The Changing Landscape of Charitable Giving

When CanadaHelps was created by three entrepreneurial university students, it was to fill a need. We were born in the early days of Google, pre-date Facebook and Twitter, and we were promoting online giving long before doing your shopping or banking on your cell phone – or even on your computer – was the norm. The founders knew that the world was changing. Commerce was moving online, why not giving?

But in the 14 years since we launched, we’ve seen dramatic changes in what charities and donors need. These are just a few of the trends we’re seeing now, and know will continue to grow in the future.

The way people give is changing.

The days of receiving charitable appeals in your mailbox are long from over, but technology is playing a big role in the way people give. A recent report* showed that overall giving for the three months ending in February 2014 grew 2.7 percent, while online giving for the same period grew by 7.2 percent. Our own growth at CanadaHelps is upwards of 15 percent year over year.

The demand for better online giving and fundraising options is something we see from both donors and charities. People are giving on their phones and tablets, meaning charities need mobile optimized donation pages. And like everything else, giving has become a social activity. Peer-to-peer fundraising, also called crowdfunding, are huge right now – and not just for Hollywood movies and start-ups. They capitalize on individuals’ expanded social media networks allowing people to pool their philanthropic efforts to spread a charity’s work through campaigns, and special event fundraisers.

The definition of philanthropy is more fluid than ever.

Increasingly, we’re seeing that donors don’t just see giving time or money as philanthropy. A move towards ethical purchasing (sometimes in lieu of giving to charity) is a good example – this could mean purchasing fair trade or ethically-sourced products, or even just choosing traditional products made by companies with strong corporate social responsibility messages. The lines between what is giving and what is consuming are being blurred.

People are also looking to solve old problems in new ways.

Younger generations, in particular, want to see demonstrated impact from their charitable giving. “Social innovation” is a buzz phrase that you might hear from start-up businesses and charities alike. Essentially it means charities, individuals, or businesses that are doing something to address a specific social problem in a new or innovative way. Some examples of this might be creatively using arts to empower youth to understand their cultural roots, or using human rights law in conjunction with community work to ensure local governments enforce laws protecting girls from sexual assault. Though the term is fairly new, charities have always been social innovators.

“Social enterprise” is another new phrase, where a charity or organization goes beyond just doing social work and operates on a self-sustaining model. There are many emerging social enterprises and CanadaHelps is proud to be leader in this area as an almost purely self-funded registered charity.

Social finance, including impact investing, is an emerging funding model. One form of impact investing is a hybrid of philanthropy and traditional loans: the funder is looking to make an investment that will provide a financial return, while at the same time, wants to see a social impact from her investment. Another form of impact investing that is often undertaken by charitable foundations, provides loans at below-market or even zero-interest rates, with the primary goal of helping charities further their charitable missions. In both cases, social finance provides an opportunity for charities that have a predictable revenue stream that allows them to pay back a loan over time, helping them invest in larger capital investments or big projects at rates they can afford.

The charitable sector is changing.

Canada’s charitable sector is a major part of our economy, representing 7.8% of our GDP, and employs about two million people. The value of volunteer contributions to the sector has an estimated value of more than $14 billion.

As many leaders within the sector begin to retire, there is an increasing need to attract young, skilled professionals to join nonprofits. Together, new trends enabled by technology and the upcoming infusion of new leaders (who I expect will have different expectations about the role of charities) have me deeply excited to be a part of the charitable sector today, and be a part of shaping an even stronger, more dynamic charitable sector for tomorrow.

*Data from Blackbaud Index Canada