The surveyed approximately 1,000 registered charities in Canada on March 11, 2026, and found that more than half received DAF grants or gifts in the past year. Their report, titled , explores charities’ relationships with DAFs and how these funds are shaping parts of the philanthropic landscape. The report contains six graphs of data and two pages of anonymous, DAF-related quotes from charities.

(2025), a paper by for the Pemsel Case Foundation, examines DAFs and proposes ways to address transparency, oversight and governance issues while preserving DAFs’ philanthropic benefits. The Pemsel Case Foundation is mandated to undertake research, education and litigation interventions to help clarify and develop the law related to Canadian charities.

(2025), by Dr. Sharilyn Hale and Keith Sjogren at Watermark Philanthropic Counsel, for TwinRiver Capital, answers the question: If given the opportunity, is there a desire from philanthropic actors to generate social/environmental returns now while making decisions about future giving in Canada? A is available, as is the .

(2025) is from a working group of the Canadian Association of Gift Planners co-chaired by and , with Keith SjĂśgren, the lead author. The report offers a comprehensive overview of current practices and common issues that are often experienced by foundation and charity executives, fundraisers, donors and professional advisors. The CAGP Foundation offers a suite of five practical resources, including a comprehensive guide.

, by the US-based Donor Advised Fund Research Collaborative (DAFRC), draws on data from Internal Revenue Service Form 990, Schedule D, for fiscal year 2024, and provides aggregate data on the number of DAF accounts, contributions to DAFs, grants from DAFs, DAF assets, payout rate and average account size in the US.

is one of many reports from the US-based Donor Advised Fund Research Collaborative (DAFRC). The report draws on interviews with 46 professional fundraisers, and offers practical strategies for identifying, cultivating, soliciting and stewarding DAF donors. focuses on Macro Trends, Donor Behavior and Management & Policy.

Influence, Affluence & Opportunity: Donor-Advised Funds in Canada (2023), a report from KCI and the CAGP Foundation, examines the relationships between charities and DAF donors and the foundations that act as intermediaries between them. It suggests strategies for charities and financial advisors to ensure they maximize engagement of DAF donors, and it identifies key areas for improvement in how DAF foundations can support donors and charities. It also quantifies the increasing contribution of DAF donors to the charitable sector in Canada and examines the challenges, criticisms and misconceptions around DAFs.

Donor-Advised Funds: 2023 Outlook, an essay for PANL Perspectives by Keith Sjogren, discusses what’s influencing DAF increases, changes in share within the DAF community, grants from DAFs and which charities benefit from DAFs.

In 2023, Christopher Dougherty received the H. Woods Bowman Student Award from ARNOVA for preliminary results from his .

Recently, completed research that asks, “How does government funding for charities change when the party in power changes?” His answer is based on data sets covering the provinces of Ontario and Alberta from 2003 to 2017. In a , he analyzed changes in electoral district representatives and governments, looking at which nonprofits gained new funding and which lost funding — and the extent to which the changes reflected the interests of new governments. Dougherty spoke to PANL Perspectives about his findings.

Question: What inspired you to tackle this study about government funding of charities?

The Allan Inquiry into environmental charities, under the Jason Kenney government in Alberta, cost taxpayers $3.5 million and concluded that environmental groups had done nothing wrong, aside from raise awareness about climate change — and a few charities sued for defamation afterwards. Photo is courtesy of Andre Forget.

Christopher Dougherty: ĐÓ°ÉÔ­´´ half of all revenue for the charitable sector in Canada comes from federal, provincial and municipal governments, and governments can be quite vocal about which charities they want to support and which they don’t want to. I’m originally from Alberta, so the , under the Jason Kenney government, was top of mind, as were the .

There’s also . So, I wanted to see how governments move charity funding around to match their policy and political goals.

Q: You write that in Ontario, changes in funding reflect partisan identity as governments and local representatives change. Can you give examples of this — or explain what you mean?

After the Dalton McGuinty government was elected in Ontario in 2003, Jewish religious charities, social services, health, animal welfare, and parks and environment all saw cuts that year or the year after the change in provincial government.

Christopher Dougherty: When there’s a new federal government, charities in Ontario see some of the biggest changes in funding. When I add together all of the federal government revenue to charities in electoral districts (excluding hospitals and post-secondary schools), they receive 27% more funding in a new government’s first year, when controlling for other variables. When I looked at a sub-sector, instead of an electoral district, new federal governments grant more to Ontario charities that are in the post-secondary education sub-sector, ‘other’ religious (not Christian, Muslim or Jewish) sub-sector, and social services sub-sector. Since post-secondary and social services are both provincial responsibilities, federal spending in these sub-sectors indicates something beyond direct program spending.

While new federal governments increase spending to some sectors after being elected, new provincial governments tend to cut spending. In Ontario, Jewish religious charities, social services, health, animal welfare, and parks and environment all saw cuts in the year or in the year after the 2003 change in provincial government, when controlling for other variables.

Q: In Alberta, there’s less change in funding to charities around elections and changes in government. Is there an example of this?

Read “Do Private Family Foundations Engage in Political Activities Through Their Granting?” by Christopher Dougherty.

Christopher Dougherty: Alberta sees far fewer changes and smaller changes to its funding following elections and changes in government. The biggest changes are increases to Christian religious charities and missionary religious charities in election years and in a new government’s first year. Funding changes in other sub-sectors involve smaller numbers of charities, so the changes might not be due to big patterns and are likely because of changes involving individual charities.

Q: You write, “The combined results show that the charitable sector is indeed an outlet for aggregating and expressing collective identities, but that the degree to which this happens depends on the political context.” What to you mean?

Samantha Zuhlke, a prof at the University of Iowa, found that politicians in the US use charities to access constituencies and political power. Canadian politicians seem to be doing the same thing.

Christopher Dougherty: One of the interesting things in these results is that elections, new governments, and electoral district competitiveness seem to be behind a lot of the changes in charity funding. The party that forms government, the party representing an electoral district, and whether an electoral district is in government or opposition all seem to matter less.

For me, this suggests that politicians use charity funding to achieve political goals: gaining or keeping power. Jane Jenson wrote more than 30 years ago that politics is about creating constituencies and building support for collective identities, which charities do, and Samantha Zuhlke found in the US that politicians use charities to access constituencies and their political power. Canadian politicians seem to be doing just that—trading funding (or the promise of funding) to constituencies represented by charities in exchange for votes. And, they are doing this more in electoral districts that are more politically competitive and that are located in more competitive parts of the country (in Ontario, for example, compared to Alberta).

Q: Did anything surprise you in this study related to charity revenue and government?

Christopher Dougherty: The degree to which federal government funding changes for charities in the post-secondary, hospital, and social services sub-sectors was surprising, because each of these sub-sectors is in an area of provincial responsibility. It will be important to take a closer look at what’s happening here.

The other surprising finding was the role of religious charities in the results. It’s not clear, in the data set, which funding is going to congregations and which funding is going to religiously-affiliated service charities, and that needs a closer look.

Overall, the results suggest some interesting trends, and I plan to look at other provinces to see if these trends show up in other places with different political situations.

Christopher Dougherty has PhD in Public Policy from the School of Public Policy and Administration and he completed a Master of Philanthropy and Nonprofit Leadership (MPNL), both at ĐÓ°ÉÔ­´´ University. His research focuses on the charitable sector in Canada. He’s currently a Visiting Scholar at the Business School of the University of St Andrews, in the UK. He can be found on .

Question: How and when does your company focus on the nonprofit or charitable sector?

Nik Nanos: Every day. We do research almost every day of the year. It never stops – and work about the nonprofit and charitable sector is among the most important that we do. We’ve been around quite a while, since 1987, and our company has run quite a number of projects.

In Canada, we research how to engage Canadians, how to educate them on big issues, how to have greater impact in terms of social causes, and how to navigate the ecosystems of donor engagement, stakeholder engagement, community engagement and government engagement, .

We’re also doing a lot of research on how to motivate volunteers and on volunteer burnout, and how to recruit board members, how to keep donors happy, and issues like that.

For the Nanos team, work with the nonprofit sector is among the more validating sectors for us, because the team feels like they’re doing public good by supporting the charitable and nonprofit sector.

Q: How many staff do you have and how many projects?

Nanos: We have 80 to 100 staff. We run between 40 to 50 research projects simultaneously, and we have dozens of active clients. We generate a smorgasbord of insights and analyses for different sectors, like the culture sector, the health sector, public policy, telecommunications. The diversity of work is what makes it fascinating.

Q: What’s an example of a recent initiative with a nonprofit organization?

Nanos: We’re doing five projects with nonprofit groups currently. I was just on a call with a nonprofit — a nonprofit with global reach. It’s looking at research to help with strategic planning and the impacts of their brand and visual identity. And because this charity receives funds from the government, it’s trying to better understand how different elements of its charitable mission resonate with Canadians.

Working with nonprofits ranges from issues related to women and children in other countries, to issues about homelessness, to arts and culture, to people’s perceptions related to diversity in the workplace, and .

Q: In the past few decades, has anything changed in terms of your clients or the sector?

Nanos: When I first started, 30 years ago, charities could do whatever they wanted. They didn’t need evidence. They’d decide, “Here’s what we’re going to do. This is our mission. Here’s how we’ll do it.” This was a world before the internet, and it was easier to manage stakeholders then — and a lot easier to manage information and brand identity and engagement. We’ve gone from that to a nonprofit sector driven by data and micro-targeting. Also, there are a lot more levers at their disposal, levers that are generally financially affordable.

However, I notice that we’re now going through a period of haves and have-nots in the charitable and nonprofit sector. The “haves” have the resources and talent to collect and use data – and they’re getting stronger. The “have-nots” are struggling to deliver on core missions, and they don’t have the time, volunteers or internal resources to use data.

Q: Does Nanos Research aggregate data from other sources, and does it collaborate with others?

No, we’re not aggregating data from other sources, and the research that we do is original. It falls into two buckets: (1) original, proprietary data; and (2) original data that’s shared with the sector.

For example, we do a quarterly webinar, , collaborating with the National Arts Centre and Power Corporation of Canada. I present data and insights, and a panel of diverse stakeholders talk about strategies that have upped their game. A few years ago, the genesis of that project was to help the arts and culture sector get through the pandemic, and it later turned into a vehicle to share data — for the whole sector — because there are many organizations within the sector that can’t afford to collect, manage and interpret data.

Q: What does the future hold for Nanos Research?

Well, two things: Geographic Information System (GIS) mapping and portal building. We’re going to continue to do the research that we’re doing. However, we realized that the data we’ve collected over the last 30 years is probably more important, more valuable, than our revenue. Nanos Research has data about the charitable and nonprofit sector – and data from other sectors – and our future has to do with commercializing that data.

The new GIS dimension, such as , presents data so that clients can target their resources. We have our own GIS team, and the maps visualize data to geographically target activities.

And, increasingly, we’re doing more portal building, such as , because clients are asking for studies and customized data portals, so that they can self-serve their own access, analysis and studies. We have our own data-portal team. Many clients don’t have statisticians and don’t want to create their own data infrastructure, and these portals allow clients to access data 24 hours a day, and are used internally and shared with key stakeholders. These interactive portals can generate more insights than printed or electronic reports. So, those are two new things.

Photos are courtesy of Nanos Research and Martin Lipman Photography/CREA.

Question: These are unique, powerful and beautiful. What’s the story behind them?

David Gourlay

David Gourlay: I started at Shepherds of Good Hope Foundation in April 2020, so it was during the pandemic. We had to significantly pivot in how we engaged community members, potential donors, fundraisers, everyone. This was the time to tap into curiosity and imagination. How would we get the word out to support our good work, to support individuals in our community who are homeless? We have a small team of seven people, and we had to reimagine fundraising and philanthropy.

I’m a huge music fan. One night, I was watching online music videos, and I saw a song from an organization, , which re-imagines and re-produces familiar songs by travelling the world and capturing different musicians, instruments and rhythms to create beautiful compilations of great songs. I heard an incredible version of Robert Johnson’s — and it triggered me. I said, “We should do this in Ottawa.”

We contacted a number of musicians, and chose the song , by The Beatles, because everyone knows that song and because it’s about hope, optimism, opportunity — things you need if you’re living on the street during an Ottawa winter.

Q: Did the musicians volunteer their time? How did that work?

Kathleen Edwards appears in “Here Comes the Sun,” at Quitters, a landmark cafe in Stittsville.

Gourlay: I worked with a series of incredible local musicians who put their hearts and souls into their respective pieces. They played outdoors, at landmarks in the Ottawa-Gatineau region. We put near the Beaver Pond, in Kanata. We put at the Pimisi Light Rail Train Station, in LeBreton Flats. We put Davis Dewan on Abbey Road, in Alta Vista, because of course, Here Comes the Sun first appeared on The Beatles’ Abbey Road album. , who helped put together the entire production, had a musical bit on the Flora Footbridge, in the Glebe.

We wanted to support the musicians, so we offered compensation. We never approached them assuming they were going to volunteer their time. It was Covid, so concert halls and live music had stopped. Musicians struggled — and they’re still struggling. Not all of the musicians accepted compensation, but we always offered it. The majority accepted.

Q: How do you measure success with these videos?

Gourlay: Success was based on community response and feedback. Also, we raised money on Here Comes the Sun, which we launched as part of a virtual event in June of 2021. The video went viral, thanks in part to , who had volunteered for us when she was a teenager and who posted about the song on social media.

And the feedback we got from many community members, and from around the world, was, “What a great thing to do — to lift up our spirits and to give us a few minutes of something positive.” We wanted the public to enjoy their community and recognize certain musicians and sites in their city — like playing the sitar at the Museum of History, with Parliament in the background. These were really cool impressions of our community.

After that, we did the song , by Ben E. King, when the pandemic, due to Omicron, got severe for Shepherds of Good Hope — when it devastated our volunteers and staffing in early 2022.

The song after that was Lean On Me, which was positive and depicted the value of community members helping one another. Each of our songs speaks to the values of our organization: empathy, compassion, community, belonging, acceptance, hope, optimism.

Q: Do the music videos raise much money or awareness, or both?

Gourlay: These songs raise money, and we more than break even. We raised $15,000 on Here Comes the Sun, which was remarkable, because we’d never done a project like that before. But these music videos aren’t huge donor opportunities. The main purpose is to introduce our organization to Ottawa – to people who don’t know much about us. Music is a universal and powerful language. Most people like music, and when they see something that’s unique and creative, they stop, listen and give us a few minutes of their time. Each video contained the Shepherds of Good Hope brand, and we were lucky that many community members, such as some residents at , spoke, danced, played the guitar and sang in the songs.

“We wanted the community to listen to Ozzy, to understand homelessness outside of stereotypes and stigma. Most homelessness is a temporary experience for people.” –David Gourlay.

So much of the work we do as fundraisers is to grow our brand, increase awareness, and hopefully, to create initiatives that resonate with people. Afterwards, people contact us to discuss philanthropic giving. The road to a donation isn’t just the direct ask. We have to be more imaginative to inspire people to consider a donation. We have to be more curious about how to incentivize people who aren’t giving.

It’s important for us to constantly incorporate into each video who we are as an organization. Here Comes the Sun included residents from The Oaks. Stand By Me included our volunteers from the kitchen, because volunteering during the pandemic was a huge challenge. Lean On Me included Ozzy, a shelter user who lives on the street and who’s very articulate about his struggles with trauma. We wanted the community to listen to him, to

Q: What’s next in terms of music and Shepherds of Good Hope?

Singer-songwriter Michael Curtis Hanna.

Gourlay: We have a new video, the fourth, , an original song by local musician and singer . Eric wrote the song, which speaks to our organization’s purpose. We just released it.

We tentatively have plans for a fifth video next year. And, now, we’re thinking, “What can we do with five songs? Is there a fundraising concert in the future? Could we bring the musicians together to showcase their talents?” There are all kinds of creative ideas that we’re looking at. We can tell our story through music.

Q: Do you have advice for others who are considering doing similar arts projects?

Gourlay: My advice is to be creative, to be imaginative, to be curious.

Gourlay: Ask yourself, “How else can you connect?” Interconnectedness as a community, as people, is at the heart of being an effective fundraiser. You have to have an ability to challenge your thinking and your team’s thinking on how to connect with people. We talk in fundraising about the “case for support.” Long gone are the days when a case for support is a 20-page pdf, a 10-page pdf, that somebody may read the first paragraph of, or not. You have to be very creative, very imaginative, very curious about what’s going to attract a person’s attention, because that’s a huge challenge in today’s world, with the saturation of social media, information, misinformation, all this kind of stuff. It’s hard to capture someone’s attention today.

Obviously, in terms of the mechanics of these projects, you need partners. You need to build relationships with the music industry or whoever. We work with members of the , which does fantastic work in our city.

And any nonprofit organization will benefit from having a team that’s imaginative, creative and curious — a team that works together to come up with ideas. It’s important to connect differently with the community, to connect with prospects and donors, and to spread the message about your work.

David Gourlay, Chief Executive Officer at Shepherds of Good Hope Foundation, is on . Photos are courtesy of Shepherds of Good Hope.

Joe O’Brien, Minister of State for Community Development, Integration and Charities, speaks with someone at the launch of the National Philanthropy Policy.

In December 2023, the government of Ireland launched the National Philanthropy Policy to deepen understanding and knowledge, to create an enabling environment and to accelerate engagement with philanthropy in Ireland for social good.

The policy focuses on five objectives between now and 2028:

1. Communication and Awareness Raising
2. Data and Research
3. Stimulating and Incentivising Philanthropy
4. Government and Sectoral Partnership
5. Capacity Building

Click .

Click here for a video recording of the event, as well as the new TD report, “Trust and Transformation – Canadian Women and Philanthropy,” and reports and resources from the Women’s Philanthropy Institute’s “Women Give” series .

The report examines the relationships between charities and DAF donors and the foundations that act as intermediaries between charities and donors. It suggests strategies for charities and financial advisors to ensure they maximize engagement of DAF donors, and it identifies key areas for improvement in how DAF foundations can support donors and charities.

It also quantifies the increasing contribution of DAF donors to the charitable sector in Canada and examines the challenges, criticisms and misconceptions around DAFs.

Download the free report here: Donor-Advised Funds in Canada, a report from KCI & CAGP, May 2023.

(The full, five-part series is downloadable as a pdf: What Can the Philanthropic Sector Take from the Downfall of Samuel Bankman-Fried and His Ties to Effective Altruism, a five-part series by Calum Carmichael (2023).)

Part 1: What’s going on here?

Prior to November 2022, Samuel Bankman-Fried (popularly known as SBF) was known as a . In both his career and giving choices he aligned himself with the ethos, methods and priorities of (often shortened to EA). In his early 20s, for example, he reportedly decided to work not for a charity but in finance, believing greater good would come from his earning more to give more. In 2018, at the age of 26, he founded the cryptocurrency trading company Alameda Research to profit from crypto prices being higher in Asia than America. The following year he founded the FTX Group of cryptocurrency exchanges to service the trades of Alameda and other clients, promoting his companies as workplaces of choice for effective altruists. He based the largest of the exchanges, FTX International, first in Hong Kong and then in the Bahamas to handle popular products not legal in the US.

For both the and , SBF was among the biggest contributors to Democratic candidates. In February 2021 he established the for charitable giving, donating $50 million US that year. In June 2022, with a net worth having peaked above $25 billion US, SBF signed the to donate most of his wealth during his lifetime or by will, with from FTX sources having already been earmarked for EA causes and organizations.

But in November 2022, all of this changed. Alameda and FTX declared bankruptcy. In December and into 2023, SBF was indicted on multiple charges of conspiracy to commit fraud, money laundering, foreign bribery and campaign finance violations. The charges came with a detailed of steps taken by SBF and his associates to misappropriate in customer deposits at FTX International and use them to cover not only losses at Alameda, but also real estate purchases as well as political and philanthropic spending. One executive from Alameda and two from FTX – all of whom publicly identify as effective altruists – have to fraud and agreed to co-operate with prosecutors. To date, however, SBF has pleaded on all charges. The is set to begin October 2023. If convicted, he could face up to 115 years in prison.

The admitted and alleged criminality of SBF and his associates have had wide effects. They’ve caused great financial harm to the customers and creditors of FTX, as well as to cryptocurrency markets. But they’ve also intensified pre-existing criticisms and suspicions directed to not only the ethos and methods of EA with which SBF had associated himself, but also the organizations of EA and their leaders who had associated themselves with him. These include , , the , and their co-founder . It was he who the young SBF that greater good could come not from his working directly for a charity but from pursuing a high-earning career in finance that would allow him to give more to EA causes.

Responding to the allegations and aware of the intensified criticism, in November 2022 expressed his personal dismay, shame and need to reflect:

If FTX misused customer funds, then I personally will have much to reflect on. Sam and FTX had a lot of goodwill – and some of that goodwill was the result of association with ideas I have spent my career promoting. If that goodwill laundered fraud, I am ashamed. As a community, too, we will need to reflect on what has happened, and how we could reduce the chance of anything like this from happening again…. I know that others from inside and outside of the community have worried about the misuse of EA ideas in ways that could cause harm. I used to think these worries, though worth taking seriously, seemed speculative and unlikely. I was probably wrong. –MacAskill

To be sure, the criticisms amplified since the downfall of SBF have been directed specifically toward Effective Altruism. That said, I believe they have ramifications that extend to the philanthropic sector as a whole. They deserve to be heard, reflected upon and heeded more widely.

What are we to take from this?

To support that wider attention and reflection, I’m preparing a five-part series for PANL Perspectives of which this is the first part. For this series, I’ve condensed the major criticisms of EA that have been linked to SBF and sequenced them into seven points grouped under three headings – as follows:

The philosophical foundations of Effective Altruism

1. The ethical bases of EA rely on a narrow version of utilitarianism to the exclusion of other ethical theories or considerations, such that they encourage its adherents – through their philanthropy – to pursue purportedly good ends using potentially harmful or corrupting means.

2. Those excluded considerations include human emotion or loyalty as guides to philanthropic choice, such that EA undercuts philanthropists’ agency and overlooks or opposes key aspects of human motivation.

The analytical approaches of EA

3. By relying on impartial reason to identify the philanthropic interventions that will do the most good, EA idealizes a methodology that quantifies and compares the value and probabilities of alternative and highly-speculative outcomes – thereby mistaking mathematical precision for truth and ignoring important qualities of human life and flourishing that are not readily quantified.

4. This methodology – bolstered by its ethical assumptions and claims of impartiality – cultivates hubris, a condescension toward and dismissal of contending priorities or sources of information, and the impulse to define and control philanthropic interventions on one’s own terms.

5. Moreover, this methodology – by focusing on separate, numerically-evaluated interventions – overlooks the wider behavioural, institutional or systemic conditions that might not only limit the effectiveness of the interventions themselves but also cause or perpetuate the societal ills they seek to address.

The ultimate effects of EA

6. By not addressing those systemic conditions, EA takes on a conservative agenda: one that distracts from and thereby perpetuates the political, social and economic status quo and the inequalities and deprivations therein.

7. Accordingly, in its formation, methods, application and effect, EA is elitist: it risks becoming an intellectual, do-gooder playground for the privileged who ultimately benefit from – and through their philanthropy avoid substantially changing or challenging – the inequalities of the world around them.

The next four part of this series

The four remaining parts of this series will appear in coming months. Part 2 provides an overview of EA, thereby setting the stage for the arguments, counterarguments and broader implications to follow. Parts 3, 4 and 5 cover those arguments and implications as they relate to the philosophical foundations, analytical approaches and ultimate effects. For each part, my goal isn’t simply to summarize the contended demerits or merits of EA, but to derive from them questions for the philanthropic sector as a whole – so that regardless of our different connections to the sector, we can each learn or take and possibly apply something from the downfall of Samuel Bankman-Fried and his ties to EA.

Photos are courtesy of Wikimedia Commons, Abraham OFM, Cointelegraph and Sam Deere.

Over the past five years, assets held in donor-advised funds (DAFs) in Canada have increased approximately 20%, much of it achieved by DAF-holding foundations associated with financial institutions and financial-advisor networks. Community foundations have yet to embrace flow-through DAFs, the most popular form of DAFs, to the same degree as DAF-holding foundations.

What is influencing DAF increases?

Given the maturing of the DAF sector, and the damage to asset levels inflicted by capital market value declines, and assuming that DAF granting rates will remain at current levels, it’s unlikely that this rate of growth will be maintained, and a more modest gain in asset levels is projected for 2023.

Asset levels in DAFs are influenced by a number of factors, including:

• the rate of new fund openings;
• the level of donations to both new and existing funds;
• distribution rates of funds;
• the flow of investment income; and
• the increase or decrease in the value of investment assets.

Average assets per DAF in Canada are about $275,000; as an average, this level is influenced by a relatively high number of funds – thought to be at least 10% of DAFs – with assets in excess of $1 million. For 2023, it’s not anticipated that this average asset level will decrease materially, although the experience in the US suggests that maturity, a rapid increase in fund numbers, and heightened granting activity will eventually lead to lower average DAF assets.

While most DAF indicators are positive, the level of awareness of DAFs among investors who make charitable donations remains low. In 2022, a survey by Mackenzie Investments indicated that less than 20% of investors were aware of DAFs. Both donor and advisor education are expected to be a key initiative for DAF foundations in 2023.

Changes in share within the DAF community

Qualitative research suggests that the appeal of administrative simplicity, convenience, privacy, and the need to integrate philanthropy into a multi-generational wealth plan will offset the impact of a weaker economy and lead to further increases in new DAFs at all types of foundations.

The link between philanthropy and wealth planning, coupled with the increased number of financial advisors with awareness of, and direct access to, DAF programs, may lead to a further erosion of the share of DAF assets held by community foundations in 2023, and a lower-than-average increase in the creation of new private foundations.

Based on data provided by Philanthropic Foundations Canada, there was a net increase of only 149 private foundations between December 2018 and September 2022. Based on a sample of 2021 DAF foundation data, it’s likely that the growth in number of DAFs with initial donations over $5 million during the same period was far higher.

Grants from DAFs

Preliminary estimates for 2021, indicate that the flow of grants from DAFs over the previous four years increased at a higher rate than the inflow of donations. This flow metric, together with an average DAF distribution rate of approximately 13%, goes a long way to counter criticisms of capital hoarding that is frequently leveled at DAFs.

Anecdotal evidence further indicates that high grant flows have continued into 2022, and there’s no indication the DAF donors plan to decrease their support to both national and local charities in 2023.

Charities benefit from DAFs

Large charities (hospitals, universities and disaster-relief organizations) continue to receive the bulk of grants (in terms of value) from DAFs, an area of concern to policy makers, some operating charities and other critics who would prefer to see a wider distribution. The support provided to small, local charities is a differentiator between community foundations and foundations linked to financial institutions, the latter tending to focus on planning and order execution services rather than their role as a charity.

The absolute number of charities benefiting from DAF grants has also recorded a significant increase. Using data filed by the foundations representing nearly 50% of DAF assets, the number of charities supported by the DAF community increased by 45% between 2018 and 2020, with one prominent DAF foundation recording an increase of 84%. Not only are the number of grants increasing but also the range of charities to which grants are directed is increasing. This expanding impact of DAF grants is expected to continue in 2023.

Regulation will likely increase

As the DAF sector becomes a more important participant in the Canadian charitable community, it will likely attract increased scrutiny from regulators. That was demonstrated in the April 2022 federal budget, and it’s likely that in 2023 there will be further initiatives taken to materially improve the collection of data dealing with DAFs.

The increase in the annual Disbursement Quota (DQ) to 5% from 3.5% (for charities with investment assets over $1 million) that has now come into effect is unlikely to have a significant impact on granting rates in 2023, other than at community foundations, where a majority of DAFs are in endowed, not spend-down, format. However, some other foundations that impose a DQ on each DAF will likely elect to change the required disbursement rate. This may lead to a clear distinction in 2023 between foundations, such as Benefaction, that imposes an internal DQ on all DAFs and foundations, such as the Private Giving Foundation and some community foundations, that allow donors greater flexibility by not requiring a minimum level of granting in any specific period.

Outlook: more growth

The outlook for 2023 is for further growth in assets and numbers of DAFs, as well as in the flow of financial support to operating charities.

The number of foundations offering DAF services will likely increase slightly, although the barriers to entry are getting more formidable as the sector becomes more concentrated among the largest community foundations (including religious communities) and bank-associated foundations and as the cost of technology increases, donors become more demanding in terms of services and reporting, and as the threat of disruptive regulation and more intense scrutiny becomes a reality.

is a consultant and researcher on wealth and financial services, as well as Chair of the MPNL Advisory Council. Read his 2021 article, “Fundraising Opportunities with High Net Worth Canadians & Their $5.9 Trillion.” Photos on this page are courtesy of Michelle Spollen, Justin Wilkens, Shane, Sean Pollock, Jungwoo Hong and Dahlia Katz.