I have stopped caring about the numbers from Stats Can on charitable giving because they are so out of whack with reality. I think that the note to reader is more important than the numbers. If you would believe the Stats Can version of events Canadians are giving less. In 2011 they gave $8.5 billion and in 2012 they gave $8.3 billion which is a decline of 1.9% according to Stats Can.
See my emphasis below:
"Note to readers
Canadians contribute in many ways to charitable organizations. These data include only amounts given to charities and approved organizations for which official tax receipts were provided and claimed on tax returns. It is possible to carry donations forward for up to five years after the year in which they were made. Therefore, donations reported for the 2012 taxation year could include donations that were made in any of the five previous years. According to tax laws, taxfilers are permitted to claim both their donations and those made by their spouses to receive better tax benefits. Consequently, the number of people who made charitable donations may be higher than the number who claimed tax credits."
As an aside for obvious reasons our tax returns do not contain questions about whether you volunteer. However, surprising to me as 15 million or more Canadian volunteer there are no questions on the T3010 Registered Charity Information Return filed by charities that capture volunteering and its benefits, even if it is an optional question. This deficiency in the T3010 short changes Canadian charities that use volunteers.
The Stats Can numbers here only include donations to qualified donees (not donations to other non-profits) for which an official donation receipt is issued - many charities don't issue any tax receipts. Therefore they do not include non-receiptable amounts such as crowdfunding, remittances to developing countries ($15 billion per year from Canada), purchase of charity lottery tickets, corporate sponsorships. Thank you Karin for the reminder about crowd funding.
Furthermore and very importantly many people do not claim the amount of the receipted donations. Charities issued about $13.8 billion in receipts in 2011. Let us say $500 million are for scams ($300 million of which is "abusive charity gifting tax schemes" and let's say $200 million is fraudulent receipting) then that leaves over $13 billion in legitimate donation that are receipted by Canadian registered charities. Canadians only claim about $8.3 billion on their tax returns. What happened to the $5 billion? $5 billion is quite a big number.
There are many possible reasons. 1) no matter how good your record keeping most people will lose one or more receipts 2) many don't really know about the charitable donation benefits (how is that possible when I hang out with people who spend everything waking moment thinking about it!) 3) many don't really care about the $100 or $200 they will save so they forget about putting together the receipts and calculating the amounts and they of course can be forgiven with the hectic lives that we live 4) many gave under $200 and do not claim such amount. 5) Perhaps aliens (and US environmentalists) are donating to charity and getting receipts but they don't file tax returns! 6) Perhaps some people are really giving charitable donations out of love for mankind and they don't want others involuntarily to have to support their choices. Any way let me know if you think of any other reasons that there is such a big discrepancy.
Some other things that the Stats Can numbers do not reflect include how much is money that is being "donated" to charities and put into either private foundations controlled by the donor and donor advised funds for which the donor gets to direct those funds. While some of these donors intend to disburse the funds quickly - others have little intention of doing so. Some will make charities work very hard to get any of their pennies and in reality the real donation has yet to be made. In other words if $10 million is transferred from a personal investment account to their private foundation in many cases operating charities may see little of those dollars. Some people don't care. They would argue a donation is a donation and that pool of funds will one day have to be used for charitable purposes. But if you are concerned with public benefit and impact then this is a concern. Furthermore, how much of the funds donated are going to some very well financed or endowed institutions and how much is going to support smaller charities and particularly those dealing with poverty alleviation. The Stats Can data does not pretend to even ask these questions. May be we should get a little inspiration from Pope Francis and at least ask these questions even if we do nothing about it!
Here is a link to the Stats Can page
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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.