Back to School Edition: Bridging the Giving Gap
The decline in charitable donations is a pressing issue that affects communities at home and worldwide. Just as students prepare for a new school year, donors should ready themselves with the information and tools needed to recognize the factors contributing to a growing “giving gap” in order to make a meaningful impact with their charitable giving.
The “giving gap” is a term referring to the threat charities and society face as the number of donors continue to shrink, while demand for charitable services are increasing. Since the start of the pandemic, the giving gap has only widened as more Canadians turned to charitable services to meet basic needs like shelter, food, and clothing. In fact, the 2023 edition of the Giving Report, which is an annual report published by CanadaHelps on the state of the charitable sector in Canada, shared that 1 in 5 (about 22%) of Canadians say they plan to access charitable services to meet essential needs. Unfortunately, coupled with challenging economic factors like high inflation, the Giving Report also indicated that 20% of Canadians had planned to reduce their giving, while only 13% intended to increase their giving. But there is light at the end of the tunnel and certainly things you can do to help address this giving gap.
Below are a few proactive steps to make a positive impact:
- Set clear philanthropic goals: Define your charitable objectives and identify the causes that matter most to you. Having a clear mission will guide your giving and help you make strategic decisions.
- Research and Due Diligence: Conduct research on charitable organizations and causes you intend to support. Ensure they align with your values and have a track record of effective use of donations.
- Diversify Giving Strategies: Explore different ways to give, such as establishing your own charitable fund through a donor advised fund program, which can help facilitate tax-effective donations like in-kind donations of publicly-listed securities. This strategy and use of a charitable structure can maximize the impact of donations and allow you to quickly and easily adapt to changing circumstances.
By setting clear goals, conducting research, diversifying giving strategies and staying adaptable, you can ensure you are directing your charitable dollars in an effective way, despite the challenges of the current philanthropic landscape. With dedication and thoughtful planning, we can help bridge the giving gap and create a brighter future for generations.