How inflation is hitting Canada’s charities
Canadian charities expect donations to fall and demand for their services to increase, and hope that those with means will continue to donate during the holiday season.
“The need is much greater this year, and while we have been fortunate to engage hundreds of thousands of Canadians who are donating, we are in a situation where many of them need help themselves,” said Pauline Tardif, vice president, fundraising and Partnerships at United Way Centraide Canada.
“There’s a certain tension between the ability to give and the need to access the services that United Way’s network of agencies offers,” Tardif told CTVNews.ca in a Dec. 16 phone interview.
According to a poll by IPSOS released in November, 22 percent of respondents said they will turn to charitable services for food, clothing or shelter in the next six months. That’s an increase from January 2022, when 14 percent of respondents reported an expected reliance on community services, according to IPSOS.
Rising interest rates, economic uncertainty and the increased cost of living are cited as reasons for increasing reliance on charities, according to the survey.
At the same time, an organization that monitors charities is urging Canadians to be wary of major charitable fundraising calls, as many have millions in the bank and have enough to weather a potential donation slowdown.
“As a donor, you have to take the time to fact-check and do some homework,” Kate Bahen, executive director of Charity Intelligence Canada, a nonprofit organization that assesses Canadian charities and their impact, said in a phone call with CTVNews.ca Friday.
Donations to charities in Canada increased 2.7 percent in 2020, to a total of $10.6 billion, according to a Statistics Canada report released in April. The 2020 donations show no significant changes compared to previous years, the report said.
However, according to the report, there is a downward trend in the number of donors, reflected primarily in fewer Canadians reporting donations under $100 (down from 6.5 percent in 2020). There was also an influx of larger donations from a smaller number of donors, offsetting this decline.
According to Statistics Canada, not all donations are reported by taxpayers in Canada due to the use of crowdfunding platforms or organizations not affiliated with registered charities. It’s important to note that “many small donations go unrecorded in tax records,” it says.
WHAT CHARITIES SAY
Canadians have less money to give as disposable income falls, which is linked to inflation, Tardif said. The economic impact of the pandemic is also affecting the most vulnerable Canadians, as they are still recovering or plagued by periods of job loss.
Although the charity doesn’t have specific data to provide on current donations as they’re in the middle of a season, there’s no doubt current economic constraints are having an impact, she said.
United Way’s goals include addressing systemic socio-economic issues affecting people and their families, from home and food insecurity to ensuring children have winter clothes for school, Tardif explained.
“The biggest challenge right now is that it’s not about one or two things, it’s about a multitude of things,” she said. The charity works with a network of community partners and agencies to meet those needs, she said.
Donations to The Salvation Army are down about 20 percent compared to the same time last year, Lt. Col. John Murray, the charity’s territorial secretary for communications, said in a Dec. 16 call with CTVNews.ca. The fundraising goal is $22 million.
That’s because of the overall fundraiser and the charity’s “Christmas Cauldrons,” which are about 2,000 physical locations across the country where Canadians can donate, he said.
The charity is also a Protestant church based in London, England. It provides services related to supporting people affected by homelessness, poverty and addiction.
With more and more families turning to food banks, this is a time of year when giving is important, Murray said.
Food Banks Canada, a charity that represents food banks across the country, said in its 2022 annual report released in November that 1.5 million food banks nationwide were visited in March 2022, a 35 percent increase from March 2019.
The reasons users gave for using food banks were increased food costs, low provincial welfare rates, and housing costs.
According to Imagine Canada, a charity that provides resources to other charities, 48 percent of Canadians intend to donate for the 2022 holiday season, compared to 56 percent in 2021.
The International Development and Relief Foundation, a Canadian nonprofit that provides grants for programs based on Islamic principles, emailed CTVNews.ca on Dec. 20 that inflation is affecting communities here and abroad.
Elyas Burney, the program manager for national initiatives at the charity, cited Imagine Canada’s survey on possible falls in donations as worrying and said the charity provides warm clothing and food for those living in countries like Afghanistan who lack adequate housing for the colder winter months .
HOW TO CHOOSE THE RIGHT CHARITY
However, if Canadians do want to donate this year, Bahen recommends focusing on smaller charities, as these will have more difficulty functioning if donations dwindle.
Examine a charity’s balance sheet along with overheads and see how much program spending is in the bank, Bahen said.
“Charities, not all charities, but some charities are constantly pushing this bang of a ‘crisis’ to open donor wallets,” she said. “That’s why it’s so important to always check the facts.”