Finance Committee on Feb. 2nd, 2012

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Chair.

Thank you, everyone, for appearing. This is really interesting stuff.

I used to work for a man who was an actuary and he used to say it was all in the numbers, and I believe that.

Madame Laforest, you talked about the increase in the age as the demographics shift. We're seeing more people in that higher giving bracket. Are we seeing a larger increase in giving as the shift starts to take place?

[Prof. Rachel Laforest]

As they get older, whether they're giving a higher donation?

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Let's talk about 1991 to 2010. I forget what those numbers were. I had them just a couple of days ago. But as that shift to 55 increases, is the giving increasing proportionately as well?

[Prof. Rachel Laforest]

I don't have that data.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Okay.

One of the statements made by Ms. Payne, I think, was about charities. Do I have this right? If a charity loses popularity, does it receive more government revenue?

[Prof. A. Abigail Payne]

The question is, if the government drops money into the charity, what happens to private donors?

Traditional economic theory says that as an individual—and this would be similar to public goods—I see that the government has given that charity money, so I'm going to stop giving. But the problem is that it appears from our research that the government funding may serve as a signal of quality.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Could you have that wrong and maybe the fact that less money is received—and the largest group is the church groups. Let's take a group that's active in the third world. I'm not going to name any names, but as they lose popularity with the church groups, would they start targeting the government for more money? Is that a possibility?

[Prof. A. Abigail Payne]

That is certainly a possibility, and I think one of the key facets of our research says that the charities are active participants. They are not passive recipients of funding. Be it government money or be it private donations, they are active in raising money for their charities.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Okay.

I want to make a quick comment on different types of charitable giving. Traditionally we recognize moneys or we're recognizing a few others.... I'm familiar firsthand because my wife spends a lot of time in a thrift store, and they raise money for third world countries. Sometimes I'm amazed at the people who give their time, and I don't see a need for them to be compensated. More and more people seem to be giving, and people from the community are giving things too. That doesn't seem to be a problem. There seems to be something else.

Mr. Reed, do you think governments should tag on to what is obviously a very popular, very successful giving mode?

Ms. Payne, you talked about the U.K. I could be wrong, but I think they have an equivalent to CIDA, and I'm not sure what it is. Don't they allow people to target where they want to give their money through NGOs, and use that as a charitable giving? Is that possibly a good solution?

We saw, for instance, the success in Haiti. We saw the success in Pakistan. Especially in Haiti at the time of the earthquake, people were just so generous. Should governments start to look at that? Obviously—and this might seem a little crass, but this is factual—the money these charities raise and where that money is spent is money the government doesn't have to spend. Is that something you would recommend governments look at more closely?

[The Chair, Conservative, James Rajotte]

We have about 30 seconds for a response.

Mr. Reed.

[Prof. Paul Reed]

I would say yes. The more dramatic a situation, the greater the giving, such as Haiti. The tsunami in Southeast Asia, etc., produced enormous volumes of charitable money. The 9/11 event in New York City produced an extraordinary outpouring.

If the objective is to foster giving as a civic activity, there's a wonderful opportunity for government there, with matching contributions.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Van Kesteren.

We'll go to Mr. Harris, please.

[Dan Harris, NDP, Scarborough Southwest, ON]

Thank you.

I apologize. I don't remember if it was Madame Laforest or Ms. Payne who mentioned that 9% of donors are responsible for 61% of donations now. Do you have any statistics as to how that compares to 10, 15, or 20 years ago in terms of that small number of people giving the largest amounts? Is it more constrained than it used to be?

[Prof. Rachel Laforest]

The civic core is shrinking. There has always been a civic core, and Paul is an expert in this area. The civic core is made up of the people who are engaged in contributory behaviour in the civic sphere in multiple ways. We are seeing that the civic core is itself shrinking, so that 9% is down from where it was before.

I'm sure you could give the number, but I would guess it was 12% or something like that in the 1990s.

[Prof. Paul Reed]

The civic core has several parts to it. The really hard core massive givers spend enormous time volunteering and so on. That primary core represents something like 8% of the adult population, and it has shrunk by perhaps 1% or 1.5% over a decade.

The primary and secondary core, which represent around one-quarter of the active adult population, we're not so sure about. What we think is happening is that people in the primary core are moving into the secondary core. That is to say they're giving less, volunteering less, or participating in their communities less.

[Dan Harris, NDP, Scarborough Southwest, ON]

Based on your experiences and the fact that the core is shrinking, do we think that can be attributed more to the fact that there's more household debt, that people have less disposable income, that they're working longer hours for less remuneration, or more to societal shifts?

I remember when I was a child we were individually referred to as citizens, which implied a sense of community and responsibility towards each other, whereas now we're all just simply referred to as taxpayers and brought down to that lowest denominator of money. We're a combination.

It will wrap up my five minutes, I'm sure, but if each of you has a comment to make on that, as to whether it is one or the other or both, I'd be interested in hearing it.

[The Chair, Conservative, James Rajotte]

Who would like to start?

Mr. Reed.

[Prof. Paul Reed]

All the items you listed are contributing to an attenuation, a weakening, as is the movement away from religion. Religion is really the spark plug for civic activity.

On the other hand, there's a counter factor as well, and that's university education. Fundamentally, one of the strongest factors in civic activity, including charitable giving, is having a degree. More and more Canadians are falling into that category, and that's making a difference.

[Dan Harris, NDP, Scarborough Southwest, ON]

Education is the one silver bullet we all know about.

[The Chair, Conservative, James Rajotte]

There is more time.

Madame Laforest.

[Prof. Rachel Laforest]

I knew that Paul would give you a comprehensive answer, because that's his area.

The one thing I would flag is the fact that the pre-1945 generation is slowly becoming disengaged. I think it's really problematic, because they have a particular ethos. They have a particular way of engaging with the civic sphere. In volunteering and giving, they're very generous. The decline and aging of that particular generation and not having a subsequent generation with those particular characteristics you were talking about I think might be problematic.

[The Chair, Conservative, James Rajotte]

There's about a minute left if anyone else would like to comment.

[Prof. A. Abigail Payne]

Thinking of it in more of a macro perspective, if you look at the tax returns, the number of tax filers reporting donations is increasing. We've seen a growth in the number of tax filers, so that's what's causing the decline, or what we're saying is the perceived share of tax filers reporting to decline.

One of the things I would want to think about is what the “right set” of volunteering, giving, and government services would be for a community. What is it that our communities need?

We've seen a growth in donations. We have seen a growth in the number of charities. We don't really understand how charities work with each other. Do they compete with each other or do they work with each other? I think you get a little bit of both. You need to go back to the charities and how they're operating in our communities.

[Dan Harris, NDP, Scarborough Southwest, ON]

I certainly think a fair amount of competition exists among the various charities. There's also the way charities have been professionalized, in that each of us, I'm sure, gets a lot more calls and asks than we used to. Of course, one of the factors there is that they call everybody, because a different person will be able to give each time. I think that contributes as well.