Interested in learning more about the 10 greatest challenges facing charities? We partnered with CanadaHelps to offer a free webinar, Watch the Recording!

CanadaHelps recently released the sixth edition of The Giving Report, which is an annual look at the charitable sector and the state of giving. This year’s report highlights alarming new findings in regards to the challenges facing charities. 

The report identifies a wide range of issues and challenges relating to the state of giving in Canada and the health of the charitable sector. The unprecedented growth in demand for charitable services, compounded with inflation and revenue shortfalls, signals the emergence of severe challenges in the sector. 

From fewer volunteers to staff burnout and an increase in demand to a decline in donations, let’s take a look at some of the report’s key takeaways:

Increased demand challenges charities. 40% of charities report higher levels of demand today than before the pandemic. 57% say they are unable to meet the current demand for their services, with 22% reporting that demand significantly exceeds capacity. Less than one-third say that demand is met with their organization’s current resources. As of October 2022, two in ten Canadians (22%) reported that they planned to access charitable services to meet essential needs in the next six months.

Funds raised are not keeping up with the demand for services and the rising costs of program delivery. The report finds that while most charities are unable to meet demand, funds raised are reported to be down for many charities. Less than half of charities surveyed (45%) report that funding levels are equal to pre-pandemic levels, while one-third (31%) say funding is below. Just 12% of charities report that their current fundraising results are higher than pre-pandemic levels.

Gifts from individuals, corporations, and other charities are all down, with significantly more charities reporting declines in donations across all key funding sources than those reporting increases. The net score (charities reporting a decrease less those reporting an increase) is a sizable concern at -30.7%, -19.3%, and -11.6% for donations from individuals, corporations, government, and charities, respectively. Gifts from government sources were the only funding source that had a positive net score of 4.3%.

Inflation intensifies demand for services and increases service delivery and staffing costs. From staffing to program delivery, charities are being critically impacted by inflation with challenges across their operations. 80% of charities report that inflation has impacted their service delivery costs, while funding has not increased to meet this demand. 44% say that staff salaries increased due to inflation, but without an increase in funding, the only option is to cut expenses at a time when Canadians need them most.

Staff burnout is a serious issue. After inflation, staff burnout was ranked as the second highest concern for charities today. Close to 60% of charities report they have the same number of paid staff working despite heightened service demands, while 15% say they have decreased staff since the pandemic started. Only 24% report more paid staff. On top of staff burnout, there are fewer volunteers offering to help. Many charities continue to struggle to rebuild their volunteer programs post-pandemic, with 55% saying they have fewer volunteers than before the pandemic.

COVID funding is critical for recovery. 56% of charities relied on COVID-19 relief funding, according to the survey, and many are at risk without it. 93% say the funding was important or somewhat important to their organization. Almost half (48.3%) categorize the risk posed to their organization from the loss of COVID relief funding from the government as moderate to high risk to their organization’s continuity.

“This year’s report makes it abundantly clear that many Canadian charities are beginning to buckle under the strain of increased demand for services and stalled revenues, and we are now at a point where the majority of charities cannot meet demand,” says Duke Chang, President and CEO of CanadaHelps. “Canadians can support charities impacted by these challenges by going back to volunteering, recognizing the need for donations to fund capacity building, and being part of the change by advocating for their favourite causes to their elected representatives.”

There’s work to be done to bridge the giving gap

Since the launch of The Giving Report 6 years ago, CanadaHelps has continued to raise concerns around the giving gap, which refers to the difference between older Canadians who are giving at an accelerated rate and younger Canadians who are not keeping pace. On top of an aging group of donors, there is also a smaller group of Canadians giving – only 18.4% of Canadians are donating to charity according to tax filings. That is down 11.1 percentage points in 30 years, with almost half of that drop (five percentage points) down in the last 10 years.

While small improvements have been made in terms of the number of Canadians under 25 years of age giving (growing from 5.9 % in 2010 to 6.7% in 2020), all other ages have had their participation rates decline. Giving by Canadians aged 25-34 dropped from 17.6% in 2010 to 11.9% in 2020; those aged 35-54 dropped from 25.3% in 2010 to 19% in 2020; and those 55+ dropped from 30% in 2010 to 23.8% in 2020. The report notes a clear need for charities to urgently activate Millennials and Generation X and proactively engage even younger generations.

While charities must attract younger supporters, the data shows that progress is stalled. Almost half (49%) of respondents say they’re either dissatisfied or somewhat dissatisfied with the engagement their charity has seen with Canadians aged 18 to 30 years old. However, only 22% say they have implemented a strategy intended to engage with younger Canadians.

“To tackle dire trends, Canadian charities need to focus on understanding their donors, building relationships with younger Canadians and volunteers, investing in capacity, thoughtfully addressing staff burnout, and finally, taking a holistic approach to digital transformation,” adds Chang. “Without solving these mounting challenges they are facing, Canadian charities won’t be able to focus their efforts on creating the positive impact and systemic change required to create safe, healthy, and vibrant communities.”

Interested in learning more about the 10 greatest challenges facing charities? We partnered with CanadaHelps to offer a free webinar, Watch the Recording!