Yet the number of Canadians who donated slowly began to fall, from about 30 per cent of those who filed tax returns in 1990, according to Statistics Canada, to an all-time low of 23 per cent two decades later. Charities could cope as long as their remaining backers picked up the slack – and they did. The median donation increased from $120 in 1990 to $250 in 2007, even as those giving the money aged notably, from 47 on average to 53.
Then the recession hit. In 2008 and 2009, donations fell by almost $1-billion, an alarming figure only partly offset by the fact that Revenue Canada was cracking down on illegal tax shelters, and disallowing contributions to some charities.
Again the sudden decline sprang from a long-standing trend. A recent study by the Conference Board of Canada found that virtually all of the wealth created in the past 30 years has gone to the top 20 per cent of income earners, about one-third of it to the top 1 per cent.
The middle class, meanwhile, “are feeling, not just poor, but insecure,” says Anne Golden, the Conference Board’s chief executive and a former head of the United Way of Greater Toronto. “And I know from talking to charity heads that it’s not just not feeling rich that causes people not to give. But if you feel anxious about your current income or your future retirement income, that is a big factor in your life.”
Such anxiety resonates with current United Way head Susan McIsaac, whose campaign kicked off in earnest this week in the hope of collecting $116-million by Christmas.
One of North America’s largest annual fundraising drives, it provides the lifeblood for 200 social agencies and in the past could count on double-digit growth every year. But now, Ms. McIsaac says, the United Way is looking to the future and “preparing for the worst.”
Tax deductions are often proposed to remedy the donor decline. Imagine Canada advocates a “stretch tax credit” for people who make small donations. “We are targeting this to young donors, young families who haven’t yet gotten into the habit of giving,” says Imagine CEO Marcel Lauzière.
In recent years, the biggest breaks have largely benefited the well-off by making donations of publicly traded securities and other assets more tax-friendly. This has translated into major gifts, especially for larger charities and foundations.
But increasingly those willing to donate large sums are determined not just to write a cheque but to become more involved.
After retiring from the federal civil service a few years ago, Calgary resident Elizabeth Marshall joined forces with her sister and some close friends to set up their own charitable foundation. “I wanted to find a way to make the donations count,” Ms. Marshall says. “And I wanted some control over where it went.”
Now volunteering with a local literacy program and as a tutor, she is pleased with the outcome. “It is wonderful when you see something you worked on get done.”
So many Canadians have begun to follow in Ms. Marshall’s footsteps that the number of private foundations has nearly doubled in the past decade to about 5,000. Soon they will outnumber public and community foundations, and already control far more in assets – about $13-billion.
As a result, existing charities can no longer just send out appeals and hope donors will respond. They often have to work with benefactors individually and figure out what they want; securing a major gift can take years of negotiation. The popularity of “donor-advised funds” (“accounts” created by agencies to let donors decide where their money goes) has left many charities with so many pockets of committed cash that launching a new program can be difficult.
