Canadian Charity Sector – What the future holds?

Canadian Charity Sector 2020

Quick facts about the charity sector in Canada

There are over 86,000 registered charities in Canada.* Did you know that the charitable and not-for-profit sector contributes an average of 8.1% of the total Canadian GDP, which is approximately $151B?! Crazy, right? This sector employs 2 million people, and another 13 million Canadians are volunteering their time to non-profit organizations and charities. (SOURCE)

Now, who’s donating and why? “Donors, as a group, have become much older and wealthier. […]And they are donating because they care. The top three motivators include compassion towards those in need, personal belief in the cause, and the desire to contribute to the community. With that said, there is evidence that suggests donors are becoming more critical of charities and nonprofits. For example, the percentage of donors that feel they have trouble finding a cause worth supporting has increased, as has the percentage of donors concerned their money would not be used efficiently. (SOURCE)

*(as for April 2018)

Challenges non-profit organizations are facing

Unfortunately, the list of challenges is a long one.

Demand and capacity have increased for some charities and dropped for others due to physical distancing: 35% have seen demand increase, while 37% have seen it decrease. On the same token, revenue has declined an average of 30.6% since the onset of the pandemic, with 69% of charities reporting decreased revenue. (SOURCE)

It has been projected that charities will lose between $9.5 billion to $15.7 billion in revenue, and be forced to reduce staff by 117,000 to 195,000 in 2020 (SOURCE).

If you want to hear from people working in charitable organizations all over Ontario, and learn more about the challenges ahead, here’s a video you may find insightful:

Now, coming back to our list: What are the most significant challenges?

> Significant staff reductions
> Decreased volunteers engagement
> Earned income decreased (caused by limited services)
> Declines in donations and fundraising

Stress and uncertainty easily rank number one on this list.

Good news, bad news - What does the future hold?

You’re probably asking, is there any good news? Is this your 2nd cup of coffee of the day? Yes! We are living in a digital era, which means donations can be made over the web. With a click of the button, you can help support a local charity without having to leave your home. Alternatively, communication via mail is an option for those donors that prefer it, as well.

At this time, religious organizations still receive the largest proportion of donations (mostly from Canadian immigrants). Second or third-generation Canadians are less likely to support these organizations. The demographic of donors who support charities, in general, is quite fascinating (albeit not surprising). The Boomer generation, which has been the mainstay of the charitable sector for most of the last 30 years, is ageing. There is a limited amount of time left to tap into the philanthropic impulses of this age group, and it is unclear if younger generations will be willing, or able to take their place.

Research suggests that the average donation of people born between the early 1980s and 1990s is low, and is only really increasing at a very slow rate. This is a challenge, but it is not a lost cause. And although they give less than generations before them, young Canadians generally have positive attitudes towards charities. (SOURCE)

Interestingly enough, 54% of charities have transferred in-person programs online, and 42% have developed completely brand new programs in response to the need. It means their services are now available and easily accessible to younger generations. It might just be the sweet spot in a not so palatable time: offering easier ways for younger people to engage and give. After all, isn’t it young folks that will change the world?

This period really provides an opportunity to rethink everything. Ever heard the old adage: Necessity is the mother of invention? We know there will always be a need, we just need to get creative with how we fill it!

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