Charitable giving in Canada drops to 10-year low, according to tax data

A household penny jar is shown in Montreal, Monday, February 4, 2013.
A household penny jar is shown in Montreal, Monday, February 4, 2013. THE CANADIAN PRESS/Ryan Remiorz

Canadians are becoming less generous and giving fewer donations to charity than they did a decade ago, according to the 2016 Generosity Index published by the Fraser Institute, a think tank, on Thursday.

“Charitable giving in Canada has dropped to a 10-year low,” said Charles Lammam, director of fiscal studies at the Fraser Institute.

The study, which looked at data from the Canada Revenue Agency,  found that 21.3 per cent of Canadians claimed charitable donations on their tax returns in 2014, down from 25.1 per cent 10 years earlier in 2004. The size of their donations also decreased from 0.78 per cent of their income in 2006 to 0.56 per cent in 2014.

By the same measure, American donors are two-and-a-half times more giving with 24.5 per cent of American tax filers doling out 1.42 per cent of their income in 2014.

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In fact, if Canadians had donated at 2006 rates in 2014, charities would have had an additional $3.6 billion to provide “critical services for vulnerable Canadians,” Lammam said.

The Fraser Institute’s study also ranked states and provinces, finding Utah to be the most generous in North America. Manitoba remains Canada’s most giving province, ranked 37th overall, while Alberta and Ontario tied for 50th place.

On the ground, the experiences of Canadian charities with collecting donations have been mixed.

“It’s a bit of a zero-sum game. If some charities are growing, others are declining, and we are not seeing an overall growth in charitable giving,” said Caroline Riseboro, a board member of the Association of Fundraising Professionals and chief executive officer of Plan International Canada, a charity.

The United Way of the Lower Mainland in the Greater Vancouver Area has seen an annual decline in donations of two to three per cent over the last five years, estimated CEO Michael McKnight. In contrast,  a spokesperson for Toronto’s Daily Bread food bank said it has seen a rise in donations, while the Hospital for Sick Kids in Toronto bucked the trend completely with $50 million more in donations in 2016 than in 2010.

Even so, Ted Garrard, chief executive officer of Sick Kids, said that Canadian charities have had to work harder to find new donors and get current donors to dig deeper because of economic difficulties in recent years.

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But others criticized the study’s approach, explaining that focusing on tax data misses the range of ways in which Canadians are giving to others.

“It’s interesting that they call it a generosity index and yet the sole determinant is around tax filer data.

“In fact, our central message is that Canadians are incredibly generous,” said Bruce MacDonald, CEO of Imagine Canada, a organization that supports Canada’s charitable sector. “Generosity comes in other forms. Yes, there’s the stuff that people claim in income tax, but there’s things like donating a Toonie at a cash register.”

“One of the observations we’ve had with young people is that they may be giving in different ways that don’t necessarily show up in the tax system,” he added. “If they are investing in social enterprises or social-purpose businesses or contributing to individuals through crowdfunding sources, they don’t get (tax) receipts for that.”

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For its part, Vancouver’s Union Gospel Mission has seen younger donors who choose to give their time instead of making financial commitments to comparable to their older counterparts, said mission spokesman Jeremy Hunka.

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The organization has also managed to stay on budget, in part because of donations from committed monthly donors.

Others, such as the United Way of the Lower Mainland, are engaging people through channels that don’t generate a tax receipt. On New Year’s, the charity will run a campaign through which donors can send a text message to give $10 to help vulnerable children.

“The baby boomer generation is more likely to write cheques, while younger people want to be engaged in activities,” McKnight said.

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