December 15, 2016

Revised January 3/4, 2017

Kate Bahen, Managing Director

Canadian Giving hits all-time high of $8.8 billion

Recent headlines may alarm Canadians that giving is down. Not so. Look for yourself. Statistics Canada reports that Canadian giving hits an all-time high of $8.8 billion, a 27% increase over the last 10 years.[1] In 2014 Canadian giving showed a full rebound from the former peak in 2007 of $8.6 billion before the 2008 economic recession, rising 2.3% over 2013’s level of donations. Canada’s charity giving has gone through phenomenal growth and tax-receipted donations have increased 81% since 1997. Statistics Canada collects this data from annual tax filings.

 

Source: StatsCanada “Summary of charitable donors” CANSIM table 111-0001

This report was included in an interview with CBC On the Money December 15, 2016[2]  

In addition, Canadian registered charities report receiving $16 billion in donations and money from other fundraising events, up 7% from $15 billion in 2013. This would include the $8.8 billion in tax receipted donations and an additional $7 million in fundraising support that wasn’t tax receipted, like galas, golf tournaments, toonies at the check out, etc.

Measuring giving is a tricky business. Different data on Canadian giving is also reported by Statistics Canada in its annual survey of giving. While a summary of tax returns show that 21% of Canadian tax filers report charitable donation receipts, 82% of Canadians over the age of 15 report donating money in 2013.[3] In the World Giving Index survey (discussed below) 67% of Canadians report donating to charity compared to 63% in the US.

Mark Blumberg at Global Philanthropy raised another caveat to the charity giving data. His blog post “Did charitable giving in Canada really hit a 10-year low?” is well worth reading[4]. Blumberg reminds us that charity scamming (fraudulent tax sheltering) peaked in 2006 tax filings with the CRA Charities Directorate revoking $1.3 billion in fraudulent tax receipting. In January 2014, the CRA Charities Directorate announced it had revoked $5.9 billion in donation receipts over an unspecified time period[5]. This amount needs to be removed from the graph of reported tax donations and has not been.

Canada ranks 6th in the world out of 140 countries. The World Giving Index 2016 ranks Canada 6th, off the podium from its 2nd place ranking in 2013. In every year Canada has trailed the US.[6] The 2016 rankings are based on a survey of 1,000 people undertaken in 2014 living in 140 countries with a reported 95% degree of accuracy, measuring how much money people give, how much time people donate, and how many people help strangers.

2016 Rank

Top 10 Most Generous Countries

1

Myanmar

2.

United States

3.

Australia

4.

New Zealand

5.

Sri Lanka

6.

Canada

7.

Indonesia

8.

United Kingdom

9.

Ireland

10.

United Arab Emirates

 

What influences giving? An economist would state giving to charity is a discretionary item and is strongly correlated with wealth and economic growth. In economic recessions, giving drops; in times of economic prosperity, giving rises. Rich countries give more money than poor countries. A priest or religious leader would espouse that giving back is a moral obligation and remind us of tithing, donating 10% of total income. As such, faith-strong communities typically have high levels of giving relative to secular communities. Utah’s Mormon community likely accounts for its high level of giving. Giving perhaps also has nationalist roots. Peter Drucker’s work in the charity sector remarked on the high level of giving in ‘Anglo’ countries (the US, the UK, former colonies) especially compared to continental Europe. In the Global Giving ratings, the Netherlands is the highest rated European country at 8th, Germany 21st and France 80th. ‘Former Anglo colonies’, the US included, dominate the Top 10 rankings. From a global perspective, it will be interesting to watch India currently rated 91st (up 29 places) and China currently rated 140 (up 11 places).

 

Giving intelligently matters more than who gives the most money

Charity Intelligence hopes Canadians generously support charities. Yet let’s remember that the purpose of this giving is not to pat ourselves on the back, brag about rankings and who gives most. Shouldn’t the true purpose of giving be to effectively address social problems and improve livelihoods? Charity Intelligence’s research consistently finds that it is not how much money one gives that drives impact, it is giving intelligently. If Canada doesn’t give as much as its American neighbour, it’s therefore more important that what we do give, is given well.

Ammendum: The US charity newsletter Nonprofit Quarterly had these comments on the tax reporting information on American donations. Charity Intelligence has absolutely no experience in assessing US tax returns but from these comments, it would appear that the American “generosity” data is also skewed to higher income donors. This again emphasises how difficult it is to gage and compare charity giving.

US personal and household giving relies on the IRS Form 1040 in the itemized section. Charitable gifts are only reported on itemized returns and only about one third of personal tax returns are itemized. These itemized returns tend to reflect the financial activity of people with more income and more investments rather than typical individuals and families. ”[7]

 

Canadian giving 1997 – 2014

 

C$ billion

 

1997

                    4.273

 

1998

                    4.641

8.6%

1999

                    4.848

4.4%

2000

                    5.439

12.2%

2001

                    5.514

1.4%

2002

                    5.847

6.0%

2003

                    6.513

11.4%

2004

                    6.923

6.3%

2005

                    7.880

13.8%

2006

                    8.530

8.3%

2007

                    8.649

1.4%

2008

                    8.189

-5.3%

2009

                    7.750

-5.4%

2010

                    8.256

6.5%

2011

                    8.470

2.6%

2012

                    8.309

-1.9%

2013

                    8.601

3.5%

2014

                    8.797

2.3%

     

10-Year growth

27%

 

15-Year growth

81%

 

 

 

Sources:

[1] Statistics Canada, Government of Canada “Summary of charitable donors annual Cansim Table 111-0001” http://www5.statcan.gc.ca/cansim/a26?lang=eng&id=1110001

[2] CBC On The Money, December 15, 2016 http://www.cbc.ca/player/play/834436163648

[3] Martin Turcotte, “Volunteering and charitable giving in Canada”, Statistics Canada Table A.2. Donor rate and average annual donations, by province http://www.statcan.gc.ca/pub/89-652-x/89-652-x2015001-eng.htm#a2

[4] Mark Blumberg, “Did charitable giving in Canada really hit a 10-year low?” Global Philanthropy December 21, 2016

http://www.globalphilanthropy.ca/blog/did_charitable_giving_in_canada_really_hit_a_10_year_low

[5] Government of Canada, Canada Revenue Agency continues its procedures for gifting tax shelter schemes”, January 10, 2014

http://news.gc.ca/web/article-en.do?mthd=index&crtr.page=1&nid=808689

[6] Charities Aid Foundation CAF World Giving Index 2016 https://www.cafonline.org/about-us/publications/2016-publications/caf-world-giving-index-2016

[7] Martin Levine, “A New Gilded Age: When are big donors a problem?”, Nonprofit Quarterly, December 7, 2016 https://nonprofitquarterly.org/2016/12/07/gilded-age-modern-philanthropy-big-donor-problems/

The information in this report was prepared by Charity Intelligence Canada and it independent analysts. Factual material information is obtained from the charity and reliable sources. Information may be available to Charity Intelligence Canada or its analysts that is not reflected in this report. Charity Intelligence Canada and its analysts have made endeavours to ensure that this data in this report is accurate and complete but accepts no liability.

 

 

 

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