Canadians questioning how charities are using donations, new study finds

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A growing number of Canadians are questioning how charities are using the more than $8-billion donated each year and are especially wary about groups focused on development overseas.

More than two-thirds of Canadians also believe there are too many charities raising money for the same cause and international development organizations are among the least trusted charities in the country, according to the report released Sunday by the Edmonton-based Muttart Foundation.

The 158-page report, called Talking About Charities 2013, is based on interviews with more than 3,800 people. It's the fifth survey the foundation has done since 2000 and it provides a rare glimpse into how Canadians view the country's 85,600 charities.

"Our role in commissioning this report is to provide an objective picture of the landscape in which charities operate," the foundation's president Dr. Ruth Collins-Nakai said in a press release. "There are parts of that picture that some will like; there are others that clearly indicate the need for action."

The foundation's executive director, Bob Wyatt, said charities play an important role in helping governments shape public policy because their work directly impacts people. "And in order to play a role, charities need to know what Canadians think of them and what the perception is," he said in an interview. "There are some findings in [the report] that indicate that charities need to do a better job in communicating with the public."

Overall the study found that a large majority of people, 79 per cent, said they had "some" or "a lot" of trust in charities and an even higher percentage said charities are important to the country, findings that have remained constant in each survey since 2000.

However, the level of trust in the people running charities has fallen to 71 per cent from 80 per cent in 2004. While the level of trust in many other professions, such as lawyers (52 per cent), politicians (33 per cent) and religious leaders (52 per cent), has also fallen, the drop for charity leaders has been among the steepest. Doctors and nurses scored the highest levels of trust at over 90 per cent.

Mr. Wyatt said the loss in trust in all professions raises some key questions. "Are we becoming a less trusting society and if so why?" he asked. "What's this telling us about Canadian society, not just in terms of charities but about who we are?"

A larger issue that the report raised was the attitudes toward charitable fundraising and how charitable organizations spend donations. While 70 per cent of those surveyed said they agreed that charities are generally honest about how they use donations, that has fallen from 84 per cent in 2000. And a rising number, now 25 per cent, disagreed that charities are honest about their spending.

"The fact that you have one in four Canadians who are saying they are not sure about [honesty], that gives me some pause for concern," said Mr. Wyatt.

Nearly 75 per cent of those surveyed also said charities spend too much on fundraising and administration. Mr. Wyatt said that response was among the most disturbing in the report. "What it means is we haven't told our story. People are not getting the message that in order to deliver programming you have to have staff," he said. "There are some myths out there that we have to counter now, we can't allow them to continue to exist."

Among the report's other findings:

• Canadians are divided 50-50 on whether there should be a legal limit placed on the amount of money charities can spend on fundraising. Roughly half said there should be a limit while half said it should be left up to charities to decide.
• The level of trust is highest for hospital charities and those that work with children, each scoring above 80 per cent.
• Just 50 per cent of those surveyed trust international development organizations. That has fallen from 57 per cent in 2006. Churches and other places of worship were trusted by 59 per cent of those surveyed and environmental charities by 67 per cent. Arts related charities were trusted by 60 per cent.
• Younger people are more trusting of charity leaders than older people. Among those aged 18-24, 79 per cent said they trust those running charities. That compared with 62 per cent for people over 65.
• Nearly nine in ten people, 86 per cent, believe that running a business is a good way for charities to raise money. But 70 per cent said there is a significant concern that charities could lose money on business activities.
• Only 21 per cent said charities are doing a good or excellent job at providing information about fundraising costs. And 26 per cent said they are doing a good or excellent job providing information on how they use donations.