While Canadians are debating whether there has been a drop in donations in Canada (I say not when you exclude reductions in abusive schemes) while others say perhaps a 5% drop in donations, there was a shocking article recently in the Chronicle of Philanthropy on US giving. First of all in Canada over 2/3 of all charity revenue is from government and only about 10% is from private donations and fundraising. In the US only about 1/3 of their revenue is from government leaving US charities far more vulnerable to fluctuations in giving. According to the article “In 2008, the IRS says, Americans wrote off $172.9-billion in charitable contributions, a 10.6-percent drop from 2007. Its estimates for 2009, released this month, project a 14-percent drop, to $148.6-billion.” A 10 percent drop followed by a 14 percent drop - that is huge and the fact that US charities are far more reliant on funding even more devastating. The US was hit with a triple storm of decreasing public confidence in charities, bad economic times, and increased need. In Canada we just jumped onto the chicken little bandwagon of the sky is falling when in fact it was not - government funding was increasing and donations were stable - yes need was greater and it would be better to get more funding for these important needs but when we try to exaggerate the fiscal situation in Canada for charities it undercuts the credibility of the charitable sector.
Here is the Chronicle of Philanthropy article “Americans Gave a Lot Less in the Recession Than Experts Predicted”
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Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.