When he opened the door to the two detectives, the 68-year-old Bolsover, Ontario man didn’t know what to expect. They produced a box and asked him if he recognized it. At first, he didn’t, but then he realized what it was and the questions started. How did you get it? Where did you find it? With the help of the two officers he pieced together his memory of putting his savings and banking information in the box, which he then hid in the back of the old TV. He had completely forgotten about the box when he gave the TV set to a friend, who later turned it in for recycling. It was an employee at the recycling centre who found the box, saw what was in it and gave it to her supervisor, who called the police. In the box was $100,000 in cash.
Isn’t that just the Canadian way? The people at the recycling plant legally owned the TV set and everything in it. They didn’t have to contact police, but they did anyway, out of our shared values of generosity and fairness.
In their most recent “Generosity Index”, the Fraser Institute challenged Canadians’ self-perception, claiming, “The general trend in recent years is that a declining percentage of Canadian tax filers are donating to charity and they are donating less as a percentage of income.” Here is the link.
The Fraser Institute research was based on income tax filings and relied heavily on the measure of donations as a percentage of earned income. That position was challenged by Professor Andrew Jackson of the Institute of Political Economy at Carleton University in Ottawa. In a February 10, 2017 editorial in the Toronto Globe and Mail, he says, “the date used by the Fraser Institute are not the whole picture. Statistics Canada’s General Social Survey reports that 82% of Canadians made donations averaging $531 in 2013, for a total of $12.8 billion. Many of us appear to make cumulatively significant small donations which are not reported for tax purposes.”
Does it make sense to measure donations against taxable income when the people who can most afford to give may be retired? Statistics Canada specifically looked at donor participation and average gift size in 2010 (Source). As you can see from the graph, from age 30 onward, roughly 80% of Canadians give to charities, but the average donation climbs significantly with the age of the donor. Could it be that what limits Canadians’ giving is not an inherent lack of generosity, but a real lack of funds?
In his book, Boom, Bust, and Echo, David Foot takes on the perception that all baby boomers are rich: “If you had the misfortune to enter the world in 1961, one of the worst years in this century to be born, you’re one of a huge crowd of late baby-boomers, also known as Generation X. The mass of older boomers who preceded you are occupying most of the best jobs, and have pushed the price of real estate way up, perhaps out of your reach. Chances are that life has been a struggle for you.”
Foot also made a recommendation that resonates as much today as it did twenty years ago: “The Canadian government [should] do what the American government has done for more than 60 years: allow expenses incurred in the course of doing charitable work to be deducted from income taxes.”
But the last word goes to Professor Jackson: “The key problem for charities is not a decline in the generosity of individual Canadians, which has been quite steady in the context of a soft economy, but the general retrenchment of government social spending.”
Bill Kennedy, CPA, CA of Energized Accounting is a member of a professional network providing financial and revenue systems and management for Toronto charities.