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COLUMN: The changing face of philanthropy in Canada
In the aftermath of the devastating Philippines typhoon, many Canadians may question whether they can really make a difference in the world by supporting a charity.
Paradoxically, we are at the traditional time of year when people focus on charitable giving, a time when charities across the country try to attract donors to support their cause.
This is a good time to reflect, to consider why philanthropy matters in today’s society.
We know that people feel good when they help other people. It doesn’t matter whether they give money, time or advice — it’s the giving that counts.
Brain scans using MRI show the act of giving releases dopamine — a powerful neurotransmitter — into the body of the donor. Dopamine controls the brain’s pleasure and reward centres. Thus, giving literally makes you feel good.
A lot of people may be feeling good these days. Canadians give $10 billion to charities every year. This amount is growing, albeit slowly, at about 1% annually. What is growing is the number of charities. It’s estimated there are 86,500 charities across Canada and 3,500 new ones are created every year.
This increase is a clear indication of need in the community. For example, food bank usage is at near record levels. More than 833,000 people used a food bank in Canada last March. Even more disturbing is that one in eight of those food bank clients was employed at the time.
The ranks of the working poor — those who have a hard time making ends meet despite having a job — are swelling. This puts increasing strain on the resources of charities to meet the growing need.
At the same time, more charities are going after a pool of donations that is not growing as fast as demand, nor is it outpacing growth in expenses. There is considerable debate as to the cause but the result is clear: It is costing Canadian charities more than ever to raise money. Twenty years ago, it cost 18 cents to raise $1; now, it costs Canadian charities 35 cents or more to raise that same dollar.
Competing for program money is one of the greatest challenges facing the non-profit sector. This competitive environment has prompted organizations to pursue riskier fundraising strategies, like using celebrity spokespeople, or retaining expensive fundraising consultants. If these fail to produce cost-effective results, the charity risks alienating long-term donors and eroding its most valuable asset: public trust.
Charities also face pressure from another quarter: their donors. Much of modern philanthropy today is very public. Donors want to give for good reasons but also want public recognition of their giving. Modern donors often want to play a meaningful role in the distribution of their gifts. No longer content to wait for the benefits to appear, they want to see the results of their generosity — they want metrics and they want them now.
Dedicating hospital wings, theatres, study halls or stadiums is part of this trend, and another way for charities to acknowledge high-profile giving. It’s a reality that will continue, though it’s a double-edged sword.
Increasing publicity around large donations can alienate smaller donors and dilute the pride they feel. Their reaction is “I can’t possibly match that” or “What do they need my money for?”
The explosive growth of social media also appears to be affecting donations. A recent study on “slacktivism” from the University of BC shows that when people declare support for a charity publicly through social media, it can actually make them less likely to donate to the cause.
But it’s not all doom and gloom. There are many things to look forward to and to celebrate. The new generation of young donors is far more optimistic about the future than their Baby Boom counterparts. They are also more generous with their time and money, and more likely to sit on boards and committees than previous generations. They trust charities more than anyone, with 83% of those under 25 expressing “a lot, or some” trust, compared to 76% of those over 65.
It’s unfortunate that it takes a natural disaster for people to contemplate the need for charitable giving. Whether the need is in your community or halfway around the world, even a small gift can have a big impact. The act of giving can be its own reward. Giving may feel good, but giving back — and touching the lives of others — feels even better.
Kevin McCort is president and CEO of Vancouver Foundation (www.vancouverfoundation.ca).