2023 Financial trends for NPOs in Canada: Changing Donor Demographics

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<strong>2023 Financial trends for NPOs in Canada</strong>: Changing Donor Demographics

The third in a three part series on financial trends for NPOs in Canada, this post talks about changing donor demographics

NPOs in Canada are feeling the effects of a number of different financial trends, not the least of which is changing demographics. As the population shifts, so does the donor base - with millennial donors having a very different set of priorities than their parents did. Add to that changes to “who” we are serving, with NPOs rising to the challenge of meeting the needs of a population that is more diverse and aging, and things look very different today than they did 20 years ago.

The changing demographics of the nonprofit sector include more people of color, more seniors, and more young people. This is in keeping with the changing demographics of Canada as a whole. The number of nonprofit organizations has increased over the past decade, while the number of volunteers has decreased. This trend is likely to continue, as the sector becomes more professionalized.

  1. Donor Diversity

More and more, Canadians come from a vast range of nations, races, religions and heritage. Known for its French community, Canada is actually one of the most ethnically diverse countries in the world and is home to an astounding 200+ different languages. This multicultural diversity is a result of centuries of immigration and is now one of the most distinctive features of Canadian society.

In recent years, there’s been a growing trend amongst Canadian nonprofit donors towards diversity and inclusion, and many organizations are actively seeking to engage and appeal to donors from diverse cultural and ethnic backgrounds. This shift has been largely a result of the recognition that Canada is a multicultural society, and that the nonprofit sector needs to acknowledge and respond to this reality.

Specifically, there has been an increased focus on engaging donors from immigrant and refugee communities, who have different giving patterns and motivations than donors from other, more established communities. Nonprofits are realizing the importance of understanding and respecting the cultural and religious practices of these communities, and tailoring their fundraising strategies accordingly.

From targeted messaging and partnerships with community leaders, to creating culturally-sensitive events and campaigns, nonprofits are appealing to ethnic communities by acquiring a deeper understanding of their culture, values, and beliefs. By taking the time to build relationships and tailor both their messaging and approach, Canadian nonprofits can successfully engage and appeal to these communities, and build support for their important work.

  1. An Aging Population

By 2031, one in four Canadians will be 65 or older. The aging population in Canada is one of the biggest challenges facing the nonprofit sector. As people age, their giving patterns often change, and this can have implications for nonprofit organizations that rely on donations to fund their programs and services.

Senior members of society often shift their giving patterns towards organizations that address issues related to aging, like healthcare or retirement support. This can result in decreased giving to other types of organizations, particularly those focused on youth or the environment. Add to that the reality that seniors often have limited income or resources available for charitable giving, especially if they are living on fixed incomes or facing rising costs - which is very much the case in today’s economy. Another very real impact of an aging population is a decline in volunteerism. Seniors often have less time and energy which can impact the capacity of nonprofit organizations to deliver services and programs.

On the plus side, while older adults may give less during their lifetimes, they are often more likely to leave bequests or make planned gifts to nonprofit organizations. This can provide a steady source of income for nonprofits with such a large portion of society (25%) being 65 or older. 

Overall, the aging population in Canada is having a complex impact on donations in the nonprofit sector. While there may be some challenges associated with decreased giving or changes in volunteerism, there are also opportunities for nonprofits to engage older donors through bequests and planned giving, and to adapt their fundraising strategies to better connect with this important demographic. Nonprofits should consider offering health and wellness programs, social activities and recreation, and financial assistance to better connect with and support senior donors.

  1. The Rise of the Millennial Donor

The millennial donor (also known as GenY) is a new breed of philanthropist. This group is made up of individuals who are highly educated, tech savvy and passionate about making a difference in the world. They are also very interested in issues of social justice and environmentalism. What sets them apart from other donors is their willingness to engage with causes on a more personal level. They want to see the impact of their donations and they are not afraid to ask tough questions

Millennial donors are interested in a wide range of issues, including social justice, environmentalism, education and health care. They are also very interested in supporting causes that benefit marginalized groups, such as women, immigrants and minorities. Millennial donors are very strategic in their approach to giving and want to ensure that their donations have a real and lasting impact. They are also interested in supporting organizations that are transparent and accountable.

One of the biggest challenges facing millennial donors is finding trustworthy organizations to support. They also want to make sure that their donations are having a real and lasting impact. Another challenge is the competition for their charitable dollars from other causes and organizations.

The future looks bright for the millennial donor. This group is highly engaged and interested in making a difference in the world. They are also very strategic in their approach to giving. As more and more members of this generation enter the workforce, we can expect to see an increase in philanthropy among millennial donors.

Overall, adapting to changing donor demographics requires a proactive and strategic approach. By understanding and responding to the needs and preferences of different donor groups, Canadian nonprofits can build stronger relationships with donors, drive impact, and achieve their mission.

The rise of digital fundraising has had a positive impact on donor demographics. With the increasing popularity of online giving, charities are able to reach a wider audience and attract donors from different age groups and backgrounds. Younger donors are more likely to give online, and digital fundraising has made it easier for them to make small, regular donations.

Despite complex demographic shifts, the nonprofit sector in Canada has been doing relatively well. Overall fundraising levels have been strong, and many organizations are reporting increased demand for their services. With a clear understanding of the evolving donor base and a shift in fundraising strategies and messaging, Canada’s nonprofits are in a good position to make a positive impact on society, in spite of the challenges they’ve faced of late. 

Omar Visram
About Omar Visram
Omar Visram is the Co-founder and CEO of Enkel Backoffice Solutions Inc. Headquartered in Vancouver, Enkel provides bookkeeping, payroll, accounts payable and accounts receivable services to over 300 organizations Canada-wide.