This is part of The Globe and Mail’s in-depth look at the evolution of philanthropy. Read more from the series here.
Canadian charities are in a double bind: As donations from the business community decline, the biggest corporations are also becoming more strategic about their giving.
Faced with an ever-increasing swell of requests, companies have raised the bar for funding in recent years by focusing on causes that are linked to their business goals or the promotion of their brands. Many would rather sponsor specific projects than write a cheque to pay for a charity’s general operations.
“The core of what drives a charity, the ability to turn on the lights and fund staff and really create the infrastructure that’s needed to drive the programs and services, that is the piece that has tended to be more compromised as a result of the economic downturn,” says Jan Belanger, who oversees an almost $12-million annual donation budget for Great-West Lifeco Inc. and subsidiaries Canada Life and London Life.
Charities say several years of economic uncertainty and financial restraint have caused companies to become increasingly demanding of charities, even as many corporations are allotting less to their charitable budgets.
“What’s happening globally is definitely impacting giving patterns here at home,” says Cheryl Carline, chief executive officer of the Greater Vancouver Food Bank Society.
But for now at least, Canada is not seeing the sort of dramatic cuts to philanthropic giving that have hit charities dependent on Wall Street. According to The New York Times, Citigroup Inc.’s charitable foundation slashed its giving by 60 per cent last year to a mere $115,000 (U.S.), while the collapse of Lehman Brothers and the disappearance of Merrill Lynch as a standalone entity have left gaping holes in a formerly solid corporate donor base.
Yet with an increasing number of causes competing for funds from Canadian businesses, even larger charities say they are not taking anything for granted. United Way Toronto, for instance, has set a $116-million fundraising goal for 2011, to best the $113.2-million raised last year. While chief executive officer Susan McIsaac believes that goal is achievable, she says business executives seem more cautious this year. “Nobody wanted to overpromise or oversell. There was a tone of caution.”
Distributions of food are shrinking at the Greater Vancouver Food Bank Society because of a drop-off in corporate and individual donations this year. Donations of food from companies have fallen 23 per cent so far this year compared with the same period last year, Ms. Carline says. Cash donations are down 30 per cent.
At the same time, the food bank is paying more for the fresh food it purchases, as well as for energy and gas.
“We’re getting hit from both ends of the spectrum, and it means that we’re constantly cautious and making adjustments on the amount of food we’re able to give out at any one time,” Ms. Carline says.
The Daily Bread Food Bank in Toronto is facing similar problems, with corporate donations down almost 40 per cent so far this year, or about $100,000, says spokeswoman Sarah Anderson.
That drop comes on top of a 40-per-cent decline in individual donations so far this year. The food bank failed to meet its goals for its Thanksgiving food drive, leaving a further $96,000 gap in the budget.
“It kind of adds to the stress, with the fall drive not doing well,” she says. “That’s an indicator that we can expect fundraising in the holiday season is definitely going to be a challenge.”
Assessing the depth of cutbacks in corporate donations is difficult because many privately held businesses don’t disclose details of their giving. According to Statistics Canada, corporate deductions for charitable and other contributions peaked at $2.45-billion in 2008, and dropped 21 per cent to $1.92-billion the following year. They began to recover in 2010, but the economic storms emanating from Europe have brought new uncertainty in 2011.
The shift to focused giving, meanwhile, is exemplified by Bell Canada’s multiyear mental health initiative and Bank of Montreal’s $4-million gift to the Perimeter Institute for Theoretical Physics in Waterloo, Ont.
Other firms, like Canadian Imperial Bank of Commerce, are experimenting with “consumption philanthropy” to bolster their long-standing causes. In 2007, branches began selling CIBC’s Pink Collection, which includes items like travel mugs and dog leashes, to complement the Canadian Breast Cancer Foundation CIBC Run for the Cure.
- Great-West Lifeco Inc$34.12-0.17(-0.50%)
- Citigroup Inc$39.86-0.93(-2.28%)
- Bank of Montreal$74.33-0.18(-0.24%)
- Canadian Imperial Bank of Commerce$89.57-0.26(-0.29%)
- Toronto-Dominion Bank$52.40-0.23(-0.44%)
- Royal Bank of Canada$71.14+0.15(+0.21%)
- Bank of Nova Scotia$56.80-0.06(-0.11%)
- Updated February 5 4:00 PM EST. Delayed by at least 15 minutes.