With fewer and fewer people making donations, an impeding funding crisis looms over charities across the country
BY WING SZE TANG
Glance at the bottom line, and the picture looks rosy: Charities received a collective total of $9.6 billion in 2014 in claimed donations from individual Canadians, up from $4 billion in 1985. (Both figures are expressed in 2014 dollars and based on tax filings.) The sum reflected a rebound back up to peak levels, reached in 2007 just before the economic downturn, according to “Thirty Years of Giving in Canada,” a report released in April 2018 by the Rideau Hall Foundation and Imagine Canada. It looks as if we’re just as generous as ever. But dig deeper into the numbers, and it’s clear the bottom line is deceiving.
The case of the disappearing donors
“Donation dollars continue to go up. But this masks the fact that fewer people are making donations,” explains Bruce MacDonald , president and CEO of Imagine Canada, a charitable organization that works to support charities and nonprofits nationwide. In fact, the pool of Canadians claiming donations on tax returns has been trending downward almost consistently, shrinking from 29.5 percent in 1990 to 20.8 percent in 2014—a decline of about 30 percent.
The disappearance of so many donors is obscured by the fact that those who do give are giving a lot more. “What the data told us is there’s a concentration of giving among the affluent. The top 1 percent of tax filers in Canada is now responsible for 30 percent of donations,” says MacDonald. “That’s a pretty startling stat.”
Because fewer and fewer people are pitching in, individual giving has been in a period of instability since 2007, with total annual donation amounts fluctuating. The current ups and downs foreshadow a serious threat to the charitable sector ahead: an unavoidable demographic shift that will put 30 percent of donation dollars in jeopardy of being lost.
A looming funding crisis
Not only has individual giving become increasingly concentrated among the richest, in recent decades it’s also become increasingly reliant on the plentiful pockets of older Canadians. People 50 and older accounted for 74.3 percent of donations in 2014, up from 53.8 percent in 1985. And the 70-plus set alone contributed 30.4 percent of donations in 2014—a major slice of the pie at risk of leaving the charitable sector in the next decade or so. “With about $4.3 billion in donations coming from people [70-plus] who are nearing end of life, it is logical to assume there will be changes afoot for the way organizations have been funded,” says MacDonald.
Meanwhile, younger people don’t seem ready to take the baton: They’re less and less likely to donate, and they give smaller amounts when they do, exacerbating the growing giving gap. According to “The Giving Report 2018” from CanadaHelps, a registered charity that provides online fundraising tools to charities, only 4.5 percent of Canadians under age 25, and 14.2 percent of those aged 25-34, donated to charity in 2015.
But don’t assume the millennials don’t care. “I would argue that for young people, social good is in their DNA. It’s just being expressed differently than [previous] generations,” says MacDonald. With societal changes, there’s less trust in large institutions, he adds, so young people may be more inclined to, say, support a friend or individual battling a disease (see: the rapid rise of crowdfunding), rather than an organization devoted to battling that same disease.
There’s another elephant in the room, too: People can’t give if they’re cash-strapped. “Life is much more unaffordable for younger people today than it was for their parents or grandparents,” says Nicole McVan , director of corporate donor relations at United Way Greater Toronto. That means looking at donation rates by age group isn’t a fair comparison. “This generation is less well off than their parents’ generation—and that’s for the first time ever [in history].”
For those saddled with student debt, working in the gig economy with precarious paycheques, or facing ever-rising rents, donating probably isn’t a priority. But as Marina Glogovac, president and CEO of CanadaHelps, points out in “The Giving Report 2018,” though millennials say they can’t afford to give, they’re trading influence on social media and volunteering instead of making monetary contributions.
Changing hearts and minds
When asked about their motivations for giving, 91 percent of donors cited “compassion towards those in need” and 88 percent pointed to their “personal belief in the cause,” according to “Thirty Years of Giving in Canada.” But the act of giving isn’t just rooted in emotion—it’s also a learned behaviour.
In speaking with philanthropists, MacDonald says, many mentioned a place of worship as where they were first exposed to the idea of generosity and giving—for example, by witnessing a parent putting an envelope into a collection plate. Given that attendance at religious services has also been trending downward for decades, asks MacDonald: “How do we, as a nation, continue to pass the value of generosity on to future generations?”
Interestingly, new research from Imagine Canada, to be published in mid-November 2019, suggests one answer: workplaces as proponents of social good. With the blurring and alignment of profit and purpose, “what we are seeing is the rise of intentional, strategic participation of companies and involvement of their employees [in philanthropy],” says MacDonald. “Our report talks about how workplaces may be a new training ground for generosity.”
While Canadians aren’t necessarily caring less, we could always care more. As humans, it’s natural to feel concern for our “in group,” McVan explains, but when we don’t see somebody as part of that “in group,” there’s a tendency to dehumanize. “Coupled with that, we generally can understand the plight of people one social class below us, and one social class above; you can’t understand the ‘ultra rich’ lives and ‘ultra poor’ lives.”
But by going out and making connections—through volunteerism and having face-to-face interactions—we can expand our “in group” a little wider. “It makes you more compassionate,” says McVan, who believes changing hearts and minds toward charitable giving comes back to how we create relationships with each other. “It’s less about systematic changes, and more about feeling connected to your community.”