Aging Canadian Population to Dramatically Alter Charitable Landscape
(Dec. 11, 2006) The aging baby boomer generation and shifting demographics may lead to a golden age for philanthropy in Canada, but also may create many challenges, according to a new report by TD Economics.
The report, Greying of Canada’s Population Has Far-Reaching Implications for Charities, argues that baby boomers will put immense pressure on charitable services and programs as they get older, especially in the area of healthcare services. The average age in Canada is expected to be 45 in 2030, up from 26 in 1971 and 39 in 2006. Canadians age 65 or older will account for one-quarter of the total population in 2030.
While government spending on healthcare will most likely grow, the additional funding will not be enough for most healthcare charities to cover the growing demand for services. These organizations will need to focus even more on private funding and philanthropy. Even nonhealthcare charities will face challenges, since the sector already receives more than 50 percent of its funding from the government, according to the report. Increased government spending on healthcare will mean less for other areas, forcing all charities to seek out private funds.
The report also stresses the impact of the growing diversity of the population and the increasing number of immigrants who will be using the services of charities. Charities in major urban areas such as Toronto and Vancouver may feel additional pressures since immigrants are more likely to settle in these areas. In addition, because it takes time for immigrants to become eligible for government aid, the demand for charitable services in their communities will be higher.
More Benefits than Challenges
Despite these challenges, the benefits from the aging baby boomers and the growing diversity of the population will be numerous.
Boomers will not only receive a large amount of wealth from their parents, who generally saved a lot of money, but they have made significant wealth on their own. Combined with recently enacted tax incentives, such as the elimination of the capital gains tax on gifts of securities, boomers will have many attractive options for giving major gifts to charities.
Because of their wealth, many boomers will be able to retire early, and charities may find a larger and more educated group of volunteers ready to offer their services. Their high levels of education mean that they will bring a more diverse set of skills to charities as well. Some volunteers may continue to stuff envelopes, but charities may be able to make use of boomer volunteers with professional and technical skills.
They will have more interest in charities than just making gifts, according to Jo-Anne Ryan, vice president, philanthropic advisory services, TD Waterhouse and executive director of the Private Giving Foundation. “Baby boomers are influenced by ‘social entrepreneurs’ like Bill Gates,” said Ryan in a press release about the study. “As they enter retirement and turn more attention to the charitable sector, they’ll want more accountability and control over how their donations are spent. This will be a positive development for charities as they are encouraged to adopt governance standards and practices from the business world.”
Immigrants also will play a key role in giving to charity as they will make up a larger percentage of the giving and volunteering public. They will bring new ideas and perspectives about philanthropy. Charities may need to market themselves more to particular groups, addressing language barriers and cultural issues, but these efforts will position charities better in the community and lead to strong and lasting partnerships.
“We’re seeing similar trends in both Canada and the United States with regards to the baby boomers and the growing diversity of the populations,” said Paulette V. Maehara, CFRE, CAE, president and CEO of AFP. “There are major challenges ahead, but the combinations of immense amounts of wealth and increased attention and interest in philanthropy signal the potential for a huge up tick in giving and volunteering that will far outweigh the challenges.”
About the Report
A copy of the report, Greying of Canada’s Population Has Far-Reaching Implications for Charities, is available on the TD Economics website.
TD Economics is part of the TD Bank Financial Group, a financial products and service corporation based in Toronto.