Fundraising for International Development in Canada

April 05, 2009 | By: .(JavaScript must be enabled to view this email address) Mark Blumberg
Topics: Canadian Charity Law, Global Giving

I recently read “An Analysis of Canadian Philanthropic Support for International Development and Relief” which was prepared in 2002 by the Canadian Centre for Philanthropy (now Imagine Canada).  The report was paid for by the Aga Khan Foundation and has some interesting observations with respect to donors who give to international development causes.  Anyone who fundraises for an international development organization would probably find the report interesting.

The report “An Analysis of Canadian Philanthropic Support for International Development and Relief” was prepared by Don Embuldeniya, David Lasby, and Larry McKeown

The Executive Summary reads as follows:

Canadians provide only modest philanthropic support for international development and relief efforts. To date, there has been surprisingly little information about the organizations that engage in international philanthropy and the characteristics and behaviours of donors who support these organizations. This has made it difficult to assess why philanthropic support is so modest and whether it can be increased. This report, commissioned by the Aga Khan Foundation Canada, provides an analysis of Canadians who donate to international development and relief causes and of Canadian charities involved in international activities. The first part examines international donors, using information from the 2000 National Survey of Giving, Volunteering and Participating (NSGVP). The second part examines the characteristics of international charities, using information from Canada Customs and Revenue Agency’s (CCRA) 1997 T3010 Registered Charity Information Return. The report concludes by suggesting research that could assist efforts to stimulate the capacity of international charities to carry on their work and attract more giving to international development and relief causes.

Our analysis shows that, relative to their support of other charitable causes, Canadians provide only modest amounts of support to international development and relief efforts. Although 78% of Canadians (aged 15 and older) donate to charity, only 5% donate to international organizations and these organizations receive only about 3.4% of the total value of all donations. In addition, the bulk of these donations comes from the top 25% of international donors (about 300,000 Canadians) who provide about 83% of the total dollar value of all donations to international development and relief causes. Nevertheless, there appears to have been substantial growth in the amount of donations provided to international organizations between 1997 and 2000, which far surpassed the overall growth in charitable donations.

International organizations appear to attract “super donors”. Donors to international organizations tend to support a variety of causes and give larger donations than other donors to all the causes they support. Compared to other donors, these donors tend to respond through mail solicitation, places of worship, television and radio appeals, and donors approaching organizations on their own. They are more likely than other donors to plan their donations in advance and to donate regularly to the same organizations. They are also less likely to identify any barriers that prevent them from giving.

The international donor is more likely than other donors to be religiously active, older, better educated, to have a higher household income, to be female and married. They are more likely to cite religious motivations for donating and to report giving because of a feeling that they owe something to their community. International donors are, however, also more likely than other donors to report that the tax credits they receive for their donations play a role in their decision making about giving. This is not particularly surprising in light of the size of their donations.
International organizations appear to have attracted the support of a set of donors that have a number of appealing characteristics from a fundraising perspective. They appear to be highly motivated, in part, for religious reasons, and to be willing and able to make relatively large donations in support of the causes they believe in. These donors are also likely to be loyal and consistent supporters.

Our review of available data on the size and scope of charitable organizations working in the area of international development and relief shows that, compared to other causes, there is only a modest level of support for international development. Only about 2.5% of Canadian registered charities had some international development and relief involvement in 1997. Altogether, these international charities received $1.9 billion in revenues. However, most of the revenues go to a small number (1.9% or 34) of large charities that account for 69% of the total revenues for the international sector. Their most common area of activity is in the delivery of social services and in literacy/education/training. In terms of geographic focus, they are most likely to be involved in Latin America and the Caribbean.

Most of the revenues for international charities come from gifts, which account for 41% of revenues for the sector, followed by government sources of funding (31%). Despite the fact that 40% of all international charities engaged in one or more business-like activities (e.g., gift shops, parking, banquet facilities), this accounts for a very small (10.5%) of total income. Based on available, yet dated, data on the charitable sector as a whole, it appears that international development organizations receive substantially less funding from government than do other types of charities (Sharpe, 1994).

Much of the international sector is comprised of small organizations that have little or no paid staff. Almost 9 in 10 (87%) of international charities had revenues of less than $1 million in 1997 and together they account for only 8% of the total revenues of the sector. Less than one half (46%) of the international charities report having paid staff.
The report concludes that there is modest but not insubstantial support for international development and relief efforts in Canada, and that it appears to be growing. However, on the organizational side, international development activity appears to be dominated by a small number of large organizations.

A number of suggestions are provided regarding the improvement of support for international development and relief. We suggest that efforts should be made to broaden the support these organizations receive from a small core of “super donors” who support international charities as well as a variety of other causes and who give larger amounts than other donors. On the organizational side, efforts should be directed to improve the capacity of the almost 9 in 10 international charities that are operating on revenues of less than $1 million per year with little or no paid staff. Such efforts should focus both on improving fundraising capacity and improving government support.

Finally, a number of recommendations for further research are made. These include: conducting research on core-supporters of international organizations and their motivations; doing a comparative analysis of the other types of causes that core-supporters donate to and the reasons for such support; assessing the stability of support from core-supporters; assessing further the sources of funding for international organizations; assessing the competitive pressures they face in the area of fundraising; and better describing the programs and services they provide.


The report is located at:

http://nonprofitscan.imaginecanada.ca/files/en/misc/canadian_philanthropic_support.pdf

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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.

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