Every year I make some comments on Statistics Canada’s release of tax data. While in this note, I will discuss their normal release, we have also posted some custom data that we have received from Statistics Canada that are discussed elsewhere for individual donors and also aggregated by family.
This year Stats Can used the somewhat provocative title of Fewer charitable donors, less money donated in 2022. The reason I say provocative is that the charity sector has revenue of about $342 billion. The donations that are claimed on tax forms and analyzed by Stats Can is only a tiny part of the revenue of the sector. Using my calculator I think they are discussing about 3.3 percent of the revenue of the charity sector. Hard to draw too many important conclusions about generosity, caring and the health of the charity sector by only looking at 3.3 percent of the revenue. Many people may equate donations with charity revenue, not realizing that, for example, most charity revenue comes from the three levels of government in Canada. The revenue of the charity sector was actually $8 billion more in 2022 compared to 2021.
Stats Can looks at the data from the T1 returns. So it does not include the T2 return, which is gifts from Corporations. More importantly, it does not include funds donated to actual registered charities, then receipted, but not claimed on the T1 personal returns, which is many billions of dollars. Also, it obviously does not include other revenue of charities, including donations which are not tax receipted and other sources of funds for charities (like earned income and government funding).
The high-level summary from Stats Can is as follows:
“Just under 5 million Canadian tax filers (17.1% of all tax filers) declared making charitable donations in 2022, 0.3% fewer than a year earlier, despite the number of tax filers increasing 3.0% year over year. The total amount donated fell for the first time since 2016, decreasing 3.1% to $11.4 billion. This decrease in total donations followed the previous year’s increase of 11.5%, the largest since 2005..”
So during COVID there was a jump in donations and it only came down a little bit in 2022. In light of the inequality in Canada, the cost of living crisis, it would not be surprising if people who cannot afford rent, or child care, or food, gave less to charities.
At least Stats Can has provided some better context this year than last year as we reproduce below.
The caveats they put out are:
Note to readers
In this release, charitable donation data are based on a preliminary version of the T1 Family File (tax filer data).
Statistics on changes in amounts between years do not take inflation into account. The Consumer Price Index rose 6.8% in 2022.
The median is the value in the middle of a group of values (e.g., half of people make donations above this value and half of people make donations below this value).
All data in this release have been tabulated according to the 2021 Standard Geographical Classification used for the 2021 Census.
Canadians contribute in many ways to charitable organizations. This release reports only on donations to charities and approved organizations for which official tax receipts were provided and claimed on tax returns. To verify whether a charity is registered under the Income Tax Act, tax filers can consult the charity listings available on the Canada Revenue Agency website. It is possible to carry donations forward for up to five years after the year in which they were made. Donations reported for the 2022 taxation year could include donations that were made in any of the five previous years. According to tax laws, tax filers are permitted to claim both their donations and those made by their spouse to receive better tax benefits. Consequently, the number of people who made charitable donations may be higher than the number who claimed tax credits.
Charitable donations made through crowdfunding platforms for individuals or organizations not linked to charities registered under the Income Tax Act are not captured in this data release. Moreover, several charitable organizations will not issue a tax receipt for small donations. Other small donations, such as those made by text message without issued tax receipts or donations at checkout counters of retail stores, are also not covered.
Another source of donation data at Statistics Canada is the General Social Survey (GSS) on Giving, Volunteering and Participating. This survey collects information on all monetary donations reported by individuals, regardless of whether the donation resulted in a tax credit. For 2018, data from this survey revealed close to $11.9 billion in total donations by Canadians, while donations by individuals, as reported on their tax forms, totalled just over $9.9 billion (for comparability, the territories were removed from the tax-reported amount). The large difference in median amounts reported also points to the fact that many small donations are not captured in the tax data.
The GSS also focuses on volunteering. While the youngest age group (15 to 24 years old) had the lowest participation rate with respect to charitable donations, this same age group had the highest participation rate in volunteer activities.
The Future of Good coverage by Gabe Oatley was far more useful than Stats Can’s website and their article was entitled After a banner year in 2021, Canadian giving ‘normalizes’ in 2022 — and four other findings from new federal donation data. For example they noted “… Canadians donated $11.4 billion, a three per cent decline from 2021 but still $1.1 billion more than was claimed in pre-pandemic 2019.”
Also they note:
Housing prices may have contributed to the donation drop
Rising housing prices may have also influenced the decline in donations in 2022, said charity researcher Steven Ayer.
In 2022, donors in B.C. and Ontario — the two provinces with some of the most significant increases in housing prices — cut back their giving most compared to the year prior.
Tax-receipted donations by B.C. residents decreased by 12 per cent in 2022. Donors in Ontario decreased tax-receipted gifts by six per cent.
By contrast, donors in two provinces where housing price increases have been more modest — Alberta and Quebec — saw donation rate increases (eight per cent and seven per cent, respectively).
Drawing a conclusive trend isn’t possible without more data, but initial indicators suggest housing costs and donations are linked, Ayer said.
So I guess if we want to maintain the very high inequality in Canada it is going to be harder to get people to donate or they will donate less. Instead of harping on why donations are down we should focus on having a more egalitarian society where at least basic needs are taken care of.
Here is some earlier coverage of Stats Can and their annual donor information:
Statistics Canadas’ numbers for 2021 donations have been released and the expected media coverage ensued (2022 data)
Statistics Canada report on charitable donors in 2019 (2021 data)
Stats Can releases 2018 tax filer charity donation information for Canadians (2020 data)
Stats Can releases information on charitable donations and it is as meaningless as always (2019 data)
Statistics Canada says total Canadian donations down in 2016 (2018 data)
Did charitable giving in Canada really hit a 10-year low? (2016 data)
Statistics about giving tell you so much and so little! (2015 data)
Statistics Canada’s “Note to readers” on charitable giving is more important than the numbers (2014 data)
Statistics Canada has released further information on Canadian donors for 2011 (2013 data)
StatsCan stats on charity sector interesting – but notes even more interesting (2012 data)