Monday, April 16, 2007

Revisionist IMPACS

With the announced insolvency of IMPACS there has been a good measure of post hoc reasoning. The ensuing discussions reveal more about the state of our civil society organizations than the facts of IMPACS demise.

So it is with a sense of posterity that we share a message from IMPACS founder Shauna Sylvester.

Here is Shauna's letter

Dear Friends,

Last week I learned that the organization that I helped to found, IMPACS -the Institute for Media, Policy and Civil Society was bankrupt. After ten years of working to advance democracy in Canada and in countries in conflict or post-conflict around the world, IMPACS was closing its doors.

It’s hard to get over news like that. It’s as if a close friend has died and you’re left wondering if there was anything more you could or should have done. You think about the people who have given so much of themselves in support of the organization - the board members, the staff, the interns, the volunteers, and the associates. You think about the overseas partners, your colleagues and project officers in government, your advisors and allies in the foundation community, the credit union and the other individual donors who believed in the vision and supported the work through its periods of ups and downs. And then you think about why this happened.

Why would an organization that had an incredible board and staff team, an extensive network of allies and partners, a long-pipeline of potential projects and a ten-year history of working with civil society organizations in Canada and internationally fold? In part, I think it was because IMPACS was an entrepreneurial organization. It operated as a non-profit enterprise in an environment where the supports have not yet been fully developed to support such organizations.

In their memo announcing the bankruptcy, the board of IMPACS identified two key issues: the federal government severe cutbacks of non-profit organizations (IMPACS client base) and the lack of core funding. To these two issues I would add:

  • the increasing transaction costs of dealing with government (which were not compensated),

  • the irrational accountability structures that some government departments like CIDA and Industry Canada put in place (that shifted by the hour and were entirely dependent on who was on the other end of the phone),

  • the lack of appropriate financial instruments for social enterprise organizations (social enterprises need patient capital),

  • the lack of consultants with expertise in social enterprise management,

  • the lack of a level playing field for NGOs in government procurement (unlike their private sector counterparts, IMPACS could not charge their billable rate for government contracts that they bid on and won - they could only charge the actual cost of salary and benefits),

  • the inappropriate regulatory regime for charities (e.g. the restrictions on advocacy and the restrictions on operating a related business),

  • the increasing cost of insurance (and the rise in liability, especially working in conflict zones), and

  • the lack of a skilled ‘labour pool’ (there are many people who are skilled in working in non-profit organizations but it is very rare to find people with the values, the entrepreneurial sensibilities, the international outlook and the strategic orientation to work in an organization like IMPACS).

    So given all of these challenges, it is a wonder that IMPACS survived for ten years. And not only did it survive - it thrived. As a founder and former ED of IMPACS, I am so proud of what IMPACS achieved over its ten year history and though I feel a profound sense of sadness for its demise, I know that the work will continue.

    At any wake, it is the custom to toast the deceased. My first toast goes out to each of the board members who have been involved in this organization. I don’t think anyone could find a finer, more committed group of people. My second toast is to the current and former staff, associates, trainers and volunteers. They have been the heart and soul of IMPACS operations. My third toast is to IMPACS’ Canadian and overseas partners and clients, who were the reason that IMPACS was created. And, finally - a toast to the myriad of IMPACS supporters and allies who walked with IMPACS over the years, helped us up when we fell and celebrated with us when we triumphed.

    Out of the ashes the Phoenix will rise….


    Shauna Sylvester

  • Although IMPACS supported "social enterprise", there is no evidence the organization either understood or practiced the mundane basics required to operate as a social enterprise.

    IMPACS is dead. Long live IMPACS.

    A nod of thanks to David Eaves for sharing Shauna's letter.
    --------------------- Tags for information about: for:vsef, Social Economy, Nonprofit, IMPACS


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