Decline in donations requires decisive action by charities, government to protect crucial services

This column is an opinion by Marina Glogovac, president and CEO of CanadaHelps, a non-profit foundation that provides fundraising and donation technology to charities and donors. She has been a technology and media executive for more than 25 years, including roles at Kobo, Lavalife and St. Joseph's Media. For information about CBC's Opinion section, please see the FAQ.

At the outset of the pandemic, some charities quickly adapted to provide services in safe ways, and launched things like digital donation forms and virtual events to fund their work. The success of those efforts contributed to the increase in online charitable donations seen last year, but overall giving trends tell a different story and alarm bells are ringing.

While Canada Revenue Agency (CRA) data on charitable giving in 2020 will not be available for some time, CanadaHelps has projected an overall 10 per cent decrease that drops it to 2016 levels. This puts vulnerable Canadians who rely on charities at risk.

This significant drop can be attributed to many factors, from unemployment and economic uncertainty, to the cancellation of in-person fundraising events. However, the pandemic has also exacerbated existing trends. The 2021 Giving Report indicates that fewer Canadians are donating to charity, and of those who do, Canadians aged 55-plus give twice the amount as those aged 25 to 54.

If Canadians, governments, and charities don't take action to address this trend, the loss to our communities will be felt for years to come.

Charities are essential to communities and quality of life in Canada. They are on the front lines, running food banks, shelters, counselling services, and youth programming. They are doing invaluable medical research, creating art, teaching kids to read, supporting new immigrants, caring for seniors, helping families through illness, helping survivors of abuse start new lives, protecting the environment, and so much more.

Meanwhile, charities are still seen by many as simply intermediaries for transferring gifts from the wealthy to the needy. Yet a 2019 Statistics Canada report showed the charitable sector contributes approximately 8.5 per cent or $169 billion to Canada's gross domestic product (GDP). The sector also employs about 10 per cent of the country's full-time workforce.

The services provided by charities also take a significant burden off governments at all levels, and are vital in building a fair and inclusive Canada.

There are many positive steps the federal government, which serves as a regulator through the CRA and licensor through the Charities Directorate, can take to help support Canada's charitable sector.

Currently, for example, there is no home in government to advocate for and strengthen the impact of charities. In contrast, there is a minister responsible for small business. And the Business Development Bank of Canada (BDC), a Crown corporation, supports Canadian businesses through financing, advisory services, and capital.

It's time to have a Minister for Charities, and a BDC equivalent to support the sector.

There are also steps charities need to take.

The decline in giving and the chronic under-funding of charitable work will continue to grow if charities cannot engage younger donors in their work. Many don't have the connection to charity "brands" that their parents have, and organizations need to work to win their support.

Younger Canadians expect charities to be digitally sophisticated, for example. They expect the same sorts of smooth user experiences, convenience, transparency, and data insights that they get elsewhere in today's digital world. Yet many charities struggle to respond to these expectations because most haven't been investing in their digital infrastructure. The pandemic's challenges have made this type of investment more important than ever.

Digital transformation goes far beyond online fundraising. It needs to be integrated into the organization's strategy and culture, and ingrained in every aspect of a charity's operations, from service delivery to staffing and development.

This enables rigorous measurement and evaluation, helping organizations identify needs, measure their own impact, and determine areas for continuous improvement.

The sector cannot be successful if it continues to be starved of the resources needed to modernize, work more efficiently, and operate effectively in the digital era. We must better enable them through government support and funding, but also challenge charities themselves to take on the hard work of becoming data-driven digital organizations. 

To make this critical transformation, charities need access to high-quality resources and training programs — such as those available to small businesses through Digital Main Street, an initiative that is partly government funded.

The federal budget's $1.4 billion Digital Adoption Program to help small and medium-sized businesses incorporate new digital technologies should absolutely apply to charities as well.

And the mindset of donors, funders, government, and charities themselves needs to change. Charities are still largely evaluated through oversimplified financials and overhead calculations. While it will take time and investment to better measure social impact, we must shift to evaluating them based on reported outcomes and the results of strategic programs designed to create systemic change.

Charities are critical to Canada, their success is our collective success.

• This column is part of CBC's Opinion section. For more information about this section, please read our FAQ.