By Malcolm Burrows
These are the opening lines of a video that is part of the November launch of CanadaHelps,org new “Cause Funds” platform Unite for Change. https://uniteforchange.com/en/ There is urgency and emotion in the words and images. Judging from the faces, the audience for this new way of giving is young. The vision behind this new platform is just as bold: to address a crisis in Canadian charitable giving.
The data is clear. Canada is facing a giving gap: the number of Canadians donors has been steadily declining. Giving is falling to a smaller number of aging donors, and while the value of donations is increasing — due to major and planned gifts — the donor base is eroding. In 1990, 33 percent of tax filers claimed donations on their tax return. By 2017, that number had dropped to 19 percent.
These are concerning long-term trends. Especially so because crowd funding, the biggest “hiding in plain sight” competitor to charitable giving, is growing fast.
As the name implies, Cause Funds are charitable funds that are structured to support a number of charities that share a cause or issue. While I’m reluctant to use a financial metaphor, they are a bit like a charitable mutual fund or ETF (exchange-traded fund). One allows investors to buy many stocks with one purchase; the other to support many charities with one donation. The act of packaging helps lower barriers. With Cause Funds it is easy to find charities that align with your interest and to give. The hope is to have impact that is both broader — reaching smaller charities — and more focussed.
In a way, Cause Funds are like the coordinated campaigns from a previous century best exemplified by the United Way. The original rational fundraising innovation. CanadaHelps isn’t the first charity to introduce Cause Funds, but they have been leader in Canada.
CanadaHelps is now taking the big step of creating a new brand, Unite for Change, to connect with younger donors. Since 2020, CanadaHelps has developed 34 Cause Funds that have raised over $5 million in donations from 35,000 donors. The Unite for Change suite includes local funds for a particular community, social justice funds such as the Anti-Racism Fund, Indigenous Peoples Solidarity Fund and LGTBQ+ Pride Fund. Now we have funds for Animal Welfare, COVID-19 International Relief, and Literacy.
Environics Canada research has validated the power of Cause Funds to engage younger donors. Over half of donations to CanadaHelps’s Black Solidarity Fund and Indigenous Peoples Solidarity Fund were made by younger donors. And, brands and companies, such as, P&G Canada and Gore Mutual have provided major donations. All of this is done within a transparent structure. Donors can see exactly what charities are included, and the rationale behind the fund. This is key in terms of trust.
Evolution or Revolution?
In some ways, Cause Funds look like a simple evolution in charitable giving, but I want to suggest they are actually a form of tech and marketing enabled revolution. If they take off, they have the potential to be both a charitable sector saviour and a disruptor.
Here are a few points to ponder:
- Well-marketed Cause Funds will attract donors to small charities that struggle to get support and visibility. Unite for Change focuses on small charities and limits participation of the big ones that can stand on their own. Two-thirds of Canada’s registered charities are volunteer-run and have revenue of under $100,000. Could this be a way to mitigate the sector’s structural inequities and the “may the best fundraiser win” culture?
- Equity, Diversity and Inclusion. Advocacy and awareness are very well and fine, but Cause Funds can provide dollars to BIPOC-led that get lost in the charity marketplace. Cause Funds create a brand that embraces and enables these organizations, while delivering unrestricted funds. The Indigenous Peoples Solidarity Fund, for example, has raised $930,000 for 40 charities in two months and attracted a corporate matching sponsor. This curated fund of indigenous-lead charities makes it easy to act on one’s conscience.
- Unite for Change could be Canada’s best solution to reverse the trend of declining charitable giving and young donor engagement. The average age of taxpayers that claim donations is age 54 and has been climbing for years. It’s time to reenergize the sector with new donors, passion and funds.
- Cause Funds will ultimately be driven by public demand and interest. They are nimble and can be established quickly in response to headlines and social issues. Far, far faster than any new charity.
It’s hard to anticipate the future success of Cause Funds. CanadaHelps Unite for Change is a smart piece of generational marketing, so strong it could shift the future of charitable giving in Canada. Here’s hoping.
Malcolm Burrows is Head, Philanthropic Advisory Services for Scotia Wealth Management. He is also a volunteer director of CanadaHelps. He writes this column exclusively for each issue of Foundation Magazine.