Major Gifts in Canada during the COVID-19 Pandemic – The First Six Months

KCI’s team of prospect researchers and analysts, with input from our clients and consultants across the country, have tracked major gifts across Canada for over three decades. We regularly post the largest gifts to our website to share the great news regarding generous gifts and philanthropy in Canada with others in the sector.

These updates are typically posted monthly, but when the COVID-19 pandemic was declared it didn’t take long to notice that gifts to pandemic relief causes were being announced at unprecedented levels, and for us to hear from many who were very interested in keeping up to date on the latest gift news. Through April and May of 2020, we responded by posting gift lists weekly, with the number of gifts in many weeks close to what we would typically have in a month’s worth of news.

It was inspiring and humbling to observe how Canadians collectively rallied to help others in their communities, across the country, and around the world during this time.

As we moved into the summer, however, and we have all navigated and adjusted to ‘the new normal’, the pace has slowed somewhat and we have shifted back to our regular monthly schedule. As we enter the fall of 2020, we wanted to look back at the 6 months that have elapsed since the WHO officially declared a pandemic on March 11, 2020.

WHO MADE THE GIFTS?

In the six-month period from March 2020 to August 2020, we found:

• 176 gifts announced of $500,000 or more (vs. 110 during the same period in 2019) with a total value of $426.8 million. (Note that this period did not include the $250M gift from James and Louise Temerty to the University of Toronto announced on September 24, 2020.  More on that below.)
• By number, 46% of gifts of $500k+ in those six months were from corporations, and 33% from foundations (vs. 28% and 19% respectively for gifts at the same level in 2018 and 2019).

But by value, foundations really stepped up. $246.6M, or 58%, of the $426.8M came from foundations, with an average gift amount of $4.25M, compared to $1.3M for corporations and $2.0M for individuals during that period. During the same six months in 2019, foundations were responsible for a much smaller share of the total – $87M from March to August 2019.

However, on the not-so-positive side, while foundations and corporations moved quickly to support Canadian charities and the people they serve, it was obvious that announcements regarding major gifts from individuals were far fewer. Individuals typically account for the majority of major gifts we track, as our 2018 and 2019 combined figures show. Major gifts from individuals accounted for only $71.8M of the $426.8M given during this initial pandemic period. For comparison, during the same period in 2019 gift announcements from individuals alone totalled over $425M – equivalent to the total given by all types of donors in the same six months in 2020. As noted above, the 6-month period we analyzed did not include the groundbreaking $250M Temerty gift in September, but it is notable that even if this gift had been announced in the March to April period the total from individuals would be approximately $322M, still over $100M less than the $425M during the same period in 2019.

Rather than being cause for concern though, we feel this may be an area of opportunity or growth in the future. For individuals, caution and uncertainty have certainly been key themes during this period, particularly when we consider the economic turmoil we’ve seen during this period, particularly in the stock market. Major gifts at the level we are discussing are typically contributed from individuals’ assets and investments, and more recently we have begun to see stabilization and growth in the markets. Presuming this trend continues, wealthier Canadians may be in a more fiscally sound position to advance their philanthropic interests in the future. On the other hand, we expect that many businesses in particular may take a bit of a ‘back seat’ as we head into 2021, depending on their sector and specific economic situation.

And if you’ve noticed from the statistics above that there more gifts by number during this pandemic period compared to the same time in 2019, but the total amount given was lower, then pat yourself on the back. From the gifts we’ve tracked, the average gift from all donor types in March to August 2020 was $2.4M, compared to $5.4M in the same period in 2019.

However, a key factor may be that many more of these gifts appear to be shorter-term commitments than we would typically see. Emergency response doesn’t tend to lend itself to commitments pledged over many years – as the money is needed now, urgently, and donors accordingly focus on giving what they can right now.

WHO RECEIVED THE GIFTS?

Gifts received during the first six months of the pandemic went primarily to Community Service causes (43%) or Health charities (34%). However, Health charities commonly receive about a third of gifts we track at the $500k+ level, as seen in the graph below. The real difference was that significantly more gifts were directed to Community Service charities than we typically see while other sectors, particularly Education and Arts & Culture, took a bit of a ‘back seat’ during this period.

Some notable gifts included in this significant show of support for Canadian charities focused on Community Services were:

• The Sprott Foundation’s announcement of two $10M gifts, one to Second Harvest and one to Community Food Centres Canada, to extend food supports for Canadians.
• The Rogers Foundation’s gift of $60M to various community service charities in Canada, including $20M to Food Banks Canada and $10M to the Salvation Army of Canada.
• $5M in gift cards from Loblaw Companies Ltd. to Food Banks Canada, Second Harvest, and other food banks and community charities.
• Two $1M contributions from Canadian Tire Corporation, one to the Canadian Red Cross and one to the United Way Centraide Canada, to support COVID-19 response.

As might be expected, many of the gifts to organizations in other sectors were also COVID-19 related, such as many gifts to educational institutions to support pandemic-relief funds for students, and a $1M donation from the Vohra Miller Foundation to the University of Toronto to help launch a new Institute for Pandemics.

LOOKING TO THE FUTURE

In our experience, the final third of the calendar year is the most active for major gift announcements and giving to charities in general.  In past years, we typically see approximately 40% of gifts announced during the last 4 months.  Although 2020 may continue to defy trends, it is possible that we will see many more major gifts announced in the months to come, in addition to the $250M Temerty gift that was announced just as we were finalizing this article. It will be interesting to observe if donors’ areas of support continue to focus  on the sectors that have dominated giving so far in 2020, or if attention will shift to sectors that have seen less support during the pandemic.

It will also be interesting to observe if individual donors continue to give differently during this period.  If that trend continues, we expect that overall giving to charities will continue to be reduced as we conclude 2020 compared to previous years.  However, it is important to note that when gifts are announced does not always coincide exactly with the timing of gift decisions, particularly the largest gifts that would normally have celebratory events or other recognition.  September, for example, tends to be a busier period for gift announcements and celebrations for gifts that have often been finalized months before.

It is also quite possible that major philanthropists have been giving more ‘quietly’ during this period, with little expectation of recognition.  And similarly, organizations may have been muting or postponing gift celebrations or announcements during this pandemic period, either due to concerns around social gatherings, caution around the appropriateness of celebrating major gifts during a pandemic, or simply as a result of reduced capacity as charities have struggled to manage day-to-day needs while working remotely.

But, given our experience working with charities across the country in recent months, it seems certain that in most sectors the number and level of major gifts has reduced during the pandemic.  This has been a period of incredible upheaval and uncertainty, and it was inevitable that donors would be impacted and traditional giving patterns and habits would be disrupted.  But it is important to remember that during past periods of economic or other challenges that donors, particularly individuals, have continued to give and that giving has rebounded afterwards.  The question now is not if, but when.

What is not in question, however, is the knowledge that Canadians’ commitment to each other and the causes they care about will remain strong.  We at KCI have been inspired by the generosity across the country we’ve seen so far this year in so many ways, big and small, and we look forward to continuing to work with charities across the country as they strive to build a more fair, resilient and healthy country.

— Celeste Bannon Waterman, KCI Partner / Lead, Research + Analytics

 

As a final postscript to this analysis, please remember we love to hear about your gift announcements so we can include them in our monthly Major Gift News.  To share, please email us at sectornews@kciphilanthropy.com.  And to make sure you don’t miss our monthly gift updates, follow us on LinkedIn or sign up to receive our news and insights at https://www.kciphilanthropy.com/insights/.