CanadaHelps, an online fundraising and donation platform, just released its Giving Report for 2022. The results, while perhaps not surprising, are cause for alarm, the organization says.

The report contains several key findings, but all signs point to a continuing decline in the number of Canadians who donate, which spells trouble for many charities who rely on funding for the important and often life-saving services they provide.

Here are key insights for you to know.

More people will come to depend upon charitable services in the future

CanadaHelps predicts that one in four Canadians (26 percent) expect to use or already use charitable services to meet their basic needs in 2022. The number currently sits at 11 percent, according to their data.

The effects of inflation and a long-lasting pandemic have taken a financial toll on many people, and the report shows that roughly four out of five Canadians expect that it will continue to negatively impact their finances in 2022.

Charitable donations have been – and continue to be – on the decline

The last three annual reports published by CanadaHelps have shown a steady decline in the amount of charitable giving. In a statement they released, CanadaHelps said, “One in four Canadians…expect to give less in 2022 than they did in 2021, challenging the capacity of charities to meet growing demand.”

The rate of decline in giving was also much greater for high-income earners (those making above $150,000 per year). From 2019 figures, giving went down by 3 percent in 2020 and 3.3 percent in 2021.

Donations from those making between $20,000 and $99,000 annually have also been dropping. These earners donated 1 percent less in 2020 than in 2019, and this number dropped down to 1.5 percent less in 2021 (the CanadaHelps team did not provide exact numbers). 

“Last year, we projected that total giving in 2020 [would fall] by 10 [percent],” said Marina Glogovac, president and CEO of CanadaHelps, in the executive summary of the report. “An additional decline of 2 [percent] in 2021 may prove catastrophic for many charities.”  

The ‘giving gap’ is widening

The ‘giving gap’ is used to describe the decline in the number of donors and the increasing reliance on a smaller group of donors. In Canada, the burden of financial giving is still on an older population, while the report demonstrated that the overall number of Canadians who give “has continued its steady decline.”  

In 2019, just 19 percent of tax filers claimed donations, as opposed to 25 percent in 2006.

“When older Canadians are no longer able to give and if younger generations do not increase their giving, charities will need to make up for this gap,” the report warns.

If trends continue, organizations all across Canada will experience increased funding shortfalls, when the mainstay of charitable giving – older donors – can no longer give.

Social services was the hardest-hit sector

While there was a decrease in donations to all categories of charities, social services organizations were hit the hardest in 2021.

Many of these were providing much-needed frontline services, like food banks or healthcare, to Canadians during the pandemic and experienced big increases in 2020.

However, these organizations “saw the greatest decrease… as giving shifted back to closely mirror the distribution of giving to charitable categories prior to the pandemic,” said Glogovac. 

The pre-pandemic report showed that educational and environmental charities had the greatest decrease in donations. During the pandemic, organizations focusing on international issues and education experienced the lowest donation rates. 

Younger Canadians are more digitally engaged – and they expect digital engagement from charities

CanadaHelps notes that younger Canadians are more tech-savvy, engage online more frequently, and therefore expect digital engagement from charities. 

In the report, when respondents were asked to consider which factors played a role in their support of an organization, 56 percent of Generation Z participants agreed that being able to “learn about, engage with, and give to the charity online” was important (as opposed to only 41.1 percent of Boomers). 

This highlights the need for charities to increase their access to technology and digital capacities if they want to reach younger generations.

The issues that charities often address “are multi-faceted and there are opportunities to tell nuanced stories and reframe messaging to connect with the interests of younger people,” said Glogovac.

There’s a good reason for charities to engage digitally – CanadaHelps data shows that younger Canadians have more trust in charities and intend to give when they are able to afford it. 

“[Seventy-one percent] of Generation Z and 66 [percent] of Millennials [say] they strongly agree that they trust charities and their services,” Glogovac told Future of Good in an email. “In addition, 23.7 [percent] of Generation Z and 17.2 [percent] of Millennials report that they plan to give in the future. This gives hope for the future, but it means it is more urgent than ever for the sector to begin engaging young people in their cause.”

Younger Canadians are giving less financially – but are donating in other ways

“While fewer younger Canadians make financial donations, many donate and express their generosity in other ways,” said Glogovac. “This can include volunteering, fundraising, attending protests, or spreading the word about a charity or cause.”

Younger Canadians often do not have the means to contribute financially to causes they care about, as inflation rates rise, wages remain stagnant, and the affordability crisis in Canada continues. So they are finding other ways to show their support.

Other than volunteering, they are also heavily involved in signing and sharing online petitions, as well as creating and posting engaging content over a variety of mediums and social platforms.

“I think there is huge potential for younger Canadians to volunteer more,” Glogovac told Future of Good, “especially as charities are increasingly looking for digital skills to augment their own capacity and young people, as digital natives, bring this expertise.”

Giving in the future may trend towards newer, more innovative ways, including cryptocurrency donations

Research from CanadaHelps also demonstrated that donations of cryptocurrency are increasing, particularly among younger donors.

In the last 12 months, 4.5 percent of Generation Z donations and 6.1 percent of Millennial donations were in the form of cryptocurrency. Younger donors are also more likely to give online and to seek out more innovative ways of giving, including donating securities (financial assets that can be traded).

However, because crypto as a form of giving is still novel, exact projections on its importance to the future of fundraising are unclear.  

“Cryptocurrency is still relatively new,” said Glogovac, “and it is even newer to be able to easily donate it to charities so we’ll need more time to understand the impact it can have. [But many] Canadians are holding wealth in the form of cryptocurrency. So it is reasonable to expect this form of giving to grow as it becomes increasingly easy to do so.”

There is a generational divide on the causes that are deemed most important

Disaggregated data shows that different generations value and support different causes. Younger generations support issues including climate change and racial justice.

Data retrieved from Cause Funds, a CanadaHelps platform where donors can support the collective work of charities addressing a specific cause, also shows where different generations put their money.

“Our data shows that younger donors gave generously to these funds for timely issues like COVID-19 relief, but also engaged with social justice focused funds like our Black Solidarity Fund, Asian Solidarity Fund, and two funds supporting Indigenous Peoples,” said Glogovac.

Conversely, for older Canadians, medical research and treatment, senior care, and poverty were the top causes.

Giving to Indigenous People’s organizations is on the rise

While it has already been noted that giving declined across almost every cause, “the one standout is the Indigenous Peoples category,” said Glogovac, referring to charities which serve Indigenous communities.

According to CanadaHelps data, this category had the highest online giving increase in both December 2019 and December 2020.

Indigenous Peoples is also the only charitable category to have experienced an increase in donations in December 2021. 

Mental health was a top cause across all generations

The report also cited data on variances in cross-generational giving, and it turns out that mental health is a top-five cause. It is also the only cause supported across all generations. 

This may not come as a surprise, as discussions surrounding mental health have become more prevalent and open in recent years. As well, Canadians certainly felt the mental toll of a prolonged pandemic and anxiety over the unknown future. As Canadians continue to forge ahead through the uncertainty, hopefully mental health could remain a top giving priority.

While the findings in this report are cause for concern, all hope is not lost. Charities will need to improve their digital engagement, connect with younger Canadians, and provide innovative ways for donors to give in order to keep up with the changing landscape of giving.