Guest blogger: Rick Hiemstra, Director of Research, The Evangelical Fellowship of Canada
We Canadians are a generous people, right? Maybe.
Statistics Canada’s (Statcan) 2007 study on giving and volunteering found that 84% of Canadians made a financial donation to charity in the 12 month period covered by the study. The reported value of the donations was $10 billion.
Last month Ipsos released survey results reporting that 69% percent of Canadians made a financial donation to a charitable organization in the last year, up from 65% in 2009. The Ipsos numbers certainly have Canadian giving moving in the direction a compassionate society would like to see, but they’re significantly out of line with the Statcan results. On the upside, though, it looks like most of us give – but that’s not what we tell Revenue Canada.
Revenue Canada’s numbers for same years tell a different story. In 2007, 24.0% of Canadians claimed for charitable donations when they filed their tax returns (significantly less than the 84% that told Statcan they gave) and the income tax claims only totalled $8.6 billion, not $10 billion. By 2009, the Revenue Canada number had fallen to 23.1% (significantly less than the 65% reported by Ipsos). The Revenue Canada rate of giving appears headed in the opposite direction to what was found by either Statcan or Ipsos.
What’s going on?
First to note is that every kind of survey data has a degree of error. A systematic kind of error in data is called bias. One kind of bias is called desirability bias. Desirability bias is the tendency for people to give the answers to questions that we think the surveyor wants to hear, or to provide the answers we think will make us look good. Is it a good thing to give to charity? Yes. Then it’s a pretty safe assumption that there is some desirability bias at work in the Ipsos and Statcan numbers.
Additionally, there are some altruistic folks who don’t want Revenue Canada to know about their good works and, therefore, don’t claim their charitable donations. Others may simply misplace the tax receipt and find it too much of a bother to chase down a replacement before they file their taxes. Still others make a series of smaller donations for which they might not seek tax deductible receipts. In these cases, there will be underreporting of charitable giving on tax forms.
Still, we’re dealing with about a 60% gap in the reported rate of charitable donations between survey data and tax data.
The real rate of giving is almost certainly lower than what Statcan reports and higher than what gets claimed on taxes, but the real rate likely hangs out closer to the taxman’s neighbourhood. Why? Two reasons. Cash back is a powerful motivator to make a claim for charitable donations. And, not wanting to look miserly is a powerful motivation to over report your generosity.
What difference does it make whether or not the numbers line up?
In the October 28th Globe and Mail the cover story title was “Ottawa looks to rewrite rules on giving.” Put quite simply data affects public policy. For years groups like Cardus and Imagine Canada have been advocating for more generous tax credits for charitable giving. The logic behind these efforts is that if people receive more back in tax credits then they will give more, which will help the charitable sector. This is where the reliability of the statistics comes into play because the impact of such a change depends on how many people give. It also depends on why people give.
While studies disagree about the rate of giving, they do agree that older Canadians give more than younger Canadians. In fact, education, age and religious participation are the key factors driving giving. The oldest living generation, the Builders, are noted for being strong givers and ardent volunteers. In spite of the constant sociological change that we observe around us, most assume that as people age into the next stage in life they will naturally assume the roles of the generation that has gone before them. Will Boomers give like the Builders? Will Millennials?
Higher rates of attendance at religious services also correlate with higher rates of charitable giving –for both giving to religious and non-religious charities. If religious observance in Canada continues to fall will the future of Canadian charities remain bright?
It also appears that in the near future governments, at all levels, will have fewer dollars with which to meet the charitable commitments we’ve come to expect from them. Governments currently directly provide two in five dollars that registered charities receive. If governments are forced to withdraw new space will open up for the charitable sector (churches included) to respond to societal need. Now is the time for a clear eyed assessment of charitable engagement and the motivations for charitable giving.
In 2009 Canadians claimed $898 million less in charitable donations than in 2007. The largest percentage drop in donations was for those between the ages of 25 and 34. Sociologists have concluded that giving is a learned behaviour that needs to be nurtured – it is a habit, but ‘not giving’ is also a habit. People who have a giving plan give more than those who don’t. As Canadians, we should be concerned that younger Canadians are scaling back their philanthropic habits.
Are we Canadians a generous people? Or, is our generosity slowly fading into the past? Whether you agree with Statcan, Ipsos or Revenue Canada is perhaps not as important as what you personally decide to do. Canada needs more givers giving more, and we need them now.