Number of charity donors drop for 12th straight year in Canada

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Rowena Veylan says new tax filing data confirms what fundraisers have told her – finding new donors is becoming increasingly challenging. 

In 2022, for the 12th year in a row, fewer Canadians claimed a charitable donation tax credit than the year before, according to new data from Statistics Canada.

“Alarm bells should be going off,” said Veylan, a fundraising educator. 

In the early aughts, about 25 per cent of Canadians who filed their taxes claimed credit for at least one donation. 

In 2022, that rate dipped to just 17 per cent — the lowest recorded since 1997. 

While an eight per cent drop might not seem significant, the cumulative total of losing all those donors over two and a half decades is gigantic, said charity researcher Steven Ayer. 

If Canadians continued to give early 2000s rates, he said there would have been about 7.4 million donors claiming a tax credit in 2022 — not the 4.9 million who did. 

Since 1997, the number of tax filers in Canada has increased by 41 per cent, but the number of Canadians claiming a charitable donation tax credit has dropped six per cent. (Graphic: Gabe Oatley/Future of Good)

The risks of relying on big donors

For years, many charities have made up for their declining donor base by increasingly relying on significant gifts from affluent Canadians. 

From 1997 to 2022, despite the drop in donors, the total value of all tax-receipted donations grew by about 170 per cent — from $4.3 billion to $11.4 billion. 

Charities have been grateful for these significant donations, but relying on them too heavily comes with risk, said fundraising consultant Elizabeth Gomery. 

Small donations are unrestricted and can fund a charity’s operations, whereas large gifts tend to be directed toward one area of a charity’s work, she said. 

“What you end up finding yourself with is…a hospital that can’t keep its lights on, but with a golden cancer ward,” she said. “You don’t want that.” 

The need to try to snag more big gifts may also put smaller charities at a disadvantage. 

Organizations with the size and infrastructure to maintain donor relationships have raised more than those without the same heft, said Imagine Canada CEO Bruce MacDonald. 

In 2013, Canada’s top 100 charities accounted for 27 per cent of the total value of tax-receipted donations. 

In 2022, that figure jumped to 33 per cent, according to Imagine Canada’s analysis of T3010 charitable donation data. 

The need to increasingly rely on larger donations is particularly concerning for BIPOC organizations — those led by and focused on supporting Black people, Indigenous people and people of colour, said Veylan. 

While these organizations have been getting a good spotlight over the last several years, they also tend to be smaller, putting them at a fundraising disadvantage, she said. 

Rationale for the donor drop

The scale of the donor decline and the consistent downward trend suggest multiple factors at play, said Ayer. 

They include systemic financial stress caused by rising costs of living, fraying social connections, decreased religiosity and declining trust in charities, he said. 

Older donors who have been the most reliable givers have also begun winnowing down the number of charities they support, facing inflation while living on a fixed income, said Gomery. 

It’s likely, too, that while some Canadians are giving, their donations just aren’t captured on their tax returns, according to experts. 

Younger donors who aren’t yet filing taxes or who aren’t motivated by the tax credit are likely not being captured in this dataset, said MacDonald. 

This data also doesn’t capture the thousands of donors giving on crowdfunding platforms that don’t qualify for a tax receipt, said Veylan.  

Strategies to stem the tide

Despite the pressing social need, experts say charities looking to build new connections with donors face stiff headwinds. 

Pandemic-induced isolation means reaching new donors is more costly than ever, said Ayer. 

Added to that challenge is that donors don’t want to contribute to an organization that’s spending a lot of money on fundraising, he said. 

Still, there are clear solutions, experts said.  

Charities should ask for money more often than just one solicitation in the fall and one in the spring, said Gomery. 

“In 2021, charities were asking Canadians to give at an unprecedented rate, and when they asked Canadians to give, Canadians gave,” she said. 

People commonly say that one of the reasons they don’t give is that they haven’t been asked, and we need to change that, said Gomery. 

Organizations also need to be more honest with their donors about the cost of fundraising, staff pay, and how essential the work is that they do, she added.

“Charities bear part of the responsibility for Canadians targeting their donations to the extent they are,” she said.

“Maybe by being a little less embarrassed and a little more forthright we can actually start having a really honest conversation about what the sector’s worth to our country.” 

Charities should also invest in reconnecting with their donors through in-person, virtual or telephone conversations and asking what motivates their giving, said Veylan. 

“It’s that age-old adage: Ask for money, get advice. Ask for advice and get money,” she said.  

The longtime fundraiser also recommends focusing on activities that build a network of engaged donors. 

Donors give when they feel like they’re a part of something, she said, and post-lockdown, people feel isolated and lonely. 

“You have an opportunity to build a community.”

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