A new report on charitable giving says that more than 30 per cent of charities are experiencing a significant drop in revenue, while 40 per cent say demand for their services has increased in a lasting way since the start of the pandemic. The report was issued by CanadaHelps.org, an online giving portal that I use myself and have mentioned in this newsletter a few times over the years. To find out more about what charities are up against, I invited CanadaHelps CEO Duke Chang to do a Q&A. Here’s an edited transcript of our exchange by e-mail:
Q: This is a year when some households are up against it as a result of inflation and high interest rates, yet others are in good shape and able to spend. What’s happening with charitable donations from individuals right now?
A: Many Canadian charities are struggling in terms of overall funding, while demand remains at an elevated rate. Since the start of the pandemic, 31 per cent of Canadian charities have reported a drop in revenue, while 45 per cent of charities have reported funding levels at pre-pandemic levels and only 12 per cent of charities report their current fundraising results are higher than pre-pandemic levels. The long-term giving trends facing charities is a chronic issue for charities as fewer Canadians are giving. According to the latest year of tax filer data, only 18.4 per cent of Canadians claimed donations made to Canadian charities in 2020. This figure dipped 11.1 percentage points over the last three decades; over the last five years, it has dropped 5 percentage points.
Q: What about total giving levels?
A: Total giving has moderately increased, but this is due to a small number of older Canadians (55+) giving more. The concern is what will happen when this smaller group of aging donors can no longer give.
Q: What’s your sense of why the number of people donating has fallen?
A: We’re seeing a long-term decline in giving that may be driven by increased cost of living and the precariousness of work, by technology changes that have enabled more direct giving and by cultural changes. Cultural changes include the fact that fewer people are attending traditional religious institutions to donate weekly, as well as demographic shifts. Data from last year highlight how younger Canadians are giving back in different ways. Thirty per cent of Generation Zs and 26 per cent of millennials reported that they have volunteered their time, compared to 29 per cent of Generation Xers and 36 per cent of baby boomers.
Q: What can you tell us about demand for the services provided by charities? Particularly charities like food banks and shelters that help people who have been hurt by soaring costs for food and rent.
A: As of last fall, 22 per cent of Canadians relied on or expected to need support from essential charitable services in the next six months. That was an increase of 8 percentage points when compared to results from January, 2022. Unfortunately, many Canadians are slipping through the cracks of government support and are turning to charities for urgent and basic needs.
Q: When people do make charitable donations, are they favouring any particular charities or causes right now?
A: In 2022, charities supporting international relief efforts experienced significant growth, accounting for 9 per cent of total donations on CanadaHelps. Donations that supported the war efforts in Ukraine made up 90 per cent of donations in the international category. Education charities and those that support social services also grew at a higher rate than other charitable categories on CanadaHelps in 2022.
Q: What’s the average annual charitable donation in Canada?
Middle-aged and older families living in affluent communities gave on average $561.57 in 2022 on CanadaHelps. Canadians who are young, single and living in urban areas gave on average $382.05 in 2022 on CanadaHelps.
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Rob’s personal finance reading list
How to make tax filing as painless as possible
Just find the ideal tax software or app for your situation. Here’s a comparison of major tax software products, some of them free. For tips on making sure you get all the tax breaks available to you, check out Episode Two in the latest season of our Stress Test personal finance podcast for Gen Z and millennials.
Burning through 15,000+ Air Miles
Uncertainty over the future of Air Mile prompted the guy behind the RewardsCanada website to burn off his points buying merchandise. Bank of Montreal recently made an offer to buy Air Miles after its parent company sought protection from creditors. I wonder if BMO has some big announcements to make that rekindle interest in Air Miles.
Why the retirement age in Canada does not need to rise
An economist explains why there’s less pressure here in Canada to raise the age of retirement than in France, where the minimum retirement age has been raised to 64 from 62. There has been a huge backlash to the move, including demonstrations where people have clashed with police.
A use-it-or-lose-it lesson gift cards
A Calgary woman had a $250 gift card for Bed Bath & Beyond, which is closing its stores in Canada and stopped accepting gift cards last month. Rising business bankruptcy numbers argue for using your gift cards now instead of holding onto them for future use.
Ask Rob
Q: On the new First Home Savings Account, once you put in the annual maximum of $8,000 in a year, is there a time frame on when you can withdraw for a home purchase?
A: According to this bulletin on the FHSA, there is no minimum holding period. By comparison, money must be in a registered retirement savings plan for 90 days in order to be withdrawn through the Home Buyers’ Plan.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
How to make a budget: Best apps and templates, cash-only budgeting and more. Here’s some advice on finding the best budgeting app for your needs.
The money-free zone
Check out the new Feist song Borrow Trouble – lush production, with a soaring chorus that hits hard.
Watch this
A Google Flights hack for finding the cheapest airline tickets.
From the Twitterverse
An investment consultant on the benefits of asset allocation ETFs, which offer a diversified portfolio of stocks and bonds packaged in a single exchange-traded fund.
In case you missed these Globe and Mail personal finance-related stories
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More Rob Carrick and money coverage
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