Charity Overheads Worry Canadian Donors

A majority of Canadians say they will be giving to charity over the holiday season, but many are overly concerned that their donation will support overheads, according to a new survey.

The survey by Imagine Canada, which examined holiday season charitable giving and attitudes about charitable donations, found that 62 per cent of Canadians intend to donate to charity over the holidays.

Eight in 10 (81 per cent) cited “helping the less fortunate” as their motivation to give.

However, the  the survey found that almost two-thirds (65 per cent) of those surveyed think that charities spend too much on administration. Only seven per cent of those polled disagreed with the notion that charities spend too much on administration.

Overhead costs also emerged as one of the most important factors Canadians consider when they are asked for a donation.

Four out of ten (39 per cent) indicated that had made a donation in the past 12 months expressly because the charity had demonstrated that their donation would go to the cause, not overhead.

The only considerations that ranked higher in people’s minds when deciding whether to donate was “interest in the cause” (41 per cent) and “the charity shares my values” (40 per cent).

“This holiday season Canadians will help thousands of charities serve their respective causes and their generosity is magnificent,” Bruce MacDonald, President and CEO of Imagine Canada, the national umbrella organisation, said.

“However, the idea that overhead is bad is a popular misconception. The true measure of a charity’s effectiveness is its impact on the cause it serves. Effective administration enables fundraising, infrastructure and staffing that are essential to fulfilling a charity’s mission. Real impact requires real investment.”

According to Imagine Canada, donor concern about overhead spending raises serious questions about how charities can deliver value if there is little or no appetite to support infrastructure. In fact, research suggests lower administrative costs can limit a charity’s effectiveness.

“Wise spending and financial accountability are important, but overhead is not a measure of how efficiently the cause is being served,” MacDonald said.

Key findings:

• 33 per cent intend to volunteer their time, rather than money, to a charitable cause

• 33 per cent want to set an example for their children or others about the importance of giving back

• 26 per cent plan to make a donation in someone’s honour in place of a traditional gift

• 42 per cent say they are donating to experience the joy of giving and celebrate the spirit of the holidays

• 61 per cent of those not making a charitable donation cite lack of funds as the reason