STRATEGY
SOURCE: RBC ECONOMICS, RBC DATA AND ANALYTICS
COVID-19 Upends the Charity Playbook For Canadian charities, innovation is one path to success.
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BY RANNELLA BILLY-OCHIENG, CLAIRE FAN AND NAOMI POWELL
healthy December bump eased what would otherwise have been a dismal year for Canadian charities. They will remember 2020 as a time of painful disruption, when virus-fighting measures stemmed or halted the flow of donations. Overall giving fell 4 percent in Canada last year, according to RBC data. The decline masked some sharp divergences within the sector, with some organizations seeing increased contributions and others getting nothing — literally. I think the thing that’s going to persist is that many of these organizations to survive, they had to become online overnight. Kelly Schmitt, incoming CEO of Benevity, noted “I think the thing that’s going to persist is that many of these organizations to survive, they had to become online overnight,” said Kelly Schmitt, incoming CEO of Benevity, whose software helps coordinate giving and volunteering, on a recent episode of Disruptors, an RBC podcast. “There’s been no charity galas, no golf tournaments. The fundraising activity that they used to do just completely dried up.” Charitable giving has fallen in times of recession before. It dropped sharply in the 2008-2009 financial crisis, declining more than 5 percent in each year according to Statistics Canada (data for 2020 is not yet available). This time around, what was an existential crisis for some was an opportunity for others to innovate — to embrace new technologies and platforms to reach long-standing supporters, and attract new ones. The pandemic dealt an uneven blow to Canada’s charities. Almost 42 percent of organizations that had received donations in 2019 got less in 2020, according to RBC data. The combined 40
FOUNDATION Magazine
January/February 2021
SOURCE: RBC ECONOMICS, RBC DATA AND ANALYTICS
damage amounted to $60 million less in donations. Some charities did fine; 27 percent received zero dollars in 2020. The biggest collective hit came in May, early in the pandemic, when giving plunged 30 percent from a year earlier. In December, donations rose 21 percent from a year earlier, as many Canadians rushed to lock in contributions before the end of the tax year. Small, grassroots organizations are at greatest risk, according to a report from Imagine Canada, a non-profit that promotes the work of thousands of Canadian charities. They tend to have fewer financial reserves, and many of their typical donors were hit hard by the economic downturn. The loss of live events really hurt. Despite widespread job losses, Ottawa’s support programs ensured household disposable incomes never fell below 2019 levels. That suggests the decline in giving over the course of 2020 had less to do with financial hardship than with the absence of live events so critical to fundraising. Overnight, charities were unable to rely on triedand-true approaches to capturing donations — door-to-door canvassing, live auctions, walks and runs, even bake sales. foundationmag.ca