Failure, Stock Market Crash, Bear Market, Crisis

Not only did the Covid-19 outbreak dent Canadians’ charitable giving, it upended the charitable sector altogether, according to a new report from Royal Bank of Canada (RBC).

Based on anonymized transaction data, the bank reported that overall charitable giving dropped 4% last year. The decline in donations could have been worse, but a yearend surge in activity limited the damage.

“The biggest collective hit came in May, early in the pandemic, when giving plunged 30% from a year earlier,” the report said. “In December, donations rose 21% from a year earlier, as many Canadians rushed to lock in contributions before the end of the tax year.”

The jump in December giving “eased what would otherwise have been a dismal year for Canadian charities,” the report said.

At the same time, the effect of the pandemic on the charitable sector has been very uneven, RBC said.

The bank noted that while some organizations did fine, 27% of Canadian charities didn’t receive any donations at all last year, and 42% of the charities that received donations in 2019 got less in 2020.

“The combined damage amounted to $60 million less in donations,” RBC reported.

The decline in giving came as many traditional fundraising avenues were disrupted by public health restrictions, which put an end to live events and forced many organizations to pivot to online campaigns.

“Overnight, charities were unable to rely on tried-and-true approaches to capturing donations—door-to-door canvassing, live auctions, walks and runs, even bake sales,” the report said.

As with the economy overall, the effect of this wholesale shift to digital was deeply unequal.

RBC said that charities that had an established digital presence or were able to pivot to online fundraising came through the crisis better than others.

“What was an existential crisis for some was an opportunity for others to innovate — to embrace new technologies and platforms to reach longstanding supporters and attract new ones,” the report said.

The report also noted religious charities and organizations focused on the health sector saw their donations rise year over year in 2020, while others suffered.

“Charities with an international or educational focus were battered,” the report said.