Canadian Giving Strong as Charity Growth Slows
(Jan. 28, 2008) A new report has found that while Canadian giving has experienced strong growth over the first five years of the decade (2001-2005), the number of new charities being formed has slowed considerably and the majority of gifts are given to the largest organizations.
The study, “National Report on Fundraising Trends and Cost Effectiveness,” was published in The Offord Group’s newsletter, Perspectives on Canadian Philanthropy. The study examined public foundations and registered charities that issued at least $1 in tax-receipted gifts, or about three-quarters of the 80,000 charitable organizations registered with the Canadian Revenue Agency (CRA).
The study found very little growth (just 1.5 percent) in the number of these organizations in the first half of the decade, with just 60,781 such organizations in 2005 compared to 60,086 in 2001. This flattening of growth is especially surprising giving the strong increase in charities throughout the 1980s and into the 1990s.
The composition of the groups in the study did not change either, with religious organizations accounting for 49 percent of all charities in both 2001 and in 2005. Welfare groups accounted for 26 percent of organizations in 2001 and 27 percent in 2005. Arts and culture, education and health organizations (each accounting for less than 10 percent of all organizations in the study) saw little change as well.
Fundraising Sees Strong Gains
Despite little growth in Canada’s nonprofit sector overall, impressive fundraising gains were seen over the first half of the decade, although the success was not spread evenly over the various subsectors.
Overall, giving grew by more than 20 percent, from $13.4 billion in 2001 to $16.1 billion in 2005. However, welfare (up three percent) and health organizations (up one percent) accounted for more giving in 2005 than in 2001, while religious groups lost ground (dropping three percent). The study hypothesizes that these changes are a reflection of the different giving priorities of the Baby Boomer generation that is now entering its primary giving years.
The study also found that the largest two percent of Canada’s charities received more than 50 percent of all fundraising revenue in 2005. Charities with at least $5 million in tax-receipted gifts accounted for just 0.3 percent of organizations in the study, but received 29.4 percent of fundraising revenue, while “medium” charities (defined as those with between $1 million and $5 million in tax-receipted gifts) represented 1.8 percent of groups in the study and received 20.9 percent of fundraising revenue.
On the other end of the spectrum, the smallest charities, defined in the study as those with less than $100,000 in tax-receipted gifts, accounted for more than three-quarters of all organizations in the study (76.5 percent), but received just 15.6 percent of the fundraising revenue.
The study notes that Canadians tend to give to charities they know and trust, “making it very hard for new and small charities to raise significant revenues.” Professional management, fundraising expertise and the ability to communicate efficiently are also critical reasons larger charities continue to enjoy considerable fundraising advantages.
About the Study
The study was conducted by The Offord Group in collaboration with Innovative Research Group (a public opinion research group) and used data from the Canada Revenue Agency. The newsletter featuring the research is available online at The Offord Group website.
The Offord Group is a fund development consulting organization located in Toronto, with expertise in small and large-scale fundraising enterprises.