Bygone charity records, highly relevant today, reveal rich-poor dynamics

House of Industry historic image

Comparing two very different Toronto institutions designed to help the poor in the 1920s – one run by the city, one by the church – new accounting-based research brings to light some ugly underpinnings. Schulich School of Business Professor Cameron Graham has shown, through a comprehensive analysis of various records, how one of these organizations in particular helped the rich construct themselves as moral and generous, effectively legitimizing their upper-class status, while at the same time stigmatized the poor, often characterized as lazy or slothful.

This research paints a picture of normalized inequality

In cutting to the heart of the relationship between rich donors and poor recipients of aid, this research paints a picture of normalized inequality, which, says Graham, persists in the present day.

“This applies equally to homeless shelters, hospital charities and international development charities for the so-called Third World,” he says. He hopes that this analysis can shed some light on poverty alleviation today.

Graham undertook this research, the findings of which were published in Critical Perspectives on Accounting (2018), in collaboration with Claudine Grisard, who was a postdoc at York and is now at the Strathclyde Business School in Glasgow, Scotland.

Cameron Graham
Cameron Graham

Graham is not a stereotypical accountant. He’s a researcher who focuses on the social role of accounting. “I look at accounting in settings that are often ignored, such as government programs or organizations, particularly settings where poverty is endemic,” he explains.

In this new work, he studied two different approaches to poverty relief in Toronto in the 1920s, a time of extreme poverty: the House of Industry, a private charity funded by the city and run by Toronto’s elite; and the Church Home for the Aged, funded by the Anglican Church and run by the Sisterhood of St. John the Divine.

Each made different assumptions about how the poor are connected to others in society. Graham hoped that via this comparison, he could observe a wider variety of roles of accounting, or record-keeping, with respect to poverty. His key assumption was that accounting plays a role in the stigmatization of the poor in society.

Three sources of information proved fruitful

Graham gathered data from three sources: the Toronto Archives; the archives of the Anglican Church’s Order of St. John the Divine; and an unpublished master’s thesis by Naomi Norquay, now in York’s Faculty of Education.

House of Industry casual relief applicants breaking stone (c. 1900). Source: City of Toronto Archives, Fonds 1035, Series 806, File 3

House of Industry reinforces the moral failure of the poor

Graham and Grisard discovered the following about the House of Industry, which assumed that people were poor because they were lazy, making rehabilitation necessary:

Figure 1: Cover of “Annual Report of the House of Industry, 1921-1922.” Source: House of Industry (1921-22)
  • Annual reports featured trustees’ and managers’ names – many of whom were donors – on the cover and repeated inside the publication, clearly intending to showcase these members and reinforce the moral foundation of their social position (Figure 1). “This is an interestingly formal recognition that did not involve any contact with the recipients of these funds, the poor, whom many donors considered to be helpless wrecks and castaways,” says Graham.
  • The activities of the Ladies’ Committee were also profiled to reinforce social status.
  • A doctor’s report linked the poverty of the patients with poor health and advanced age.
  • Financial statements showed that the primary costs were associated with food and the (highly visible) outdoor relief program, both of which implied that once a person entered this establishment, he or she had lost all financial responsibility – further stigmatizing poverty.
  • Notations stated that “practically none” of the residents were able to do any paid work. It is noteworthy that those who did work, beyond regular domestic work, were not paid. The value of this labour was never documented.

Church Home reflects social bond between parish and poorer members

The underlying assumptions of the Church Home were different from those of the House of Industry. Here, the role of poverty was twofold: it provided opportunity for a material expression of religious faith and asserted the priority of the spiritual, in that the poor were saved from poverty by the church community.

Figure 2: Financial Statements of the Church Home, 1924. Source: Church Home for the Aged Annual Report (1924)

The researchers discovered the following about this operation, which appears in contrast to that of the House of Industry:

  • The sisters gained spiritual satisfaction from doing charitable work. They emphasized community and some even lived among the residents. In this way, the residents were not stigmatized.
  • The value of the sisters’ work was recognized in the financial statements (Figure 2). “Here, accounting shows or acknowledges the importance of their work and equates it to the value of the donations from wealthy donors,” Graham explains.
  • A monthly fee was charged to residents if they could afford it. In fact, receipts from residents made up 73 per cent of total revenues in 1924. “This means that the charity was as much about poverty prevention as alleviation. It also means that the Church Home acknowledged the contributions of the sisters and the residents to their shared community,” Graham says.
  • In this case, the role of accounting reflects the social bond between the parish and its poorer members.

Findings have implications today in fundraising and service delivery for clients living in poverty

This research shows how the accounting practices in two Toronto charities underscored specific relationships between rich and poor. It shows how accounting functions as a pivot point, allowing different stakeholders to have different moral relationships with organizations.

“The rich are permitted to enjoy a gift relationship, which signifies their generosity; the poor are positioned as being in an exchange relationship, reinforcing the social norm that the poor should earn their keep, which persists today,” Graham says.

He emphasizes the implication: the rich must somehow deserve their wealth, thus legitimizing the unequal distribution of wealth in society. He believes that this is an enduring feature of our philanthropic models today, for funding hospitals and business schools, for instance.

This study has implications today, for research within non-governmental organizations and for fundraising, where the wealthy are aggressively cultivated as donors.

To read the article “Rich man, poor man, beggar man, thief: Accounting and the stigma of poverty” in Critical Perspectives on Accounting, go to the website. To learn more about Graham, visit his Faculty profile page.

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By Megan Mueller, senior manager, research communications, Office of the Vice-President Research & Innovation, York University,