Canadian Donations to Charity are Declining

A couple of weeks ago, Canada Helps and Imagine Canada released a report on trends in “charitable giving” (i.e. donations to charities) among Canadians. You can download the full report here, and in the meantime, here are some interesting highlights according to us!

Donation Rates and Amounts Are Going Down

The main finding in the report is that there is a decrease in the percentage of Canadians who donate to charities,  between 4-6% in almost every age group between 2006 and 2015. While there was an increase in the amount given, the increase doesn’t match population growth in Canada during that time.  In other words, lots of decreases. Yikes! 

Is this about age?

• While they still give more than any other age group, some of the largest declines in donation rates are from Canadians aged 55+. However, this group is the only group that increased their donation amounts.
• For Canadians aged 25-54, donation rates and amounts declined.

Many community groups we work with ask us some version of: “what is up with young people and charitable donations?”. CanadaHelps commentator Marina Glogovac notes that there are a number of factors contributing to this:

• “We are living in a different economic climate in the post-2008 world, with rising costs of living (especially housing) and mounting student debts that make cash flow for young families a lot tighter than it was for previous generations” 
• “Many studies confirm that faith-based giving and faith-motivated donors have traditionally represented the largest chunk of giving, and that these donors gave more on average than non-faith donors. Unfortunately, participation is waning across all religions, as even a casual observer at any place of worship can attest.”
• “It is well documented that younger people don’t view traditional institutions and structures in the same way as older generations, and they are therefore are less inclined to be loyal to a specific charity.”

Is it about income?

• People in the top three income groups ($150k+) showed the biggest decline in donation amount over the past 11 years (dropping about 5%).
• Families making $250K or more give around 2% of their income. 
• When a family’s income increases, they give as much as they did before- which means lower average donations overall.
• When a family’s income decreases, so do their giving amounts.
• Fewer lower-income families make donations than high-income families. However, low incomes families that do donate give a higher percentage of their total income. These families have also increased the amount they give (from 3.3% to 5.5% in the past 11 years). 

Which Charities Are Getting the Most Money?

The report had some really interesting information on which charities get the most funding. They included data both in terms of individual donations and government funding.

• A third of donations go to charities that provide social services. Health (received 26%), public benefit (22%), religion (21%) and education (19%) are also popular causes. Charities serving Indigenous peoples (1%), promoting arts and culture (6%) and protecting the environment (6%) received the fewest amount of donations.
• The vast majority of government funding is directed at a small number of very large charities. 85% of all government funding goes to the 1% of charities that reported more than 200 employees.
•  The majority of government funding is directed at charities working in health and education. Together, charities in these two categories receive 87.1% of all government dollars.

As the report notes, this leaves small charities, and charities working in other areas, in a very tough spot.

Small charities, in particular, support an incredible diversity of issues and causes in communities across the country, doing vital work that is often left unnoticed until you or a person you care about needs help.

What Does this Mean for Fundraising?

The report notes two main trends in fundraising efforts for small charities.

Focus on Monthly Contributions

It’s clear that charities and non-profits must find a way to encourage more Canadians to make monthly contributions. By doing so, data shows that they have the potential to gain long-term donors who give more generously and more often.

To hammer the message in: focus on regular sustainable donations, and not on crowdfunding, a topic the report also has a lot to say about!

Increasing Revenue from Goods and Services   

In 2016, “Sales of Goods & Services” accounted for $22.6 billion of charity revenues, 26% more than in 2010. These could be admission fees, service fees for daycares, sales in gift shops, etc. For example, at COCo a significant portion of our income is from selling our services in facilitation, mediation, and training. It is a growing revenue strategy for community organizations all over! 

Increasing Online Donations

While the number of overall individual donors in Canada decreased 0.5% per year from 2006 to 2015, CanadaHelps data shows that the number of individual online donors has steadily increased to 20.5% annually over the past five years. Online donors also increased their annual donation amounts at a much higher rate than average donation amount for all dollars (2.8% vs. 1.2% per year).

Sometimes, people think online giving just means crowdfunding. It doesn’t! Like above, it can also mean things like recurring monthly donations.

If you are interested in other questions about fundraising, you can also make an appointment to use our fundraising database at the COCo offices, or check out our online toolbox here.