By Shannon Craig
It’s no surprise that charities have had a rough ride since the start of the pandemic. It started with the cancellation of critical in-person fundraising events, leaving charities scrambling to make up for lost revenue. Some charities were forced to quickly pivot programs and services online, while others who offer critical frontline services incurred unexpected costs such as Personal Protective Equipment (PPE) or plexiglass to stop the spread of COVID-19.
Now, more than two years into the global health crisis, charities are still contending with the ripple effect of the pandemic as many organizations continue to face higher than normal demand, while donations have declined or flattened as inflation and economic uncertainty mounts.
To understand both the challenges and opportunities currently facing charities, CanadaHelps recently published The Giving Report 2022, an annual publication which highlights giving trends and data to gain insights into our current situation.
Highlighted in this year’s report are results of an Ipsos poll commissioned by CanadaHelps which shared worrying results. Conducted in January 2021, the poll found that 11 percent of Canadians currently rely on charities to meet basic needs such as food and housing. Of even greater concern, the 11 percent of Canadians relying on charities for basic needs could rise as high as 26 percent if pandemic and inflationary financial pressures continue in 2022. It’s a staggering reality, but that means one in four Canadians may be forced to turn to charities this year for critical support.
While many charities face heightened demand in contrast to pre-pandemic times, the same Ipsos poll also reported that one in four Canadians expect to give less in 2022 than they did in 2021. Even before the pandemic, however, charities across the country were in a tough spot. Between 2006 to 2019, giving participation rates declined from 24.6 percent in 2006 to 19 percent in 2019 — that’s a 5.6 point drop in less than 15 years.
As changes in giving behaviour take effect over time, one concerning trend outlined in the last few editions of The Giving Report highlights how older Canadians are now giving at twice the rate of younger Canadians. When older donors are no longer able to give, and if younger Canadians do not increase their giving, charities will be faced with a significant gap in funding known as the giving gap. When we dive into the data, we see Canadians aged 50 and up were the only group to increase their giving, which grew from $4.2 billion in 2006 to $7 billion in 2019. During the same time period, Canadians between 40 and 54 years of age, 25 to 39, and 18-24 decreased the amount they donated by -3.1 percent, -1.6 percent and -2.1 percent each year respectively.
While the giving trends are alarming, the report also gives reason for optimism as it sheds light on the giving preferences among younger Canadians which charities can leverage to adapt fundraising strategies to engage a broader demographic of givers.
First, the report highlights room for optimism, especially when it comes to younger Canadians. Although the widening giving gap is cause for concern, younger Canadians have demonstrated interest in new ways of giving, including donating cryptocurrency. Just over six percent of Generation Z and four and a half percent of Millennials have donated cryptocurrency in the last 12 months compared to 0.3 percent of Generation X and less than 0.1 percent of Baby Boomers in the same time frame.
Millennials have also demonstrated a strong affinity towards donations of securities. Thirteen percent of Millennials have donated securities in the past year, making them twice as likely to give securities than Baby Boomers. When it comes to monthly donations, 31.8 percent of Generation Z and 30.6 percent of Millennials preferred to give to a charity every month rather than making a larger one-time gift; in contrast, 27.6 percent of Generation X and 20.3 percent of Baby Boomers who would opt to give monthly.
These trends show how important it is that charities diversify their revenue streams and enable donors to give in the way that is optimal to them, especially when trying to attract younger donors.
The second positive trend is related to ways younger Canadians differ from older generations in terms of how they wish to engage with the charities or causes they care about. For example, 58 percent of Generation Z have shared that they want to learn as much as they can about an issue so they can become an informed supporter. In contrast, less than half of Millennials (48 percent), Generation X (45 percent), and Baby Boomers (49 percent) made the same claim.
Knowing this, it’s important for charities to develop high-quality materials and resources that engage and immerse donors in the cause to help them understand the challenges, opportunities, and ways they can help initiate change. It’s also more important than ever for charities to segment their donors to target their communications, especially given differences among generations. Leveraging a donor management system to target younger donors is one way of doing just that.
Although it’s been a challenging two years, it’s more important than ever for all of us in the charitable sector to commit to learning about these trends which will take place with or without us, and double down on implementing best practices to advance the transformative work charities lead each and every day.
Shannon Craig is the Chief Marketing & Product Officer at CanadaHelps, a public foundation advancing philanthropy through technology. For more information, or to download The Giving Report 2022, visit www.CanadaHelps.org.