Charitable donations are up, even as tax receipts continue to decline: Statistics Canada
Why It Matters
Fewer Canadians are claiming charitable tax credits. Finding out why could help charities better understand donors.
Charitable donations in Canada rose by 11.5 per cent in 2021, even as the number of Canadians claiming charitable tax credits continued to decline, according to recently released Statistics Canada data.
Tax filings from that year reveal charitable organizations received more than $11.8 billion, up from $10.6 billion in 2020. The median donation made by Canadians also increased by 5.9 per cent to $360.
However, fewer than 5 million people claimed a charitable tax credit in 2021, a decrease of 3.2 per cent — something the government agency said may be linked to “the increased use of crowdsourcing platforms and other methods of funding that do not provide donation receipts.”
But some in the charity sector question the possibility of a link between decreased tax receipts and crowdfunding platforms, with at least one expert noting Canadians have always donated to causes — such as local fundraisers or families facing hardship — without the expectation of a tax document. These small campaigns have now moved to online platforms.
“I’m not saying it’s not possible, but I think there are other factors at play here,” said Nicole Danesi, senior manager of public relations for CanadaHelps, Canada’s largest online fundraising and donation platform.
“One factor is that not everyone claims charitable tax receipts on their taxes, which is a missed opportunity for many Canadians.”
A higher median donation could be linked to larger donations being made by older donors. “It sort of speaks to a smaller number of older donors increasing their donations,” Danesi said.
Older Canadians give financially at twice the rate of younger Canadians, she added, creating a “giving gap” that could spell trouble down the road. “Essentially, everyone younger than baby boomers are not keeping pace, which could be a concern in the future,” said Danesi.
The newly released numbers do show that COVID-19 didn’t stop Canadians from making charitable contributions, but the impact of the pandemic on charitable donations can’t be teased out from factors such as age, community, employment status, family structures, ethnic origin, economic situation, or global events, said Dominique Pinard, who heads Statistics Canada’s Centre for Income and Socio-Economic Well-being Statistics.
The data also found men who filed tax returns donated an average of $2,970, while women averaged $1,760 in charitable donations. But Pinard said it’s not currently possible to evaluate how the family structure of 2021 tax filers might have impacted those numbers. She noted that in 2020, a higher proportion of women made donations, even though men donated more money on average.
“Further investigations would be required to understand the difference between men and women,” she said, but added it’s possible men claim deductions to “optimize the tax credit of the family as they usually have higher income than women.” Others point out this gendered donation gap reflects the gendered wage gap more generally.
The data does have limitations, Pinard said, noting only donations made to organizations registered with the Canada Revenue Agency are included in information collected through tax filings.
“It does not include late tax filers and donations where no tax slips were issued,” she said. “Organizations not registered to the Canada Revenue Agency would not be able to issue slips for donations received.”
Small, one-time donations are also less likely to be recorded, said Pinard.
Regionally, little has changed between 2020 and 2021 when it comes to how Canadians donate to charitable causes. Nunavut continues to record the highest median donation and the lowest proportion of tax filers making contributions, as it has since 1997.
Manitoba has the highest proportion of tax filers making donations and its third largest city, Steinbach, has Canada’s highest median donation at $2,270 — among census metropolitan areas and census agglomerations — followed by the province’s fourth largest city, Winkler, with a median donation of $1,820.
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