Low interest rates cost charities donations
“The annual generosity index from the Fraser Institute notes that “the extent of charitable giving fell in virtually every Canadian jurisdiction” from 2001 to 2011, when the most recent tax figures are available.
“”We like to think of ourselves here in Canada as a very generous population, but the data doesn’t bear that out, particularly when we compare Canada to the United States,” said study co-author Charles Lammam.
“Lammam said that while his study did not look at why there is a difference in giving, other research indicates there could be a number of factors influencing why Canadians don’t appear as generous as Americans.
“Canadians lose more of their income to taxes than Americans do, while Americans receive greater charitable tax deductions than Canadians.”
First off, it’s possible that Canadians give less to charity because they feel their tax dollars go towards programs that help the poor and needy.
“18. More of us give to charities: Roughly 64 per cent of Canadians donate money to charities, compared to 60 per cent in the U.S.”
“23. We have less income disparity: While the gap between rich and poor has become more marked in both countries, it’s more like a canyon in the U.S.
Secondly, the drop in charitable donations is a direct result of artificially low interest rates and its effect on the age group that gives the most to charity.
Adult Canadians in the oldest age group, 65 and over, donate the most, on average and low interest rates have the greatest effect on this age group.
“Mr. De Goey, a vice-president and associate portfolio manager with Burgeonvest Bick Securities, does not have an easy answer for people facing the challenge of ultra-low interest rates. He ticks off four main variables that investors can adjust when setting the stage for retirement: save more money; invest more aggressively and accept more risk (not necessarily a successful strategy over the past decade); accept a less glitzy retirement (by living on less money); or push out your retirement date (what Ottawa is encouraging everyone to do).”
Low interest rates PUNISH savers and REWARD borrowers. The largest group of savers are adult Canadians in the oldest age group which means as they suffer financially, so do charities.