Pandemic takes toll on charitable giving

Fewer donors, less money, more demands. Charities of all kinds are caught in a pandemic-powered vice that can only be cured with more giving.

Before COVID hit, Canada’s charities pulled in $10.3 billion in donations reported on 2019 tax filings, the most recent year for which tax data is available. It was the third year in a row of increasing revenue, up 3.6 per cent from 2018.

But the pandemic has put a stop to the winning streak. In December last year Imagine Canada’s annual Sector Monitor Study showed 68 per cent of Canadian charities reporting a decline in donations. An Angus Reid Institute survey in the fall of 2020 came up with a 25-per-cent drop in Canadians’ giving efforts compared to before the pandemic. And an April Angus Reid survey for Telus found that only 39 per cent of Canadians had made a donation through the first quarter of 2021, versus 60 per cent prior to COVID.

If past economic disasters are any indication, the bad news on the charity front is no temporary blip, said Cardus vice president of external affairs Brian Dijkema.

“In 2008, when you get the Great Recession, there’s a major drop in the number of donors. It took five years for the amount of money to come back, but the donors never came back,” Dijkema said.

The 2008 recession accelerated a decline in the number of donors that’s been happening for the last 20 years.

Statistics Canada reports that for 25- to 64-year-olds there’s been a significant drop in donations reported on tax returns over time.

“The drop was more gradual for those aged 65 and older,” StatsCan said in ITS March 8 The Daily release. “Since 2012, they have been the group most likely to report donations.”

The fewer-donors-more-money phenomena may reflect the growing gap between the haves and have-nots. Individuals with incomes over $80,000 a year are more likely to report donations when they file their income taxes, Statistics Canada said. It could be that lower income Canadians just don’t have any spare cash.

Dig a little deeper and you will find that the grey-haired mob giving most of the money are the people in the pews on the weekend, Dijkema said.

“One of the largest influences on whether or not somebody gives, and gives regularly, is their religious commitment,” he said.

Dijkema links the declining number of donors across Canada with declining attachment to church, synagogue, mosque and temple.

“As those people become fewer and fewer, you can expect charitable giving to become smaller and smaller,” he said.

And it’s not just a matter of people supporting their own churches.

“Anybody who looks at charitable giving data knows that religious people give more in almost every category,” said Dijkema.

Sure they give to their church, but they also give to environmental charities, medical charities and anybody serving the poor.

Statistics Canada warns of a gap in the giving data if you limit your view to tax filings. The 2018 General Social Survey on giving, volunteering and participating found $11.9 billion in total donations as opposed to just under $9.9 billion reported on Canadian tax returns.

“Many small donations are not captured in the tax data,” Statistics Canada said.

That includes the grocery checkout donations, money raised on crowdfunding platforms and donations by text message. Then there’s money that goes to non-registered charities or out-of-country charities, for which no tax receipts are issued. With a few exceptions, a lot of the technology-fueled, spur-of-the-moment giving poses some serious questions for the charitable sector, Dijkema said. Not that Dijkema would turn away infusions of cash raised on social media.

“That’s great. You get a nice flow of cash in on that,” he said.

But this style of giving changes the relationship between donors and charities. Neither a text message donation nor $2 at the self-checkout constitute a commitment to an organization or cause that would manifest itself in longer-term, planned and regular giving.

“What they don’t do is build the habit of giving. They don’t do the weekly giving, the monthly giving, the annual giving that is basically a formed habit,” said Dijkema.

Dijkema believes people of faith ought to understand the irreplaceable value of charity. Charity holds society together in ways that welfare and public institutions, though they are necessary, can never do.

“(Pope) Benedict XVI in Caritas in Veritate says we need to not neglect public justice, but we cannot think that the justice of the state is sufficient. We need to have something beyond that and that’s where charity comes in,” he said.