By Todd Cohen
Philanthropy is big business in Canada, and it is growing.
The nation’s nonprofit and voluntary sector, second-largest in the world, has more than 161,000 nonprofits with combined annual revenues totaling $112 billion, according to Imagine Canada, formerly the Canadian Centre for Philanthropy, a research and public-policy group in Toronto.
The sector accounts for 6.8 percent of Canada’s gross domestic product, employs 12 percent of its economically active population and counts on private giving for 9 percent of total income for nonprofit and voluntary organizations and, counting volunteer time, 20 percent.
After growing steadily for years, individual donations overall climbed to more than $6.5 billion in 2003 from just over $4.9 billion in 1998, with the average donation growing to $1,165 from $894.
But the number of donors has leveled off, growing by only 100,000, to nearly 5.6 million, from 1999 to 2003.
And private support does not run deep, Imagine Canada reports: While more than three in four Canadians give to charity each year, and more than one in four volunteers, only 9 percent of Canadians account for 46 percent of all donations and 40 percent of all volunteer hours.
“We believe much of the growth in giving over the past five years has been happening at the high end of donors,” says Michael Hall, vice president for research at Imagine Canada.
Canada does not tax estates, resulting in less effort than in the United States to find charitable tax shelters, Hall says.
But the government does let taxpayers halve their tax on capital gains on securities they donate to public charities.
An increase in that deduction in the late 1990s spurred an increase in large donations, Hall says.
The combination of changes in the economy, population and tax rules has helped feed growth in family foundations, community foundations, the number of big banks offering philanthropic services to wealthy clients, and membership in the Canadian Association of Gift Planners, experts says
Marvi Ricker, vice president and managing director for philanthropic services for the private bank at BMO Financial Group, a Toronto-based national bank, says individual Canadians have roughly $2 trillion available for investment.
And while the government traditionally has shouldered the cost of health care, education and social services, she says, big increases in the costs of those programs have led to cuts in the share of those services that government supports, and to growing demand on private charity.
“So everyone is expected to contribute,” she says.
Other stories in the series:
Part 1: Canada gears for $1 trillion transfer.
Part 3: Nonprofits in Canada aim to engage donors.
Part 4: Foundations growing in Canada.
Part 5: Financial-services firms in Canada target philanthropy.
Part 6: Nonprofits in Canada shifting focus to donors.