good news with business.
With more skilled volunteers during working hours, non-profit organizations can offset administrative costs and redirect funds to expand services. As corporations seek to modernize their brands by demonstrating purpose, social responsibility, commitment to the 2030 UN Sustainable Development Goals, and Reconciliation, skills-based volunteer programs hold the potential for incredible impact.
We believe that Canada's new parliament can find broad agreement in this approach. In the context of a Liberal Party promise to increase corporate taxes on banks, for example, this would be an opportunity for corporations to offset any tax increase through tax credits — likely by reporting on volunteer programming already happening in their organization. As an example, audits we conducted for RBC, TD, and Scotiabank show that their current volunteer programs generate anywhere from 12,000 to 40,000 work-time volunteer hours annually; valuing these hours as a tax credit has the potential to dramatically increase those numbers and inspire many other companies to do the same.
Low cost, high reward
The bottom line is still the bottom line, after all. By valuing volunteering, we're taking stock of the financial value of business activities that truly improve society. In our opinion, the value created through investment in community is both desirable and tangible. Rewarding companies that enable skills-based volunteer hours through a tax credit has the potential to dramatically increase volunteering and inspire many other companies to do the same.
Beyond encouraging community-focused corporate behaviour, it will lead to more formal volunteering across the country, both as employees and individuals.
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