Statistics Canada every year releases a little report on “Charitable donors“.  The numbers are very detailed and very specific – but unfortunately, they are also close to meaningless.   I will let others, and there will be many, discuss the increases and decrease and the headline – which could be the same headline for many years “Fewer in number, but increasing in generosity”.  While many newspapers will cover the Stats Can piece I will focus on how useless this whole exercise is.

In fairness to Statistics Canada they have a note to readers:

Note to readers

Canadians contribute in many ways to charitable organizations. These data include only amounts given to charities and approved organizations for which official tax receipts were provided and claimed on tax returns. To verify if a charity is registered under the Income Tax Act, tax filers can consult the Charity Listings available from the Canada Revenue Agency webpage. It is possible to carry donations forward for up to five years after the year in which they were made. Therefore, donations reported for the 2017 taxation year could include donations that were made in any of the five previous years. According to tax laws, tax filers are permitted to claim both their donations, and those made by their spouses to receive better tax benefits. Consequently, the number of people who made charitable donations is higher than the number who claimed tax credits.

Charitable donations promoted through crowdfunding platforms for individuals or organizations who are not linked to charities registered under the Income Tax Act are not captured in this data release. Such donation methods may be more commonly used by younger tax filers. Donations for small amounts such as donation by text message where no tax receipts are issued are also not covered.

Another source of donation data at Statistics Canada is the General Social Survey – Giving, Volunteering and Participating. This survey collects information on all monetary donations reported by individuals, regardless of whether or not the donation resulted in a tax credit.

All data in this release have been tabulated according to the 2016 Standard Geographical Classification used for the 2016 Census.

A census metropolitan area (CMA) is formed by one or more adjacent municipalities centred on a population centre (also known as the core). A CMA must have a total population of at least 100,000, of which 50,000 or more must live in the core.

Now in fairness to the reader let us take this apart.   “Canadians contribute in many ways to charitable organizations.”  yes go on …  oh that was it.    What about the approximately $4 Billion in gifts that are not actually claimed by individuals or companies on their tax returns?  What about corporations, some of them small companies – I guess they are not considered part of “Canadians”.  Many individuals or families do their donations through corporations.  What about the remittances? (for example 15B per year going from Canadians to families, friends and charities just in the global south or developing world).  What amount is donated to Canadian non-profits or “charities” that are not registered charities?  Also they say that their figures refer to “charities and approved organizations for which official tax receipts were provided and claimed on tax returns” – that means that these figures also include gifts to all “qualified donees” which is a number of different categories and not just registered charities but includes municipalities, the provincial government, federal government, certain foreign prescribed universities, certain aboriginal bands etc. but exclude 80-100,000 non-profits in Canada.  What about the tens of billions of dollars worth of volunteering?  What about the large amount of donated goods given to charities that are not even typically receipted?  Which is more generous – a wealthy 75-year-old with no children giving $1000 to an opera house that he frequents or a 25 year with a young child donating 100 hours of their time to a local homeless shelter?

“According to tax laws, tax filers are permitted to claim both their donations, and those made by their spouses to receive better tax benefits. Consequently, the number of people who made charitable donations is higher than the number who claimed tax credits.”  No kidding.   “Permitted”.   We incentivize in the tax system the higher income spouse claiming the deduction and as more people work that out that it does not make sense for each spouse to claim them separately they claim on one form which reduces the number of “donors”.   These statistics give us no idea as to whether 10% or 40% of tax filers combined their donations.

Also in fairness to Stats Can they are taking stats that are easy to obtain and crunching the numbers.  But we need to understand the importance or lack thereof of what they are actually putting forward to the Canadian public and provide better perspective.  Perspective is not that costly.  How much does it cost them to ask CRA for the aggregate number of value of receipted donations each year reported by registered charities on their T3010 forms.  In 2017 it was about 18 billion. This probably provides a better perspective than the individual tax forms.

Please stop equating donating to registered charities with “generosity”.  When you pay for your kid to go to a religious school you often get a tax receipt – is that generosity or paying for your kid to have a religious education? When you give a million dollars to a charity to research an area that is of tremendous interest to you and your business but the charity gives you recognition for a long period of time that might be worth many millions of dollars (even if CRA typically views it as nominal) are you really being generous?  How many of these major gifts are unrestricted and anonymous?

Also most Canadians pay taxes.  Stats Can is talking about $9.6 billion in revenue for the charitable sector or qualified donee sector.  Registered charities alone had revenue of over $279 billion and most of that came from government ie. much of government revenue comes from taxes.  Government revenue that registered charities received from our Snapshot totaled $184 Billion including from the federal government ($9 Billion), provincial governments ($165.4 Billion) and municipal/regional governments ($9.3 billion).  So Stats Can is focusing on about 3% of the revenue of charities.  Draw all the conclusions you want from that.

Stats Can notes “Charitable donations promoted through crowdfunding platforms for individuals or organizations who are not linked to charities registered under the Income Tax Act are not captured in this data release. Such donation methods may be more commonly used by younger tax filers. Donations for small amounts such as donation by text message where no tax receipts are issued are also not covered.”  Well in fact lots of donations to even registered charities are not counted – many registered charities only issue receipts for gifts of say over $20 or $50.  Therefore, if a young person gives 50 gifts a year of say $15 each which is a large amount of money, none of that may be counted. One day young people will realize that with unregulated crowdfunding there are risks and maybe they will be more inclined in the future to donate to registered charities.  However, the unregulated groups sometimes come across as “cool” and “hip”.   A lot of people paint a dreary picture of young people, or millennials, in part based on lower donation levels.

I find it amazing on the other hand that many millennials – certainly in the bigger cities with the extremely high cost of living and daycare etc – donate anything at all.   With low unemployment/higher job security and high concern for social issues millennials are giving.   It is not shocking that many older Canadians (still working) and sometimes without a mortgage or having to support children anymore, can afford to give more.   Also with a porous tax system that allows some very rich people to avoid sometimes paying their “fair” share of taxes (remember Panama Papers etc), it is nice some of the wealthy are tossing in some crumbs for the charities.  While some libertarians may think that all money going to government is a waste it is clear that at least $184 Billion of government money is going to registered charities.  If governments brought in more money perhaps more money would end up going to charities.  If you really wanted millennials to donate to charity think about creating more affordable housing and make universal $7 a day daycare in all of Canada.

Stats Can is not discussing how the numbers they are using are what people declare on their tax form and because there are significant incentives to putting a bigger number on the tax form so people might inflate that number.  In 2006 it was the worst at $1.3 billion and thankfully according to CRA those schemes are markedly reduced.  So some of the past statistics on charitable giving were inflated by scams – which makes some of the current giving look less impressive.  But surely there is a difference between giving to a real charity and charity scam.

Stats Can does mention “Another source of donation data at Statistics Canada is the General Social Survey – Giving, Volunteering and Participating. This survey collects information on all monetary donations reported by individuals, regardless of whether or not the donation resulted in a tax credit.” It does not provide a link or explanation as how long ago the last time there was an analysis of the charity data.  The last publication was based on data from 2013.  They have recently completed another survey and therefore we will know more in about a year.

I digress by discussing one particular misleading chart “Distribution of the total donations amount by age, Canada“.  It shows the percentage donation amounts given by different age group in 2007, 2016 and 2017.  One could draw from that that in 2007 people over the age of 65 gave 30% of the value of donations and that has gone up to 42% in 2017.   People in the 25 to 34 age group have gone down from 7 to 5 % and in the 35 to 44 age group down from 15 to 11%.   Give me a break.   People are living longer and we are allowing some very wealthy people to accumulate huge amounts of wealth – sometimes either with no taxation or deferred taxation for decades.  When one donor or an estate may be in a single year giving hundreds of millions or even more this can distort the whole picture.   If you remove the top few hundred donors (many of whom would be in the 65 year plus category) perhaps this would look different.  For that matter if you excluded the top 10-15 donors this may also make a big difference   Also why is 65+ category?   Should it not be 65 – 75 and then another category 75 plus.

When you have a specialist agency that knows a lot about statistics and little about the sector this is what you get.    On the bright side Canadians don’t really care so there will be no pressure on Stats Can to up its game.  Also the charity sector which has a huge amount of easily available data will not be taking advantage of almost any of it.

My suggestions to Stats Canada is that if you don’t have enough resources to put out a real report then don’t put out any report on donations – save your money and in a few years do it right.