Private Foundations Expand as Public Foundations Close Down in Past 10 Years

By Don McRae.

As I mentioned in “Four Trends in the Creation & Shutdown of Registered Charities in Canada in 2023,” the number of private foundations in Canada continues to grow, while the number of public foundations continues to fall. As of early 2024, there were 6,770 private foundations registered as charities, compared to 6,102 in 2021. Meanwhile, the number of public foundations decreased to 4,780, as of early 2024, down from 4,944 in 2021. In fact, as shown on Tables C and F (below), the decline in public foundations and increase in private foundations have been occurring for some time. To find out more, I took a closer look at 10 years of data about registrations and revocations of public and private foundations, data from the Canada Gazette and T3010 tax forms. (For the complete series of articles from Don McRae, see the “Charity Revocations” Series.)

Ten Years of Public Foundations Closing Down

Public Foundations are falling out of favour as a method of helping Canadians build our society. The numbers show it, and they demonstrate that this has been happening for some time. And there were surprises in what I found. While I expected most foundations to be under the Community Benefit heading (hereafter referred to as Community), I didn’t expect the percentage to be so high: 86.7% of public foundations are registered under Community (see Table A).

Also, you’ll notice in Table A (below) that the number of public foundations (registered as charities) took a dip at the start of the pandemic. Registrations started to increase in 2021 and 2022, but they took a real dip, to 38, in 2023. (Note, I actually looked at additional data, back to 2007, and the 38 registrations in 2023 is still the lowest number of registrations in the past 17 years.)

Table A: Registrations of Public Foundations from 2014 to 2023

	Religion	Poverty	Community	Education	Total
2023	0	0	36	2	38
2022	3	4	63	1	71
2021	3	1	48	9	61
2020	2	1	49	5	57
2019	1	3	84	2	90
2018	7	1	68	9	85
2017	4	1	71	2	78
2016	4	0	64	7	75
2015	1	1	70	9	81
2014	5	3	63	4	75
Total	30	15	616	50	711
%age	4.2%	2.1%	86.7%	7.0%	100.0%

Correspondingly, 78.5% of revoked public foundations are under Community (see Table B, below); the major charitable category revoked was “Community benefit – foundations,” with 94 charities in 2023 and 84 charities in 2022. And 13.5% of revocations were for Education charities.

Table B: Revocations of Public Foundations from 2014 to 2023

	Religion	Poverty	Community	Education	Total
2023	9	1	105	14	129
2022	5	3	92	19	119
2021	6	2	84	17	109
2020	6	0	50	11	67
2019	7	3	117	18	145
2018	7	2	88	21	118
2017	4	0	87	11	102
2016	5	5	74	11	95
2015	10	1	83	16	110
2014	7	5	88	11	111
Total	66	22	868	149	1,105
%age	6.0%	2.0%	78.5%	13.5%	100.0%

And as shown on Table C (below), there have been 711 registrations and 1,105 revocations for a net loss of 394 public foundations in the last ten years. In fact, 2012 is the last time that there were more public foundation registrations than revocations. So, the decline has been occurring for some time.

Table C: Public Foundation Revocations Over Registrations from 2014 to 2023

	Revocations	Registrations	Variance
2023	129	38	-91
2022	119	71	-48
2021	109	61	-48
2020	67	57	-10
2019	145	90	-55
2018	118	85	-33
2017	102	78	-24
2016	95	75	-20
2015	110	81	-29
2014	111	75	-36
Total	1,105	711	-394

It’s unclear why public foundations have fallen out of favour. It could be that it takes more organization and collaboration to create a public foundation. Maybe Canadians aren’t supporting these groups to the level they were before. (United Ways have certainly found that out in terms of revenue.) It could be that governments and other funders have changed their priorities.

The Past 10 Years of Private Foundations Growing

New private foundations (65.9% of them) are registered mainly under the heading of Community, with Religion taking second place, at 16.8% (see Table D, below). There was a small dip in the number of registrations in 2020, probably due to the pandemic, but new registrations more than recovered in 2021 and onward.

Table D: Registrations of Private Foundations from 2014 to 2023 

	Religion	Poverty	Community	Education	Total
2023	84	50	198	35	367
2022	68	36	208	22	334
2021	77	41	201	41	360
2020	38	20	156	25	239
2019	41	13	192	25	271
2018	27	14	145	20	206
2017	36	9	179	21	245
2016	22	11	121	11	165
2015	13	7	147	19	186
2014	18	8	112	8	146
Total	424	209	1,659	227	2,519
%age	16.8%	8.3%	65.9%	9.0%	100.0%

In Table E (below), you can see that Community private foundations make up 68.3% of revocations, with Education coming in second, at 17.6%.

Table E: Revocations of Private Foundations from 2014 to 2023

	Religion	Poverty	Community	Education	Total
2023	16	1	93	22	132
2022	20	3	101	20	144
2021	12	2	89	21	124
2020	12	0	60	28	100
2019	11	3	103	22	139
2018	16	2	89	26	133
2017	12	0	56	16	84
2016	13	5	66	21	105
2015	14	1	77	18	110
2014	20	4	75	14	113
Total	146	21	809	208	1,184
%age	12.3%	1.8%	68.3%	17.6%	100.0%

As seen in Table F, below, registrations outnumber revocations of private foundations. There were 2,519 private foundations registered in the ten years from 2023 to 2014. Conversely, there were 1,184 revocations. That’s a net gain of 1,335 private foundations in the past decade. What’s striking is that registrations outnumbered revocations in all ten years (and of note, registrations outnumbered revocations all the way back to 2007).

Table F: Private Foundation Registrations vs. Revocations (2014-2023)

	Registrations	Revocations	Variance
2023	367	132	235
2022	334	144	190
2021	360	124	236
2020	239	100	139
2019	271	139	132
2018	206	133	73
2017	245	84	161
2016	165	105	60
2015	186	110	76
2014	146	113	33
Total	2,519	1,184	1,335

Why All This Matters: A Major Shift in Canada?

I, for one, am concerned that there are fewer public foundations than before, because the trend suggests that our common understanding of charity is changing from a public duty to private effort and, frankly, moving toward a more Statute of Elizabeth I interpretation of how our society takes care of others. In other words, what we view as worthwhile charitable causes or acts is becoming more privatized, more limited and perhaps more about the rich giving to the “needy” (there are still Canadian charities that use that term).

When you consider the number of closed charities, including shuttered public foundations, you have a picture of a loss of a number of community organizations in all parts of Canada — in cities, towns and villages across all provinces and territories — encompassing every major activity that charities undertake.

The increase in private foundations may reflect the current distribution of wealth in Canadian society and the increasing gap between those who have and those who don’t – or more precisely, between those who have a lot and those who deserve a whole lot more. However, the increase in the number of private foundations might also suggest that our society may be increasingly viewing monied individuals’ or families’ predilections of charity in a more favourable light than collective or community responses. If so, we’re poorer for it.

Don McRae is an old, left-handed, male, Scottish agnostic with Wesleyan-Methodist grandparents (hence the agnosticism). He’s also a former federal public servant and a longstanding volunteer, consultant, writer and researcher on the charitable sector. For more than ten years, McRae has studied trends in the charitable sector by analyzing the revocations of charitable status that are published in the Canada Gazette. He digs deeper into trends by examining data from annual charity tax returns (T3010 forms) at the end of the calendar year, and looks at newly registered charities to see what replaces the revoked ones. McRae can be found on LinkedIn.

Photo is courtesy of Janko Ferlic.

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Tuesday, April 9, 2024 in Data Discoveries, Don McRae, For homepage, News & Events, Private Foundations, Trends
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