Canadians less charitable than Americans, survey reveals

Although Canadians may like to think of themselves as more charitable than their U.S. neighbours, a new survey suggests that’s simply not the case.

According to the Fraser Institute, the average value of charitable donations in Canada, based on income tax returns, is $1,214, compared to the U.S. average of $4,021 US.

Wyoming has the highest average charitable donation among American states, at $7,789 US, almost five times the average in Alberta, Canada’s top-ranked province. Even in the lowest-ranked state (Maine), donations averaged $2,575 US, nearly $1,000 US more than the average donation in Alberta.

“There’s a tendency for many Canadians to feel superior to Americans, to think of ourselves as kinder and more giving. Obviously, these types of generalizations are far too broad for a North American population of several hundred million people,” says Sylvia LeRoy, senior policy analyst with the Fraser Institute. “But when it comes to reaching into our pockets and donating money to charity, Americans are far more generous than we are.”

Americans gave 1.67% of their aggregate personal income to charity, more than double the 0.72% of total personal income Canadians donated to charity. In dollar terms, Americans gave $162 billion US to charity, whereas Canadians gave about $8 billion, according to Statistics Canada.

“If Canadians donated the same percentage of their income to charity as Americans do, the Canadian charitable sector would have received an additional $9.2 billion in revenue,” LeRoy noted.

Canada also trails the U.S. in terms of the number of tax filers donating to charity. According to the institute, 24.5% of Canadian tax filers donate to charity, compared to 30.4% of Americans.

Because the Fraser Institute study is based on past CRA statistics, it would not include data from 2006, when the federal government eliminated the capital gains tax on publicly traded stocks donated to charities and public foundations.

That move is expected to have a significant impact on this year’s charitable contributions, observers believe; however, a separate report released by BMO Harris Private Banking suggested there’s still a lack of awareness about the new rules around charitable giving.

According to an Ipsos Reid study conducted in October, only 7% of Canadians said that the elimination of capital gains tax on donations to charities of publicly traded stocks has encouraged them to give more this year.

The same study also found boomers want to know where their charitable donations are going, with 74% indicating a preference in directing their contributions to a specific cause or purpose because they want to know their donation is being well spent.

Canadians are becoming more charitable with age, Ipsos Reid says. The vast majority of pre-retirees surveyed said they expected to spend time doing non-profit or charity work when they retire.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com