Why Are Fewer Canadians Giving to Charities?
A stock photo chosen specifically because of how it’s a stereotypical charity message.
Statistics Canada’s Survey on Giving, Volunteering, and Participating 2018-2023 came out in late June. I had a chance to read it after seeing Imagine Canada’s summary report this week.
The report notes a continued 10 year+ trend of fewer Canadians giving, but those who do giving more to essentially keep charitable giving consistently (though with a growing population, this would mean per capita giving is on a downward trend). I’m particularly interested in the charitable giving numbers, recognizing that philanthropy and doing good involves so many more actions beyond just making a donation. It’s been accepted as a truism in the sector for a number of years (I can recall presentations before COVID which talked about this), but nobody seems to have settled on an explanation for why. I don’t think there’s one single cause. I have come up with six factors that I think contribute to it in different ways.
It’s the Economy
You can only give from what you have.
I left the last word out of James Carville’s famous expression, but this would to me be the Occam’s Razor explanation. Income inequality continues to grow, which means fewer people have more and more people have less. Ergo, fewer people are giving more to charity and more people are giving nothing to charity (or claiming it on their taxes). The 2018-23 period would cover the time of high inflation as we came out of COVID restrictions, and anecdotally I would say I saw evidence of this more from fewer people trend at the time.
I’m also a believer in Kyla Scanlon’s theory that the economy is vibes, so as people see prices rise (after a lengthy period of low to no inflation, and younger people face what they feel is insurmountable student debt and unattainable house prices, they’ll prioritize spending elsewhere. The feeling trumps whatever statistics about earning and spending power might say.
This is probably the biggest reason, but it’s not the only one (so don’t stop reading now).
It’s the Decline in Religiosity
So much of giving has been tied to faith historically. Stats Can’s report does note a decrease in giving to religious organizations, while social services organizations saw an increase. If many people’s giving was tied to their faith, and as they leave the faith (or pass on, and are replaced by non-worshipping adults in these surveys), overall rates of giving will naturally decrease over time.
An example of social purpose messaging from a business.
It’s the Different Ways We Act Charitably and Do Good
Think about all the things you can do to help causes you care about. I’ll use myself as an example. The shoebox pictured above is from a product I bought recently; I was drawn to the brand in part because of their greater attention to sustainability. Next to it (out of picture) is wrapping for a package that arrived today for a piece of previously worn clothing I bought through a site that facilitates that, contributing to the circular economy. I just received an email from the food waste diversion company that delivers fresh produce to my door every week, and my water bottle is sitting next to me on a coffee table purchased from a thrift store run by a homeless-serving organization. That’s four actions that contribute to causes and values that are important to me. Only one directly supports a charity, and none generate charitable tax receipts.
I share this not to brag, or pat myself on the back (I have some terribly unsustainable habits - like flying regularly - and I’m aware of the carbon footprint behind some of the transactions mentioned above), but to illustrate some of the many ways that a person can do good and contribute to causes they support without it showing up in charitable giving. Many of these options didn’t exist or were hard to find a generation ago. Whether they’re BCorps, or simply focus on social good as part of their mission, there are more and more businesses to support that make you feel good when you do. Charities themselves are increasingly moving into social enterprise, providing a product rather than seeking donations. You can reduce your carbon footprint, support arts and culture, and help new immigrants without making a charitable gift.
The growth of crowfunding, direct non-charitable support to projects or people, is also replacing traditional charitable giving. The growth over the past 10-15 years is staggering, and it’s a particularly popular form amongst Millennials and Gen Z.
It’s Because Donor Expectations and Needs Aren’t Being Met
Research shows that donors have experienced a decline in confidence in charities over the years. Whether it’s justified or not, it’s documented and it’s the reality of how people feel (what confidence they have in charities they know and/or support would be much higher, no doubt). This would naturally translate to lower giving overall.
The push for low overhead and administrative costs, which can come from both donors and boards/executives in the sector, also makes it harder for charities to meet donor expectations. It costs money, even if it’s someone’s time, to cultivate and steward donors. If appropriate staffing isn’t in place, and you have a small team (or one person) trying to do several things at once, things will naturally take longer or fall through the cracks sometime. Donors who expect prompt recognition and regular updates will find themselves disappointed. Fundraisers won’t be able to invest time in cultivating a relationship with donors. Or because of being overworked and underpaid, they’ll turn over frequently, making it harder for the organization to build successful relationships with donors. The old adage “you have to spend money to make money” is simplistic, but there’s some truth in it.
It’s the Attention Economy and Too Much Choice
Picture a person seeing the news coverage of growing anti-immigrant rhetoric and actions. Maybe they or their parents or grandparents were immigrants themselves. They decide they want to do something to help immigrants who are arriving in their community. A quick google search on charities helping immigrants in their city brings up…too many choices. This person has heard of a couple of them through news stories, but doesn’t know if they’re reputable or which of the other organizations on the first page of results are. They shut their laptop and tell themselves they’ll read up on these groups later. As they walk to their kitchen, they remember their colleague mentioning a new immigrant-owned restaurant in the neighbourhood. They trust this person’s recommendation and quickly find the restaurant on Instagram. The food looks good in the pictures and they decide that they’ll suggest to their partner that they go there for dinner on the weekend, in part because they want to help immigrants in their community out. They don’t do any more reading on charities.
There’s a concept called choice paralysis (or overchoice, choice overload, or the paradox of choice) whereby we get overwhelmed by having too many options to choose from and shut down. In a world where many charities are working on a similar issue, it can be hard for someone without a personal connection or knowledge otherwise to determine who is best to support with their time or money. It can be easier to choose to support a cause in other ways, or to just tune out. There is also so much information competing for our attention, and things move fast. Scott Graffius’ work shows that on most social media platforms, the lifespan of a post is anywhere from an hour to a day. Not quite blink and you miss it but close. This makes it harder to break through and reach people, whether you’re promoting a cause or selling a product. It may not be a coincidence that giving rates started to drop as smartphone adoption accelerated.
It’s Because People Aren’t Claiming Tax Receipts
t’s a summer weekend, like this one, and you run into a friend at a BBQ. The friend mentions they’re doing a bike ride for charity in a couple of weeks, and mentions they’re raising money. You like this person and want to support them, so you ask them to text you a link to donate, which they do. Later that day, when you check your messages, you click that link, make a donation, and promptly forget about. You’re happy to support your friend and that’s the end of the story as far as you’re concerned. You see what looks like a thank you email from the charity almost as soon as you’ve made your donation, but don’t open it because you want to get back to your weekend.
Does this sound plausible? Is it something you’ve done yourself? With giving so seamless now, and able to be done in a matter of a minute or two, and so many other things fighting for our attention, it’s easy to move on quickly and forget about this tax-reducing gift. Or, a donor may not even consider it as part of their giving. While tax credits do encourage more (and) greater gifts, they’re not a consideration for roughly half of people surveyed.
For donors who do, giving can happen well before tax time. We’re more than halfway through the year, and also more than six months away from the CRA filing period starting. It’s easy to forget, particularly if you haven’t made large donations. Donors may also not see it worth their effort to track. With the exception of Alberta, in almost every province you don’t get a lot back on the first $200 you give to charity. A donor in Vancouver who gave $50 in total to two friends participating in fundraisers will get 20%, or $10, back on their taxes, which might be enough to cover two coffees and still leave a tip. So maybe it’s just that some donors aren’t claiming their credits, not that they aren’t giving.
Summary
As I said at the outset, I don’t think it’s one thing. I do think all six of these factors are contributing. I’d be interested to hear your thoughts, so send me a note if you have thoughts on these, or any I didn’t think of. I’m particularly interested in any research that supports or refutes any of these theories that I may not have seen, and if I come across some I’ll share it in a follow-up post.