publication date: Jan 16, 2012
author/source: Janet Gadeski
Listen with just one ear and the news sounds good.
Charitable donations in Canada have begun to reverse the nearly 6% decline (in
real dollars) precipitated by tough economic conditions in 2008 and 2009. From
2009 to 2010 preliminary estimates show that charitable contributions increased
4.6% ($500 million) adjusted for inflation. And the number of tax filers
claiming donations has increased slightly as well from 23.1% to 23.4%.
But those large increases in donations "do not appear to be
primarily driven by the contributions of typical Canadians," according to the
December research bulletin from Imagine
Bigger gifts, fewer
What's really going on? Beginning in 1996, the federal
government implemented a series of tax code changes that increased the tax
benefits of certain kinds of gifts. While the median incomes of Canadians
increased through the late 1990s and most of the first decade of this century,
total donations soared by comparison. In other words, a small proportion of
donors began to give much more generously: appreciated capital property,
publicly traded securities and ecologically sensitive land.
Further complicating the research into the behaviour of the
"average donor," Imagine Canada notes that between 2003 and 2009, "abusive tax
shelter arrangements" siphoned away an estimated $5 billion that had been
receipted as charitable gifts but had not flowed to charitable work.
Until those schemes were exposed and the data corrected, it
was easy to believe that truly generous amounts were available to charities. But
in fact, they caused the amount of total giving to be understated by
significant amounts, almost 15% in 2006 when the shelter schemes peaked. They
also masked the fact that genuine charitable giving held steady from 2007 to
2008. Only the abusive portion declined, but that was enough to give the
appearance of an overall drop one year sooner than it actually occurred.
Statistical analysis is clearly not a pastime for the
superficial. Its demands for careful, critical data sifting don't fit
comfortably with tight deadlines and a 24/7 news cycle. Imagine Canada's review
stands far above the knee-jerk, tweetable factoids that often pass for scrutiny.
The organizational impact of hasty strategic adjustment in
response to poorly examined statistics can only be imagined. Imagine Canada's
careful investigation is one of our strongest safeguards against such rushed reactions.
Download the full research bulletin, Trends in
Individual Donations: 1984-2010 at http://www.imaginecanada.ca/files/www/en/researchbulletins/rb1501en.pdf.