Canadian charities and charitable foundations are facing urgent issues, among them high housing and food costs and an aging population. At the same time, younger Canadians are giving less than their elders.
The impact is clear. The most recent edition of The Giving Report from the charity Canada Helps notes that 20 per cent of Canadians “were using charitable services to meet essential needs in 2023,” most for the first time.
To address all these issues, foundations need to be able to plan strategically, but they generally lack the data that would allow them to do so. Useful and detailed information about the charitable sector is sparse, and much of it comes from the U.K. or the United States.
Stepping in to fill this gap is Philanthropic Foundations Canada (PFC), now in its 25th year of operation.
The Montreal-based organization’s 2024 Landscape Report, released on June 4, is the first in a planned series of targeted research projects designed to shed light on Canada’s philanthropic landscape.
The report
The report, which is the first comprehensive study examining the current state and evolving dynamics of philanthropic foundations in Canada, was prepared by PFC, which is a registered charitable organization, with PhiLab, the Canadian Network of Partnership-Oriented Research on Philanthropy. It draws upon data from many sources, such as Canada Revenue Agency, to trace the history and development of foundations, the assets they manage and the regulations that govern them.
“Our organization realizes that it’s important for policymakers and the general public to understand how foundations work. We wanted to approach this work with a very academically rigorous perspective,” says Sara Krynitzki, PFC’s director of public affairs and research.
“I would say that when I first read it, I was really surprised by the growth of foundations and their assets,” Krynitzki says. “The trajectory of growth has been rapid over the last 15 to 20 years.”
The results: A story of growth
Today, Canada has about 11,000 public and private foundations that steward $135 billion in assets, a figure that increased by $100 billion between 2008 and 2021. Between 2018 and 2021, giving by both public and private foundations increased. Together, they disbursed nearly $10 billion in 2021 alone.
Nonetheless, they face numerous pressures.
Despite market uncertainties, there is greater pressure on larger foundations to earn more return on their capital due to a recent increase in the disbursement quota (the amount of money that must be donated annually) from 3.5 per cent to 5 per cent.
Krynitzki says most people don’t realize that “the majority of foundations don’t have any staff. They’re run by volunteers or family members.” The report found that only 26 per cent of public and 9 per cent of private foundations have full- or part-time staff.
The area of impact investing, which seeks to yield social or environmental as well as financial benefit, is still a small proportion of foundation activity, but it is growing. By 2021, 25 of 66 survey respondents reported a mix of socially responsible investment strategies.
In order to balance the need to maintain assets with the requirement to meet disbursement quotas, many PFC member foundations aim to make 7 per cent to 8 per cent returns on their investments. However, actual returns range as high as 18 per cent and as low as 1 per cent. And when there is a shortfall, such operational areas as human resources and professional development are the most likely to be cut.
Almost one-third (32 per cent) of all money granted goes toward education research, followed by health (16 per cent), social services (11 per cent) and international development.
The Landscape Report suggests directions for future research and emphasizes the need for greater investment in philanthropic training and education, as well as a need for further research. To this end, PFC is launching an ongoing research initiative called People and Practices to provide practitioners, policymakers and the public with rigorous, helpful and informative data.
“We aim to release one research report annually, starting with this inaugural 2024 Landscape Report. We expect to publish another big report in 2026 called Working in Foundations,” Krynitzki says.
“These are interesting, pivotal times. One in nine Canadian charities is a foundation; it behooves the government to understand what this sector does and how it’s impacting Canadians,” she says.
“The diversity within these foundations is critical. They are an important part of civil society, so that independence is very important, yet we need a regulatory environment to support their work.
Please visit here to see information about our standards of journalistic excellence.