Photo by bigdaddyhame from the Torontoist Flickr Pool.
The current economic turmoil has everyone spooked—even the fiscally conservative federal government has admitted they might need to run a deficit. Amidst all of the talk about the housing market collapse and bank bailouts, though, there’s been one group that has received very little attention: charities. This isn’t to say that absolutely nothing has been written about them, it’s just that their story hasn’t gained traction in the media.
Charities themselves have been a culprit in this reticence: as the economy started to tank, they remained relatively mum about their worries of lower cash donations. At the same time, the TSX’s collapse has also diminished the incentive to donate stock, which has been a boost to total contributions ever since Stephen Harper eliminated the capital gains tax on share donations. (Historically, any profits from a stock donation—meaning the charity sold the shares for more than they originally cost—were taxed; today, these gains are tax-exempt and the donor also receives a tax credit on the full value of the shares.) With the average TSX-listed company down 30%, most share gifts have a lower value or may not be donated at all. Coupled with the threat of lower cash donations, this poses a problem for charities and many of the larger organizations in Canada and the U.S. have started to remind the public of the importance of donating during financially troubling times.
While the potential for donation cuts is also apparent at the local level, organizations like the Toronto Community Foundation are trying to remain optimistic about the coming months. Rahul Bhardwaj, the body’s president and CEO, stresses that “there are those that are philanthropic or charitable by nature… and they have a habit of contributing and often that level continues.” Bhardwaj also reiterates the importance of understanding that the turmoil has only just started and that even the government cannot predict the state of the economy six months from now. When asked about his worry of a recession, he remains pragmatic: “The big picture is that it’s too early [to tell].”
Although the issue has received some media coverage, what has been written has largely centred on big, venerable organizations. The Toronto Community Foundation alone has $195 million in assets under its management, of which a certain percentage is donated to various charities throughout the year. Missing from the dialogue have been the small, micro-focused charities with limited resources and personnel.
Photo by jeff caires from the Torontoist Flickr Pool.
Toronto-based Street Health is one of those groups. Focused on helping the neighbourhood surrounding the corner of Dundas and Sherbourne, Street Health offers physical and mental health programs to the under-housed and the homeless. The organization’s annual operating budget is $1.75 million and 16% of this budget—the second-largest amount, tied with agency contributions—comes from individual donations. Faced with a recession, Street Health’s fundraising coordinator Patty Porretta is trying to stay positive. Over e-mail correspondence she acknowledges the potential of decreased funding, but also adds that during economic hardships, donors “become closer to and are more directly impacted by issues of poverty and social justice, and this increased social consciousness translates into more philanthropic involvement.” Conversely, she also remains realistic and admits that during a recession “the need for services from small agencies like Street Health increases because more people are losing their jobs and becoming homeless. This puts additional strain on existing financial and human resources.”
The Toronto Rape Crisis Centre (TRCC) is more worried. Offering support and resources to women who have suffered from sexual abuse, the TRCC is even more dependent on community donations—they fund approximately 29% of its operations. The organization is currently in the midst of discussing new ways to raise awareness of, and funds for, the Centre. Their two major fundraisers are an annual Bowlathon and the Women Ride Out Against Rape event, which raised $100,000 and $8,000 respectively last year. Preparing for lower levels of support this year, peer counselor Cynamin Maxwell explained over e-mail that the TRCC is cutting back on the events’ expenses.
Both Street Health and the TRCC believe their smaller size puts them at a greater risk of losing donor support. “Because of the limited resources that smaller charities have to hire professional fundraising staff and to conduct ongoing fundraising activities,” said Poretta, “they have traditionally been at a disadvantage.” Maxwell echoes this concern: “People tend to donate to more ‘feel good’ causes such as Sick Kids and cancer research, and frankly, these charities and hospitals have huge fundraising and publicity budgets. So, even if it’s not the ‘feel good’ effect, it is the effect of being in the public view” that puts them at an advantage. Luckily for Street Health, they have the funds to support a professional full-time Fundraising and Development Manager; not all charities are as fortunate.
Remaining optimistic, the recession may not have a devastating effect on the economy or on charities. But in the event that things aren’t so cheery, Maxwell reiterates the need to continue helping the people she sees every day. “We have a loyal donor group, but like the survivors we work with, they aren’t the wealthy patrons we see in the news. When the government cuts back on social spending, we see the effects immediately in the women we work with.” As proof, she cites the example of women asking the organization to cover the cost of riding the TTC whenever welfare cheques get cut. So remember, in the event that your Christmas budget is getting scaled back, it really is true—no donation is ever too small.
For more information on smaller charities you may have never heard of, visit CanadaHelps. Direct donations to most groups can be made securely through the site.