Entering a New Era of Philanthropy: Where Do Canadians Stand?

Par Iryna Khovrenkov , Co-directrice du Hub de l'ouest
12 février 2020

New era philanthropyAs defined by distinguished non-profit scholars Lester Salamon and Helmut Anheier, philanthropy is the giving of gifts for public purposes. How has charitable giving evolved in Canada in the past twenty years? And where do we stand as we begin a new decade, and most possibly, a new era of philanthropy?

Philanthropic causes in Canada have been supported primarily by four stakeholders: individuals, corporations, foundations, and governments.

Individual giving has evolved particularly around how Canadians give and how much they give. More donors are interested in supporting charitable causes through the establishment of donor-advised funds. Fewer donors are willing to contribute through work-place campaigns,      preferring to give directly to the charities of their choice. Canadians are also showing greater appetite for online giving and crowdfunding. And in addition to monetary gifts, Canadians are donating their unused computing power as part of a charitable initiative pioneered by IBM in partnership with the World Community Grid to solve large scientific problems for the benefit of humanity.

Demographically, as the latest Imagine Canada report (2018) outlines, the likelihood of giving and average amounts donated in Canada follow expected trends – they increase with age, income, and educational attainment. New foreign-born Canadians are found to be more generous than their Canadian-born counterparts. Women tend to donate more frequently than men, but men make larger donations. Yet the proportion of tax filers claiming donations has been falling steadily, which is reflected in declining tax-receipted donations as a share of total charity revenues (Chart 1). As the Canadian population is ageing, and younger Canadians are less motivated givers, we need to think about creative ways of engaging younger people in supporting charitable causes.

New era philanthropy

Chart 1: Tax-receipted donations as a share of total charity revenues (%) Source: Author’s calculations; Canada Revenue Agency and Secure Empirical Analysis Lab, McMaster University

Involving Indigenous communities in charitable giving is also important as the growth of the Indigenous population far exceeds the growth of the non-Indigenous population. Currently, very little is known about Indigenous givers. Additionally, support to Indigenous charities is often overlooked due to the impression that governments provide adequate funding to these organizations under treaty or other obligations. Understanding Indigenous charitable giving would be invaluable to growing Canadian philanthropic space.

Corporate philanthropy has expanded its reach over the past two decades. Many corporations have adopted community investment programs and established strategic partnerships with non-profit organizations. The largest barrier to effectively learning about corporate philanthropy and its contribution to Canadian society is the absence of comprehensive data that tracks corporate donations. As a society, we would greatly benefit from addressing this data limitation.

Foundations and governments, whilst both devoted supporters of charitable causes, have experienced contrasting developments. Government funding to charities has been considerably scaled back due to ongoing budgetary cuts, whereas total foundation grants to charities have increased (also as a share of total charity revenues, Chart 2). Growing support from foundations may potentially offset declining donations since research finds that foundation grants stimulate individual donations to Canadian charities.

New era philanthropy

Chart 2: Foundation grants as a share of total charity revenues Source: Author’s calculations; Canada Revenue Agency and Secure Empirical Analysis Lab, McMaster University

How we give, who is giving, which platforms we use to give – these aspects have changed and will continue to evolve as we adapt to changing socio-economic climate, cultural diversity, greater online presence and Indigenization. A better understanding of how these new trends will influence the sector is vital in helping the different actors adapt their strategies when planning for the future. Research on the demographics of the Canadian philanthropic sector must be taken seriously and become a collaborative effort among all parties involved. As philanthropy will continue to change its shape, its successful future depends on one important ingredient – that we are in it together.

Would you like to share your thoughts on the Demographics of Philanthropy and their role in shaping the new era of philanthropy? Write to us at philab@uqam.ca, we would love to hear from you!