Charities in Canada stretched thin as donations drop, demand rises, report says

Canadian charities are facing "unprecedented strain"due to a projected decline in donations and an expected growth in demand due to the pandemic, according to a new report.

The Giving Report 2022, released on Tuesday by a group called CanadaHelps, says one in four Canadians, or 26 per cent, expectto use or are already usingcharitable services this year to meet basic needs. One in four Canadians, or 25 per cent, expect to give less this year than they did in last year, the report says.

This is the fifth annual report by CanadaHelps, a platform for online donations. Itlooked at the impact of COVID-19on charities, as well as generational differences in giving, the rate of decline in givingand the growing need for charitable services, said Jacob O'Connor, the platform's senior vice-president of charity engagement.

"We really honed in onthe uncertainties that have come out of thepandemic and the unprecedented strainthat this has put on Canada's charitable sector,"O'Connor told CBC News.

"Giving has declined, the demand for service has increased and people's propensity to give andability to give has also decreased. It's kind of a triple whammy there."

Giving declined 12% from 2019 to 2021: projections

O'Connor said the pandemic had led to cancelled in-person fundraising events,includinggalas, runs, walkathons and shows.

CanadaHelps projected a 10 per cent decline in giving in 2020 and an additional two per cent decline the following yearfor a 12 per cent decrease from 2019 to 2021.

WATCH |Canadian charities stretched thin as donations drop, demand rises:

Canadian charities stretched thin as donations drop, demand rises

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A new report projects a 12 per cent decline in Canadians' giving to charitable causes between 2019 and 2021. At the same time, one in four Canadians are using or expect to use charitable services in 2022.

O'Connor said the projections were based on tax filing data from the Canadian Revenue Agency and a projection model. He said there is a relationship, or strong correlation, between gross domestic productand aggregate giving in Canada. CanadaHelps used OECD numbers and the correlation to make the 12 per cent projection, he said.

"Canadians did give more online, but it didn't make up for the tremendous decreases that we saw from those other avenues," he said.

According to the report, four out of five Canadians expect inflation and the effectsof the pandemic to have a negative impact on their financial situation.

Neil Hetherington, CEO of Toronto's Daily Bread Food Bank, said the findings are not a surprise. The food bank saw about 55,000 client visits per month before the pandemic. That monthlynumber has risen to about 130,000. The donations have not tripled, he said.

"Our biggest concern is actually two years out from now, when the need peaks in terms of usage and donations remain stagnant," he said."The need has increased much more so than donations."

Inflationary pressureshave led to an increase inthe number of people who need the food bank, he added.

Younger generations give to social causes

O'Connor said the report also found a widening of what CanadaHelps calls a "giving gap," the rate at which different age groups are giving. The researchersdiscoveredCanadians aged 55 and older are now giving at double the rate of Canadians aged 25 to 54.

"That's a real problem. It's something that we have to address as a sector, to engage with these younger generations of donors, because that 55-plus, that propensity to give, is not going to last forever," he said.

Younger generations, however, donate to social causes, as opposed to specific institutions or organizations, the report found. "This provides some hope for the future," O'Connor said.

In a news release, CanadaHelps said: "When younger Canadians have the means, they donate. While some young Canadians don't give financially today, many have the intention to give in the future."

"New donors that are younger, urban, and diverse all showed a propensity to give in response to urgent needs, especially when related to social justice causes," CanadaHelps added.

Other findings were as follows:

• The percentage of Canadians whogive hascontinued to decline, with 25 per cent of 2006 tax filers claiming donations versus 19 per cent in 2019.
• The annual rate of decline in giving by higher income earners, people who make above $150,000, is more than double the rate for families with incomes between $20,000and $99,000.

According to CanadaHelps, the reportwas developed using proprietaryresearch and online giving data, which includes more than $465 million in donations from more than 968,000 Canadians in support of 31,700 charities inCanada in 2021.

The report wasproduced with the help ofEnvironics Analytics, which provided analysis and insights into trendsin CanadaHelps data.