September 2024Climate Philanthropy in Canada at $106M
Clean Economy Fund speaks often about the need for more philanthropy for climate solutions in Canada. That’s because we’ve witnessed time and again the ability of well-targeted philanthropy to support giant leaps toward a climate-safe future. More climate philanthropy, we hope, could support more giant leaps. But the other reason we advocate for more climate philanthropy is simply because there is a persistent shortage of it in Canada. Many people are surprised to hear that, but the data is clear: climate change is not yet a significant destination for Canadian philanthropy.
Our new analysis corroborates this, finding that Canada is well below the global average when it comes to philanthropic giving to climate solutions.
For the year 2022, which is the most recent year for which we have data, Clean Economy Fund estimates there was up to $106 million in climate philanthropy in Canada. That amounts to just 0.9 percent of total philanthropic giving in Canada, well below the already-low global average of 1.6 percent.
In other words, Canadian climate philanthropy is lagging. Why? We offer some explanations below.
But first, if you’d like a more detailed breakdown of this estimate, you can skip to the Methodology section at the bottom of this article.
There is $106 million in total climate philanthropy in Canada. That amounts to just 0.9% of total giving, putting us well below the global average.
3 reasons why climate philanthropy is lagging
For many, it’s counterintuitive that climate philanthropy is so low in Canada. Afterall, almost three quarters (72 percent) of Canadians see climate change as an urgent issue. So why then is it the target for only 0.9 percent of our charitable giving? Recent insights provide us with some clues.
- Pessimism. A recent report by CanadaHelps, an online giving platform, finds that Canadians who feel dejected about solving climate change are at least three times less likely to support climate solutions. Considering climate pessimism is trending upwards, it’s possible that climate philanthropy is hampered by low confidence in our ability to solve the problem.
- Perceived Responsibility. Another clue can be drawn from the public opinion polling that shows Canadians believe the primary responsibility for solving climate change belongs to governments and businesses. Many are likely unclear about what role philanthropy can even play in solving climate change.
- Lower Familiarity. Ultimately, we at the Clean Economy Fund put our stock in one overriding explanation for Canada’s low level of climate philanthropy. It’s simply that climate change has emerged more recently as a societal issue and, as a result, the pathways for philanthropy are less understood.
Sure, climate change has emerged as a top issue for Canadians over the past 25 years, but it’s less familiar and less entrenched than the more popular philanthropic causes in Canada (the top three being education/research, health, and social services according to grants analysis).
Even among environmental causes, climate change is less familiar. Grants data shows that environmental issues with longer track records, like nature conservation, are the recipients of sometimes more than twice as much philanthropy as climate solutions.
How Clean Economy Fund can help
The corollary to being a newer issue on the public radar is that the entry-points for giving philanthropically to climate solutions are fewer, less familiar and less evolved. People looking to give charitably are likely to feel more comfortable with the well-trodden pathways provided by universities and hospitals than the younger and still-developing entry-points offered by climate organizations.
And this is precisely where Clean Economy Fund hopes to help.
We understand the barriers facing families and organizations wanting to give philanthropically to climate solutions, and our charitable mission is to assist in whatever way we can. Because amid the uncertainty and the complexity, there is in fact a fast-growing ecosystem of smart and solutions-oriented climate work happening in Canada. Our goal is to help philanthropy navigate this ecosystem and find the right opportunities to make a big difference.
The key tools we provide for doing this are (1) Research & Advice to help climate philanthropy get smart, (2) Collaboration & Convening to help climate philanthropy get connected, and (3) Funds to help climate philanthropy reach its target.
Setting a goal to triple climate philanthropy
With climate philanthropy in Canada lagging, we simply must facilitate more of it.
Our first goal should be to match the global average. That means lifting climate philanthropy in Canada from 0.9 percent of total philanthropic giving to 1.6 percent, which in turn means attracting roughly $76 million per year in new charitable giving to climb from today’s $106 million in total annual climate philanthropy to $182 million.
But we need to quickly set our sights higher than this. Canada’s contribution to climate pollution is among the highest in the world. And while it is industry and governments that ultimately need to do the heavy lifting to move Canada to net-zero emissions, philanthropy can be the all-important first domino that sets the rest of the chain in motion. In other words, the moment for climate philanthropy is now.
For that reason, Clean Economy Fund believes we must urgently triple climate philanthropy in Canada, from $106 million in 2022 to $325 million per year by 2030. That may seem a tall order but it is necessary given the scale of the climate crisis we face. Tripling the amount of climate philanthropy could, in effect, triple the amount of innovation, triple the amount of advocacy and mobilization, and triple the size of the giant leaps we can take.
Clean Economy Fund is looking forward to working with peers in the philanthropic community to achieve this goal. With the destination now clearly marked, all that’s left to do is travel the path.
Methodology
Determining total climate philanthropy in Canada is a perennially tricky undertaking. The data needed for a comprehensive accounting is lacking. Instead, analyses tend to fall back mainly on the charitable giving reported on Canadian income tax returns, which is aggregated annually by Statscan. This data not only lacks granularity but, as Imagine Canada notes, doesn’t capture all charitable giving. Some past analyses have also drawn on the receipted donations reported by Canadian charities on the annual Registered Charity Information Return (T3010), which is helpfully analyzed by Blumbergs on its CanadianCharityLaw.ca website. As Philanthropic Foundations Canada and others frequently remark, this approach, too, comes with significant blind spots. Beyond these two sources, there is a scattershot of research that can be drawn on, produced by academics, research groups and international counterparts. This includes the excellent and dependable annual analysis by the US-based ClimateWorks Foundation, which calculated global climate philanthropy in 2022 at up to USD$12.8 billion, or 1.6 percent of total philanthropy worldwide. While helpful, these other third-party analyses help illuminate only parts of the picture.
However, earlier this year Environment Funders Canada provided a first-ever breakdown of the philanthropy of (the majority of) its 75 members, which provides us a new and tantalizing piece of data on which to build a stronger and more accurate estimate of climate philanthropy in Canada.
So we’ve done just that, drawing on all of the above resources.
We calculate that total climate philanthropy in Canada in 2022 amounts to $106 million ($106,265,297). This amount is the sum of total foundation-led philanthropy and total receipted individual and corporate philanthropy to climate solutions.
The total amount of foundation-led philanthropy to climate solutions in Canada in 2022 is calculated at $41.7 million. This figure was arrived at using a combination of member analysis provided by Environment Funders Canada, additional grants data derived from CharityData.ca, and a reasonable buffer to allow for smaller grants and grants not known to us.
The total amount of receipted individual and corporate philanthropy to climate solutions in Canada in 2022 is pegged at $64.5 million. This is an estimate due to the fact that receipted donations, which are both reported by individuals on income tax returns and disclosed by charities on the T3010 annual return, are not broken down by sector destination. In the absence of that more accurate breakdown of how much of this philanthropy is destined for climate solutions, this analysis applies to the climate sector the same ratio of individual/corporate:foundation philanthropy that is observed in the charity sector as a whole. That ratio, derived from Blumbergs’ analysis of 2022 T3010 returns, is 1.54:1. In other words, individual and corporate philanthropy was 154 percent of foundation-led philanthropy in 2022. This approximate ratio is corroborated by Environment Funders Canada’s analysis of the revenues of environmental charities in Canada, more specifically, which finds that revenue originating from receipted donations (ie. individual and corporate philanthropy) is 151 percent of revenue originating from funds from other charities (ie. foundation-led philanthropy).
And so we assume the same for climate philanthropy, specifically. Our estimate of $64.5 million is 154 percent of the $41.7 million in foundation-led philanthropy.
This analysis is far from perfect. Its imperfections stem from the following uncertainties and data gaps:
- For total philanthropy in Canada, we rely on StatsCan’s reporting of receipted donations claimed by Canadians on income tax returns. In 2022, this was $11.4 billion. However, others have shown that not all receipted donations are reported on income tax returns, so there is more total philanthropy in Canada than what is reflected here.
- Because individual and corporate philanthropy is measured using the receipted donations reported by charities on the T3010 annual return, this figure does not capture donations made to non-charities, including the multitude of non-profit groups (“Non-qualified donees”) doing important work on climate.
- Individual and corporate climate philanthropy is an estimate. While Canada Revenue Agency collects and discloses this information for the charity sector writ large, it does not break it down by the destinations of that philanthropy.
- Not all climate philanthropy is immediately deployed. In particular, the rising popularity of Donor Advised Funds – including via community foundations, banking institutions, intermediaries and other giving platforms – means that some of the philanthropy that is reported on income tax returns might not reach its destination (whether climate or otherwise) for many years. Similarly, because of a disbursement quota of only 5%, philanthropic transfers to foundations might also have a delayed deployment. In other words, some of the philanthropy that is targeted for climate in a given year isn’t actually deployed for climate solutions until a later year.
Data Sources:
- Total philanthropy in Canada in 2022: $11.4B (Source: Statscan)
- Total climate philanthropy in Canada in 2022: $106,265,297
- Foundation-led philanthropy: $41,721,750 ($32,685,000 reported by EFC + $7,050,000 in other known climate-funding foundations + $1,986,750 [5%] to capture smaller grants and foundations not known to CEF)
- Total individual and corporate-led philanthropy: $64,543,547 (Source: Using ratio of receipted gifts [Line 4500 on the T3010] to gifts from other charities [Line 4510] determined from Blumberg’s analysis of the 2022 T3010 forms, which is 1.547:1, and applying it to climate philanthropy in particular by multiplying foundation-led climate philanthropy by 1.547)
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