Global Giving: A Comparison of Giving Rates between Countries
With the release of the Fraser Institute’s latest report showing that Canadians donated 0.64% of their combined income to charities in 2011 compared to 1.33% in the US, many Canadians are wondering why there is such a disparity.  Are Americans simply twice as generous as Canadians?  And how do Canadians compare with other countries?
Johns Hopkins University conducted a study comparing giving across nations from 1995-2002. In this study, it was found that Americans gave the most of all 36 countries examined at 1.85% of total GDP, followed by Israel at 1.34% and Canada third at 1.17%.  Further research on this data found that charitable giving is negatively correlated to tax rates – countries with higher levels of social safety nets have lower levels of giving.  As Canada’s total tax rate as a percent of GDP is higher than in the US, this is one potential explanation for the disparity in giving.
A 2006 study by the UK-based Charities Aid Foundation that looked at donation levels for 13 countries around the world also found that the US showed the highest levels of giving at 1.67% of GDP with the UK in second at 0.73% and Canada third at 0.72%.  It went on to discuss possible reasons for the differences in the levels of giving, noting tax rates and social security contributions, the tax treatment of donations, the level of religious giving, and unofficial giving as potential factors affecting the levels.
Overall, Canada appears to have one of the highest rates of giving globally. In fact, Canada has been “on the podium” in 2 cross-country comparisons in the past decade.  However, for many political, societal, and cultural reasons, US donors give significantly more than Canadians.  This is another reason for being informed, giving intelligently, and thus, having impact with our giving.
 
Charitable Giving as a share of GDP by Country (1995-2002)

At Charity Intelligence we aspire for Canada to have the most informed donors, the most transparent charitable sector and the most effective allocation of resources. We believe that the free dissemination of information will have a transformative impact on the Canadian charitable sector.
Currently, Canadian donors have inadequate information with which to make donation decisions. According to a 2008 Ipsos Reid survey, while donors believe that charities should provide information about their spending, programs and services, fundraising costs, and the impact that they are having, donors do not believe that most charities are providing this information. Significant gaps exist between what donors believe is important and what charities are providing. Charity Intelligence seeks to bridge these gaps.
We believe that our rating system will provide an invaluable tool for donors to have the information that they need to direct their donations towards those charities that are achieving strong results.  This will have an impact in three important ways.  First, more money will flow towards more effective charities. Given the differences that we have seen between high-performing charities and low-performing charities, this will mean that donations could be twice, or even ten times more effective than they would have been had they been given to lower performing charities.

Second, all charities will have an incentive to improve on both their efficiency and their social impact.    If it is being measured and donors care about it, charities will too.  As well, with improved information available, charities have greater opportunity to share and examine best practices in order to improve. Given that charities issued roughly $13 billion in tax receipts in 2011 and overall revenues are over $200 billion, there is potential for significant value from even minor incremental improvements in efficiency and effectiveness.
Third, surveys have shown that in order to give more, Canadians need more trust in the charitable sector.  Publically-disseminated information on Canadian charities on Ci’s website will highlight charities creating significant social value, allowing for more trust that money well directed will have the intended impact.  We believe that this will increase donations overall in the sector.

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