Home November 2019 Corporate Giving is in Our DNA

Corporate Giving is in Our DNA

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Terry O'Flynn.

Businesses both big and small contribute much of their hard-earned dollars to charities and other not-for-profit organizations. However, with businesses facing increasing tax burdens by all levels of government, a reduced bottom line is bound to have an impact on how much is left over at the end of the day to share with charities relying on their generosity. This in turn could result in an increased burden on taxpayers as charities seek a replacement for lost corporate revenues – or even worse, a reduction of programs for those Albertans in need of these services.

Likely a result of the downturn and lost jobs throughout the province, recent data from Statistics Canada demonstrates a marked decrease in the number of people making donations, and this drop has been ongoing for quite some time.

As of 2015, only 21.6 per cent of Alberta taxpayers were donating to charity. That represents a 14.6 per cent drop from 2005. Further, only 0.66 per cent of Albertans’ aggregate income was donated in 2015, down 22.5 per cent from 2005. In 2017, both Calgary and Edmonton continued to notice a decline in the number of donors, with Calgary’s decreasing by 4.3 per cent and Edmonton’s decreasing by 4.4 per cent from the previous year.

Despite a decrease in the number of Albertans donating annually, Statistics Canada also identified an increase in the amount of money donated throughout the province, which begs to reason that if less individuals are donating then businesses must be stepping in to make up the difference. Business owners often prefer to donate through their companies for both brand recognition and to demonstrate good corporate citizenship.

In society, there has been a growing animosity towards business people in general. While often viewed as greedy (spending money on the corporate jet), the reality is the opposite. Alberta’s business owners are hurting yet they are still finding ways to support the causes dear to their heart. Giving is in their DNA.

The economy, however, isn’t the only factor that could be impacting charitable giving – increasing taxes could be influencing donors to reallocate fewer dollars to charitable budget items.

For Alberta, the average age of donors is 55. Those nearing and exceeding retirement age are donating higher amounts. This suggests there could be a significant connection between charitable donations and taxation—or more importantly, tax breaks (especially at the corporate level).

Could we possibly have fewer donors because of increasing tax pressure on successful entrepreneurs and business owners? Individual taxpayers have been pushed to the point of decreasing their charitable giving. How much further can businesses be pushed as well? Any shortfalls will land back at the government’s door which impacts all Canadians. Don’t forget: we are the tax base.

Our elected leaders should bear this in mind as it is those charitable donations that support important aspects of our society like hospitals, research and social systems. So, before the rallying cry goes up to push more taxes on the wealthy and corporations, please consider that, despite a recent recession and a drop in the number of people donating, those who are able are still doing their best to be charitable. But that will stop if those same people and companies are forced to reallocate their donation dollars to pay more taxes.

It’s a sad and unwelcome trope to “punish” the successful who have worked hard to gain wealth, especially since those same people and entities are so willing to share it. Something to remember the next time you see a new piece of equipment at the Stollery, STARS in the air or families making use of Ronald McDonald House.

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