Fraser Forum

William Watson: Another area where we need to be more competitive with the U.S.—giving

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Since the astonishing election result in the United States, our passive-aggressive Canadian sense of superiority has been on full display. We’re a humble people, we claim, but after a couple of beers—Canadian beers, of course, who would want to drink American?—many of us will confess to complete certainty we’re better than our southern neighbours.

The latest edition of the Fraser Institute’s annual comparison of American vs. Canadian charitable giving should give us pause on that. In 2014, the most recent year for which complete data are available for both countries, the average American who claimed charitable donations on his or her income tax gave US$5,807. The average Canadian who did the same gave only $C1,618.

OK, so maybe the exchange rate messes up the comparison. Well, no, in fact, it goes the other way. Through 2014 the U.S. dollar averaged $1.105 Canadian, so our giving translated into US$1,464.25, which means that, expressed in the same currency, our annual giving was just 25.2 per cent of theirs. Yikes!

OK, so maybe the Americans did give more in absolute dollars but they have higher incomes so our givers must have given more as a share of their income. Didn’t they? Well, no, they didn’t. Americans gave 1.24 per cent of their aggregate income to charity, Canadians only 0.56 per cent. That puts us at 45 per cent of U.S. giving, not one-quarter, which is better, but still not great.

OK, so maybe we don’t give as much in absolute dollars or as a share of our incomes but at least more Canadians do make a point of giving than is the case in the U.S. Well, no, that’s not true, either. In 2014, 24.5 per cent of U.S. tax-filers listed charitable donations versus only 21.3 per cent in Canada.

There are important charitable outposts in Canada. Albertan donors gave $C2,443 per person. And Manitobans led both in giving as a share of income (0.81 per cent) and percentage of tax-filers giving to charity (24.8). But if you look at the most charitable U.S. states, the numbers put us to shame. In Wyoming, the average donation was $16,644. In Utah, donors gave 3.17 per cent of their income on average. In the state of Maryland, which is named (albeit indirectly) after the woman who gave Christians their giving season, fully 38.2 per cent of tax-filers gave.

Now, as anyone who’s tried it will know, getting sensible inferences from raw data is seldom an easy thing. (At time’s it’s tougher than sledding on grass.) As the study points out (in footnote 5) there are several possible drivers of charitable giving including “income, the after-tax cost of donating, scope of government, the age of the population, levels of education, religious affiliation, and volunteerism.” Also, the numbers the study uses don’t include giving that wasn’t claimed for tax purposes or that took place in-kind. And there could be differences in the way the tax data are collected and compiled that also help explain the cross-border differences in giving.

Even so, for a country that prides itself in how inherently good it is, our numbers are pretty pitiful. You hear a lot at this time of year that it’s better to give than receive. I don’t know. I’m an economist. I’ve always thought receiving is not to be underrated. But if you have received a lot—and most everyone who lives in this uniquely blessed land has—you should feel obligated to give and you’ll probably feel good doing so.

My province of Quebec doesn’t do very well in these data, with only 19.8 per cent of us giving, on average, just $726 or 0.27 per cent of our incomes.

My wife being an accountant, we do our cash giving at year’s end. We’ll be working hard this weekend to raise those averages. I hope that in whatever jurisdiction you live in, you’ll be doing the same.

I’m off now until January. Merry Christmas if you’re Christian! Happy Hanukkah if you’re Jewish! Happy Holidays if you’re anything else! And all the best to everyone for 2017.


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