Unveiling the Landscape (#1): How did we get here?

2024 Landscape Report Blog Series

This four-part blog series is a deep dive into the 2024 Landscape Report, which offers a comprehensive view of Canada’s philanthropic landscape. The blog series summarizes the key findings and provides additional narratives and reflections from presentations we made about the research and feedback received from a range of stakeholders. The Landscape Report is a crucial starting point for philanthropic research conversations, and we invite you to be part of this discourse.

In this first blog, we delve into the Introduction (snapshot data) and the first section of Chapter 1 (the Canadian narrative). Subsequent blogs will cover more sections.

How do we talk about how we got here?

The story of the growth of Canada’s philanthropic foundations, as comprehensively detailed in the Landscape Report, is most compelling. Since 2005, there has been a 25% growth in philanthropic foundations, up approximately 2200 foundations (from 8,852 in 2005 to 11,061 in 2021). From 2018-2021, the research demonstrated an increase of 23% in giving to qualified donees by public foundations (from $4.42B to $5.45B) and a 72% increase by private foundations (from $2.60B to $4.74B). The annual giving to qualified donees is nearing $10 billion. There has also been growth of $100B in assets since 2008, from $35B to $135B held by foundations.

The data has many essential nuances, like the tips of the iceberg, revealing a need for greater depth and breadth of discovery. For example, in 2012, private foundations became more numerous than public foundations. One explanation from previous research is that the trajectory follows the growth of individual and family wealth in Canada. Public foundations have recently seen decreased numbers, yet not in their assets. This could be part of the emerging donor-advised funds (DAFs) story, a type of philanthropic vehicle administered by a third-party charity created to manage charitable donations made by an organization, family, or individual. The increases in public and private foundation giving from 2018 to 2021 are partially due to increases during the COVID-19 pandemic. Yet, the increases were present in the data before COVID-19 as part of an existing trend that saw rising giving numbers. This increased giving is partly due to the rise of total foundations.

The $100B asset question grabs attention. However, the nuances of the number are just as important as the statistic itself. First, there is evidence of changing investment strategies from fixed income to equities and alternative investments before and in the growth time frame, which could lead endowments to more significant aggregate growth. These practices, shared by fund managers, wouldn’t differ from how they advised other clients, such as corporations. Second, the Landscape Report’s interview and historical desk research show an average of 7-8% annual returns for philanthropic foundations. Those returns are targeted to meet the disbursement quota, cover inflation, and pay for operations and fund managers. Third, in this timeframe, the asset growth demonstrates approximately a 10% compound interest, but the field added 2200 foundations, meaning that growth is under 10%. In looking at the number from this perspective, we might ask why there isn’t more growth. Perhaps it reflects the fiscally conservative nature of many foundations.

The research also demonstrated foundations’ norms and values of real capital preservation, which drive many investment decisions. If this norm was ‘nudged’ to feel more comfortable with some spending from the corpus, then perhaps we might see less aggregate growth. It’s a challenging place to be – if foundations were less cautious and more risk-tolerant, the aggregate growth might have been more remarkable, but critics would also point to greater wealth-holding (or “hoarding”) levels. Less consistent aggregate growth might be seen if norms and values are nudged.

While the snapshot data clearly shows this growth story, how we talk about the journey to this place could be clearer. There has been a tendency to use historical timelines to tell the story of philanthropic foundations in Canada, describing English/French/Indigenous or Protestant/Catholic/Jewish lineages. Each is a significant narrative to tell. Yet, in their linear timeline retelling, the complexity of how they have existed together is obfuscated. The report tried a different framing, the micro (individual), meso (group), and macro (field), to see if it might yield slightly different perspectives.

The report demonstrates the cultural norms of individual generosity and gifting in Canada, such as personal donations (time, treasure, or talent) to local charities, communities, and individuals. There is evidence of similar norms and stories of giving across peoples. Yet, these are enacted in different ways and styles. Looking at the group level, the report describes how sub-groups are essential for understanding how giving becomes structural. Giving narratives within Canadian philanthropy have taken direction from specific groups. Other sub-groups have and continue to remain outside of any philanthropic research, and their practices have not been taken into the philanthropic field. This (in)visibility has implications for the most macro level, the philanthropic field, and the report reflects on how the field has been built as it is, who built it as such, and why those choices were made.

So, how do we talk about how we got here? As the report demonstrates, we observe growth in much of the snapshot data and a strong desire to comprehend philanthropic foundations. There is no single path that leads to this point. While the tips of the iceberg might not provide a neat narrative, they highlight areas that require reflection, pose additional research questions, and guide us in the direction of travel. The potential – and need – for further research and discovery in Canada’s philanthropic foundations of the future is vast, and it necessitates an active reflection of today’s narratives and practices.