Insights
Periodic insights from our Investment and Private Client Teams on a broad range of investment and advice-related topics
Published by the Private Client Team at KJ Harrison Investors
In ancient Rome, the new year was celebrated by worshipping Janus, the god who served as the guardian of the passage of time. Janus was typically depicted as having two faces, for a simple reason that applies as much today as it did for the ancient Romans: the new year is a time to look back and to look forward, to remember the year that was and to look ahead to the next one. But the end of the year is also, I think, a time to look outward, at the world’s many challenges and issues, and ask oneself, How can I make things better?
It’s a spirit of philanthropy that is marked on Dec. 3 with Giving Tuesday, a worldwide “generosity movement” that encourages people to do good. And the need for doing good by supporting charitable organizations has never seemed greater.
According to The Giving Report 2024 by CanadaHelps, a national nonprofit that services charitable organizations and donors, the percentage of Canadians who donate to charities every year has been in decline for decades. Based on available tax filing data, about one in four Canadians gave to charity in 1997; today, the proportion is more like one in six. By comparison, more than half of Americans donated to charity at least once over the past year. As the number of Canadians making donations declines, the burden—or responsibility—for philanthropic support of worthy causes is increasingly falling on high-income donors, whose contributions in 2020 amounted to more than 40% of total giving, even though they comprised fewer than one in 10 donors.
It’s gratifying that most if not all of the high-net-worth families I work with recognize the need and are stepping up to the challenge of supporting good causes. Many take time in December to get together and discuss their giving priorities and strategies for the year ahead. There are practical reasons to make this a year-end conversation, of course. Chief among them, perhaps, are tax planning considerations. Families that want to take advantage of donation tax credits on this year’s tax return will have to make their charitable gifts by Dec. 31. Over the longer term, philanthropic goals and their tax effects should be a central part of financial and estate planning, so this time of year also presents an opportunity to talk about those goals with family and with your advisors.
But beyond the practicalities, there is the more basic question of which cause or causes to support. Certainly, there is no shortage of important ones, and we see them playing out on the global stage every day in the news. We live in distressing times. Wars are creating communities of refugees and orphans. Global warming is impacting ecosystems everywhere, even while governments fall short on their commitments to combat it. There is a vital need for improvements in healthcare and social justice in countries less fortunate than ours; hunger and preventable disease still take too many lives in too many places.
Those are big, important, global issues, and the nongovernmental organizations working to alleviate them are more than worthy of philanthropic support. So please do not interpret what I am about to say as any sort of criticism of them as giving goals.
But here is my thought: When you think about where to “spend” your philanthropy dollars, spare a thought—and at least some of your support—for giving locally.
We do not have to look to other countries to see social, economic and environmental problems that our philanthropic dollars could help address.
Concerned about the impact of climate change and human degradation of the environment? Canada has among the highest per capita greenhouse gas emissions in the developed world. And however much we may like to consider ourselves responsible environmental stewards, the population of Canadian wildlife species classified as at risk has declined by at least 60% since the late 1970s, according to the World Wildlife Fund.
In the human world, the pressures on our social safety net are increasing, and they are showing up in the growing numbers of Canadians who are living in poverty and/or without sufficient food or housing. According to Statistics Canada, one in 10 Canadians lives in poverty and about one in six experiences food insecurity. Meanwhile, Food Banks Canada reports that food bank use is at the highest level it has ever been as families struggle with rising prices and wages that have not kept up.
Homelessness is a national crisis. Precise figures are impossible to find, but a best guess is that between 150,000 and 300,000 Canadians are without permanent, stable housing; on any given night, somewhere between 25,000 and 35,000 people in this country do not have a roof over their heads, according to Statscan. My own community, Toronto, has the most homeless people in Canada. More than 10,000 of my neighbours are “actively homeless,” meaning they stayed in the shelter system over the past three months, according to municipal data. The data also suggest that about three homeless Torontonians died every week in 2023, although the city acknowledges that even that alarming figure is probably an underestimate.
This is by no means an exhaustive list of the social, environmental and economic issues we face in our communities: access to healthcare, mental health, addiction, youth in crisis—the challenges are many. And yet the charitable organizations dedicated to addressing them are coming under increasing pressure.
Staff and financial resources are being pushed to the limit. CanadaHelps reports that service usage of charities is at an all-time high, with nearly one in five Canadians turning to charitable services to meet essential needs in 2023—more than half of Canadian charities say they have been unable to meet demand. Here in my city, the Toronto Foundation says that more than 80% of nonprofit organizations saw an increased demand for their services in 2024; only 15% were able to keep up with it. And it’s disturbing to see that according to the foundation, more than a third of Toronto charities saw their revenue from individual donations decline this year.
Again, I am not suggesting that philanthropists should ignore the many pressing global causes that are worthy of support. But as we think about our giving on this “Giving Tuesday,” let’s not forget that charity begins at home. Our neighbours, our communities and our environment need it, too.
