Introduction

Governments around the world are starting to pay more attention to the voluntary sector. This reflects the growing recognition of the limits of the market and government as allocation mechanisms, and the advantages that the voluntary sector might have in fulfilling certain roles. Furthermore, partnerships among public, private and civic sectors are emerging as a key way of getting work done in today's world. These partnerships raise important questions about the nature and challenges of governance in a world that gives a full place to the three sectors.

The organized voluntary sector in Canada is large and very diverse. It includes 180,000 non-profit organizations and hundreds of thousands of other volunteer groups. Over 7.5 million Canadians volunteer each year, in activities ranging from fundraising for environmental organizations, coaching hockey teams and engaging in performing arts societies, to providing palliative care in hospitals. Altogether they dedicate more than a billion hours through voluntary organizations - the equivalent of 580,000 full time jobs. While 17 million Canadians donate time directly to others, 21 million make donations totalling $4.5 billion to charitable and non-profit organizations (Working Together, 1999).

The voluntary sector is non-hierarchical and extremely diverse. It includes organizations of various sizes, with goals as diverse as social transformation and ensuring enjoyable hockey for kids. The organizations are fiercely independent and deeply suspicious of any kind of formal structure or binding links to government. Moreover, they are built on rather different philosophies about volunteering across regions and sectors in the country.

1. The challenge of coordination

The voluntary sector requires both support from the government and some coordination of its activities if it is to perform its job effectively.

The federal government has understood the need to support the civic sector for many decades and it has a long history of supporting voluntary organizations both directly (starting as early as 1900) and indirectly, through exemptions for charities in the tax system (beginning in the late 1960s). As the federal government assumed more responsibility for direct services to Canadians, it has also increasingly supported and promoted citizen associations. In 1974, a group was even set up to study the federal government's relations with the voluntary sector (Working Together, 1999).

In the 1980s, cuts in core funding to a wide range of voluntary organizations were made for deficit-reduction reasons. They were also a response to doubts about the usefulness of financial support by government of groups that criticized its policies. This approach continued in the 1990s and translated into restrictions on the advocacy role of financially-supported civic groups (Phillips, unpublished).

Individual or corporate donations are eligible for tax credits if the recipients are registered charities. While the value of these tax credits was increased in the 1996 and 1997 budgets, the Canada Customs and Regulatory Agency has ensured that the advocacy function would remain somewhat limited. For instance, a ceiling on advocacy (10 percent of total resources) is placed on registered charities. This is seen in the voluntary sector as a sign of its continued subordination to government.