Wealthy Canadians are sitting on extra cash after COVID-19 lockdowns — and struggling charities would like a cut

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Many of Canada’s embattled charities are still struggling to come to grips with plummeting revenue and a spike in demand for their services — and they’ve noticed that wealthier Canadians may have some extra cash to give.

The faith-based think tank Cardus tallied up changes in discretionary spending and found that the wealthiest 40 per cent of Canadians saved about $1,150 on average in the first two months of lockdowns. That adds up to about $5.3 billion across the country.

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Wealthy Canadians are sitting on extra cash after COVID-19 lockdowns — and struggling charities would like a cut Back to video

Although some charities have benefited directly and indirectly from government aid during the pandemic, some want the government to start matching donations as the programs taper off. Cardus estimates that people give 20 per cent more when they know the government will match it and, it could be even more effective if some Canadians are sitting on a pile of cash.

Michael Maidment, the CEO of the Ottawa Food Bank, said the pandemic was a perfect storm for his organization.

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The economic turmoil increased demand, with many people visiting the food bank for the first time, and also led to fewer donations. Social distancing rules meant that many of the food bank’s normal activities, where people get together to organize and sort donations, were no longer possible. Donations from bins in groceries stores tailed off because the shopping experience had changed so drastically.

“Now you mask up and you get into the grocery store and get out of there as quickly as you can,” said Maidment.

On top of that, donations of extra stock from the grocery stores also dried up because of the severe supply chain issues in the early days of the pandemic. None of the stores had any extra stock because people were buying it all up and the shelves were going empty.

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The initial shock has passed but now many charities are preparing for a prolonged downturn that could outlast the pandemic.

“What I’m really concerned about is the economics. We know the provincial aid and the federal aid have made an impact but that aid is not going to continue forever,” said Maidment. “Those people who are relying on CERB, will they transition to another program like EI or will they need to turn to a food bank?”

Organizations that provide services to the homeless are preparing for a second wave of COVID-19, along with economic issues caused by the pandemic and all the usual challenges in dealing with extreme weather. Demand for services has also spiked, along with the cost of fitting out workers in personal protective equipment.

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Deirdre Freiheit, the CEO of Shepherds of Good Hope, said her organization has been serving about 1,000 extra meals per month since the pandemic started despite a decrease in the amount of people staying in shelters.

“What we’re seeing is that people are coming for meals that are in the community because in many cases they’re having to choose between being able to pay their rent and put food on the table,” said Freiheit.

What I'm really concerned about is the economics

Like most charities, Freiheit said they peering into a deeply uncertain future.

“We just don’t know what it’s going to look like as we get into the fall and winter because things are not changing in terms of the need for it, by any stretch,” she said.

The report from Cardus took account of all the discretionary spending that wasn’t happening during the early days of the lockdowns, with things like travel and restaurant meals falling virtually to zero. The report combines that data with Statistics Canada information about where people are likely to spend.

The report highlights some stark divisions in who was hit hardest by the pandemic. Younger workers and lower wage workers were far more likely to lose income than anyone else. People with job security who were able to work from home saw big savings on some normal big ticket items, as daycares closed and planes were grounded.

“We know that the older and wealthier workers are the ones who were better able to weather the economic storm,” Daniel Proussalidis, the director of communications for Cardus.

Proussalidis said a big part of the battle is just reminding people that charities survive on donations and that they may be struggling these days.

“Canadians are generous. We know that,” he said. “I think one of the ways to really put that in people’s minds is for the federal government to step up and to do temporary dollar-for-dollar donation matching.”

• Email: sxthomson@postmedia.com | Twitter: stuartxthomson