Changing Landscapes for Charities in Canada: Where Should We Go?

Abstract

Charitable giving in Canada has never been higher. Between 1992 and 2008, contributions to charitable organizations more than doubled, from $4 billion to more than $9 billion. Donations to charitable foundations grew at an even more remarkable rate: more than 250 per cent, over the same period. But those striking numbers mask more puzzling, some might say more worrying, trends. While donations overall have grown, not all charity types have shared equally in the gains. Religious charities and health-related charities have seen the lowest amount of growth. Meanwhile, the country’s larger charities and foundations have seen substantial increases in donations, but donation rates to smaller charities have been relatively flat. As for the donors, it’s almost entirely high-income Canadians who seem to be giving significantly more, while the rate of giving among middle-income and lower income Canadians has hardly grown at all. In fact, the share of people claiming tax credits for donations in each income group is actually in decline, meaning fewer of us seem to be giving to registered charities, while the richest Canadians are primarily responsible for the rise in donations. The reasons for these unusual trends are unclear — though there is some evidence that the more ethnically diverse our country has become, the less inclined we are to donate. And whether we should even be concerned about these uneven patterns — the wealthiest Canadians giving bigger cheques to the country’s biggest charities and foundations — is also an open question. But the uncertainty about what these trends mean, why they’re happening, and whether they’re even a problem, is not something we should take lightly. Changes may be coming soon to Canadian charity policy: Last year, a House of Commons committee began a sweeping study of charitable giving in Canada, and it is already evaluating dozens of suggestions for policy adjustments. But, while we can discern some patterns and trends in giving, the reality is that we actually still know very little about why Canadians give, and how we, as a society, want to change the way we give, if at all. And until we make the effort to learn considerably more, any policy changes aimed at altering the landscape for Canadian charities are at risk of being politically driven, rather than evidence-based, and they could very well end up creating more problems than they solve.