1. The Changing Face of Canadian Philanthropy Presentation to United Way of Greater Victoria June 26, 2013

2. Key Questions What are the key trends that impact philanthropic support? What are the trends in how Canadians are donating/volunteering? How are charities adapting to these changes? What are the key issues for United Way? 2

3. Environmental Trends Continued economic volatility impacting economic growth, employment, corporate earnings. High levels of personal debt Low interest rates and unpredictable equity markets Globalization of Canadian corporations Canadian multinationals more outward looking Decision-making more centralized Major government funding cutbacks/restraint Governments haven’t articulated a position on the role of charities but want an increasing role in governing our activities: Bill C-470 Tightened definitions around “advocacy and non-charitable activity” Modest new tax measure to incent charitable giving (Stretch Tax Credit)

4. Trends in Giving and Volunteering Continued growth in the number of charities – 60,000 to 85,000 in the past two decades. More competition than ever Little change in charitable giving: 84% of Canadians aged 15+ donate to a charity/non-profit, down from 85% in 2004. Only 23.4% of Canadians actually claim a charitable donation tax credit Total donations at $10.6 billion, up from $9.9 billion in 2004 but flat after inflation Average donation of $446 but median amount $123 (half of donors give less than median) One quarter of “top” donors account for 83% of all donations Individual giving still highly correlated to age, income, education and religiosity Reasons for giving: Feel compassion for people in need (89%) Personally connected to the cause (85%) Income tax credit (23%) Reasons for not giving: Can’t afford it (71%) Happy with what has already given (64%) Give money to people not organizations (40%) Didn’t like the way the request was made (34%) Never asked (24%)

5. Trends in Giving and Volunteering Corporate giving declined from $2.4 billion in 2008 to $2.26 billion in 2010 Corporations set philanthropy budgets on a three year rolling average of their profitability Corporations favoring sponsorship and cross promotions to derive business benefit at the expense of traditional corporate philanthropy Private foundation assets declined from $7.7 billion in 2007 to $5.8 billion in 2008 and granting declined from $195 million to $172 million. Has since rebounded 47% of Canadians aged 15 years and over volunteer, contributing 2.1 billion volunteer hours, the equivalent of 1.1 million full time jobs While the participation rate has stayed stable, the number of hours volunteered has declined, from 168 hours in 2004 to 156 hours today.

6. Trends in Giving and Volunteering Donor perception of how organizations were using their money is less positive: 37% of donors do not think donated funds would be used efficiently (up from 33%) Men more likely than women not to give because they believe their donations won’t be used efficiently

7. Demographic and Social Trends Canada’s aging population will: live longer and need more income/assets for their support Be forced to put off retirement until later in life Yet, the income divide continues to widen with many Canadians growing richer and having the capacity to make major and leadership gifts: 4.9% of families with net worth of $1 million+ in the U.S. account for 42% of all donations For estates valued at $20 million+ in the U.S., half of the estate went to charities, 21% to heirs and the rest went to taxes Women are continue to out live men and Increasing numbers of women are taking volunteer roles in the not-for-profit sector as donors and leaders Traditional values about philanthropy are changing: Donors want more choice They want to clear evidence of impact/outcome They want to be engaged/involved They want more accountability and transparency They want to access information through digital and social media They want to see their contributions leveraged

8. How are charities adapting their fundraising? Fundamental re-tooling of resource development strategies and programs. Moving from transaction-based fundraising to relationship- based fundraising Diversification of revenue streams with focus on major and planned gifts – always having a pipeline of prospects and a range of product offerings Additional focus on cause related marketing and sponsorship opportunities with corporations Integration/alignment between fundraising programs – stop the silos Preparedness to spend more to raise more and to stop wasting time on low hanging fruit

9. How are charities adapting their fundraising? Providing donors with innovative opportunities (products) to invest and engagement/involvement opportunities Focus on donor retention/loyalty through effective stewardship and demonstration of real impact Connecting to prospects/donors through digital and social media Re-thinking of traditional volunteer structures/work, but getting maximum leverage from your volunteers Efficient back of house operations and systems Investing in talent development and staff retention

10. 10 Trends in Canadian Philanthropy Q Would you say the following fundraising techniques are in decline or growing in usage? Door-to-Door solicitation Collection plates/boxes Telephone solicitation Cause Related Marketing/Sales Direct Mail Draws/lotteries Events (dinners/galas/concerts) Sporting events/Marathons Corporate donations/sponsorship Major Gift Campaigns Planned Giving Declining in UsageGrowing in Usage Note: ‘Don’t Know’ not shown

11. Fundraising Cost Per $ Including Lottery 2a Fundraising Cost Per $ Excluding Lottery 2b Organization F’11 1 Cost Per $ 5-Year CAGR 3 TrendF’11 1 Cost Per $ 5-Year CAGR 3 Trend5-Year Average 4 F’11 Compared to 5-Yr Average BC's Children's Hospital Foundation$0.405.1%$0.292.3%$0.28 Calgary Health Trust 3 $0.5717.2%$0.4211.1%$0.33 Canadian Breast Cancer Foundation 3 $0.467.8%$0.467.8%$0.44 Canadian Cancer Society – Ontario$0.542.3%$0.422.8%$0.40 Centraide of Greater Montreal 3 $0.143.3%$0.143.3%$0.13 Heart & Stroke Foundation 1 $0.53-3.8%$0.42-2.3%$0.40 Mount Sinai Hospital Foundation$0.181.9%$0.181.9%$0.16 Plan International$0.429.9%$0.429.9%$0.36 Princess Margaret Hospital Foundation$0.45-4.5%$0.281.9%$0.28 SickKids Foundation$0.361.3%$0.27-4.6%$0.33 Sir Mortimer B. David Jewish General Hospital Foundation$0.296.9%$0.296.9%$0.25 St. Michael's Hospital Foundation$0.2310.2%$0.2310.2%$0.18 Sunnybrook Health Sciences Centre Foundation$0.269.2%$0.269.2%$0.24 Toronto General & Western Hospital Foundation$0.1716.9%$0.1716.9%$0.15 United Way of Calgary And Area 1 $0.173.4%$0.173.4%$0.16 United Way of Greater Toronto 4 $0.151.9%$0.151.9%$0.14 Vancouver Foundation 1, 3 $0.2031.0%$0.2031.0%$0.12 World Vision 1 $0.222.7%$0.222.7%$0.21 SickKids Foundation Ranking113 101 13 11 #1 in Category#2 in Category#3 in Category Source: Organization Annual Reports Note: 1) F’10 figures for Heart & Stroke, United Way of Calgary, Vancouver Foundation, and Vancouver Foundation, because F’11 financials aren’t available. 2a) Calculated by dividing total costs (Direct, Indirect, General Fundraising & Administrative) by the sum of fundraising revenue and gross lottery. 2b) Calculated by dividing total costs (Direct and indirect, excluding Lottery) by the sum of fundraising revenue. 3) Latest available 5-Year CAGR (F’06-10 or F’07-11). Due to data availability, 4-year CAGRs Canada Health Trust (’08-’11), Centeraide (’08-’11) and Vancouver Foundation (’07-’10). 3-year CAGR for Canadian Breast Cancer Foundation (’09-’11). 4) Where data is available. FavourableUnfavourableLittle change

12. 12 Trends in Canadian Philanthropy Q Does your charity offer options for directing gifts to specific programs? Note: ‘Don’t know (2%)’ not shown Sector Breakdown  Charities that offer options for direct gifts to specific programs

13. 13 Trends in Canadian Philanthropy Q How important is donor-directed funding to your charity’s bottom-line? 81% feel donor-directed funding is important 15% feel donor-directed funding is not important  Uniform across sectors

14. 14 How concerned are you that donor-directed funding will favour particular donation opportunities over other areas that require funding? Trends in Canadian Philanthropy Q Note: ‘Don’t know/Refused’ (4%) not shown 65% Concerned 31% Not Concerned  Uniform across sectors

15. 15 Trends in Canadian Philanthropy Q Does your charity use an online donation vehicle? Sector Breakdown  Charities with online donation vehicles 90% 84% 73% 67% 66% Hospital Foundation Environmental | Conservation Health Research | Support Humanitarian | International Aid Community Welfare | Public Benefit Religious Arts & Culture Educational Institution

16. 16 Trends in Canadian Philanthropy Q Approximately, how much of your charity’s annual total revenue comes through online donations?

17. Issues for United Way Vulnerability in the workplace fundraising channel Lack of investment in other fundraising channels Not building sustainable/predictable sources of revenue Brand awareness/confusion – not enough investment in the brand Structure of annual campaign drives transactional vs. relationship based approach to fundraising Retention and recruitment of top talent Lack of investment in gift and estate planning

18. Summary Uncertain economy, greater charity competition, and greater need for funds requires innovation and investment in fundraising/marketing Moving from transactional donor contact to relationship based donor contact Fundamental re-tooling of the United Way Campaign Investing in staff and systems to support fundraising and using new digital and social media channels to engage the public Demonstrating highest standards of stewardship, accountability and impact