The impact of inflation on philanthropy

Ashleay: Welcome to the “In Your Interest” podcast. My name is Ashleay and I'm joined today by my colleague Sébastien Mc Mahon. And this week, we have Catherine Tardif, Head of Philanthropy, to talk about how inflation is impacting the number of donations individuals can make and therefore how it's impacting philanthropy. So, hi, Catherine! Hi, Sébastien!

Catherine: Hi! How are you?

Ashleay: Great! Thank you. How are you doing, Sébastien?

Sébastien: Good. How about you?

Ashleay: I'm great!

Sébastien: Yeah, and it's fun to have Catherine here again this year. Last year we had you for… it's your second time.

Catherine: Yes, my second time. So, thank you for the invitation.

Sébastien: And as Christmas time is coming, what better time to start to think about philanthropy and how we can make a difference in other people's lives.

Ashleay: Absolutely. And we're actually talking about the economic situation and how households are feeling the pinch and are sometimes under financial pressure. So, Catherine, what can we do beyond making financial donations?

Catherine: You know, there's no doubt that charities need money to pursue their missions and help people in vulnerable situations. There's no denying that. If you're not, you know, in a position to donate for your own reasons, you can help in other ways, such as volunteering. Because yes, they need money, but oftentimes they need helping hands. They need people's energy to help out. The great thing about volunteering is the opportunities it offers, the rich encounters you can have. For me, if I can add a personal note, getting the family involved is a way of giving back, yes, of course, but also of giving these values to my children, the next generation who will in turn be able to contribute to their community. So, when we know that a lot, if not everything, depends on education, if you can make them aware at a young age of those social inequalities and the importance of giving, that's a really good start for me.

Ashleay: Absolutely. That was one of the things I was going to say, making young kids also aware of social inequalities. For example, I've been taking my daughter there for the past ten years. I've been taking her to the shopping centre where there's a kind of a system where you can pick the wishes of certain kids who have maybe a less of a way to get gifts at Christmas. And you can kind of read what their wish list is. And I remember one time, when she was very young, and it was to have warm winter boots, right? And so I asked her before we got there, “What do you think they're going to be asking for?” And, you know, it was dolls, it was bikes. It was this and that. And then she started to see the mitts and the winter boots and warm clothes and stuff like that. And I said: “Oh, would you want that for Christmas?” And she was kind of “Well, I mean, I already have that, you know.” So, it‘s something that‘s very interesting because then she started to realize: “Okay, hang on, not everyone has this luxury that we have, this luck where we can have food on our table every evening and that we can offer gifts that are more frivolous, maybe.” And now it‘s something that she has been keeping up every year. And actually, this year she was just asking me when we were going to go back. And this year also we’re volunteering to wrap those gifts right. You know, something that I just love doing is wrapping gifts. So we're going to be going on the weekend and we’re going to be wrapping a ton of gifts. So that's fantastic. But like you said, I think it’s people‘s energy and teaching other generations how important it is to know what‘s out there, and you know it‘s not just us with our nice little white picket fences.

Catherine: And you’re going to give her this habit, and she's probably going to do that with her children when she's older. So that's amazing.

Ashleay: Yeah.

Sébastien: Yeah. That makes a real difference in people's lives, a concrete difference, and it’s a kid's Christmas that‘s going to be much brighter because of this. And remember we were discussing at the beginning the impact of inflation and the economic situation? Well, there is no such thing as an average Canadian, right? So during this recovery, we always tend to use those fancy pictures, the economists, about was it going to be like a V-shaped recovery, where the economy slows down and then rebounds quickly; or L-shaped, where the economy just stalls and then stays, goes sideways for a while. But now we realize it's more of a K-kind of recovery. Everyone kind of had a setback at first, but there are some households where the recovery was pretty swift. If you have a house, the value of the house went up quite a bit during the pandemic. If you have a pension fund, if you have assets, well the markets were pretty kind. But there are some people who are renters and who don't have assets. Now, they're facing higher price levels. You remember, I think it wa more than a year back when we had someone from United Way coming here, telling us that they go out with people. They help them at the grocery store. And some people just see the price of meat and, you know, they pretty much just start crying: “How am I going to be able to afford that?” There are some people who are in this situation. So, you cannot generalize. You cannot say, well, now Canadians are better off post-pandemic. There are more needs. There's more inequality. That means that some people have more needs. Some people have a rising capability to help others. So, if you're in a position to help others, it's very important, and more important even now than it was a few years back.

Catherine: Yes, and you see it in the field! You see the food banks are empty right now. And, you know, we get phone calls from different food banks across Canada, and they are empty. It's not just on paper and in the news. It's really happening in the field. So we need to think about that.

Sébastien: Recently I was reading some alarming statistics: 1 in 5 Canadians will be affected by a mental illness in their life. So, it's not just a small minority and it can affect anyone. Food bank use also reached the highest levels in Canadian history at one point in 2023, with almost 2 million visits in a single month. So it's not, again, the minority here that is concerned. In the province of Quebec, of course, where we're based, more than a third of people that are suffering from food insecurity are children. So again, going back to your example, Ashleay, helping the children makes a big difference. And again, as good corporate citizens – and Catherine, this is where you're involved here at iA – organizations cannot claim that they will change everything, but they certainly have a role to play in helping the community, and can act as agents of change.

Catherine: For sure. And if I may, Sebastien, I'm going to go back to one point that you mentioned. I often get asked: “Oh, what's a normal donation? How much should I donate?” And there's no answer to that. I mean, it may sound really cliché, but I firmly believe that there's no such thing as a small donation. The important thing is to give, and to give within your means. And I think when it's part of your DNA – we were talking about that, Ashleay – when giving is a habit, you've already won something. Because of course, sometimes you might be a bit tight in your budget, but I think that's part of life and that's okay. But you can certainly adjust your philanthropic budget accordingly. I think the important thing is, at the end of the day, just try to make this small gesture. You were talking about corporate philanthropy, Sébastien…

Sébastien:  Hmm hmm.

Catherine: I really think that's so important. It can take different forms, but it has to have one common objective, which is to maximize our impact in the community and, you know, contribute to making a little difference. And this can take lots of forms and shapes. It can start with an internal fundraising campaign. We have a really important one at iA with the United Way. And for organizations like iA, we can be facilitators by integrating payroll deduction, which is great. It's so easy. It's simple. It's a simple way to give. And you know, $1 a day from your pay cheque can send 30 people home with a complete grocery basket and cooked meals. So, you might think: “Oh, $1 a day, that's not much. I'm not going to go there.” But you know what? At the end of the day, it is the strength of the group that's going to make a really important difference.

Sébastien: And just like reaching your financial goals, this is a thing that we're always discussing in the podcast here, that making small changes in your habits can lead you much further. And, you know, it's true for your RRSP. It's true for whatever financial habit that you can have. But to just commit yourself to giving regularly, you don't even have to think about it after that, and you're making an impact daily.

Catherine: And you can get a tax receipt as well, you know, with the payroll deduction as well. So that's great. And you can also think about volunteering. I was talking about that earlier on, but you can encourage your employees to volunteer either by providing financial support for the causes in which they get involved, or by offering time so that they can in turn give their time to charities. And I love to talk about volunteering your expertise, so you can donate your expertise to a charity. Sometimes they don't have, unfortunately, the resources to do the communication, the dotation. So if you can offer your expertise, that's an enormous value for the charities. You also have matching donations, which is really a nice thing to do. So if you contribute, your employer can contribute as well. So that's a win-win situation for everyone.

Sébastien: And also a very important point that we've discussed in the past is the notion of employee loyalty, mobilization and commitment. I was reading an article recently saying that the labour shortage was continuing to affect companies just about everywhere, particularly in the province of Quebec where we live, and that companies needed to stand out in the philanthropy world, because this can be a lever for both attracting and retaining talent. The new generation of workers, they're very sensitive to that and if you want to attract the best talent, having a clear plan in place for philanthropy goes a long way in attracting talent.

Catherine: Yes, I'm convinced that it's a really important element and we see it in the studies. You know, it's very revealing. I believe that candidates will be a lot more attracted by an employer who has a positive impact on society and who shares the values of solidarity and mutual aid. And we can also think of an activity that we like to do at iA: the team building opportunities that volunteering activities provide, which are valuable not only for the employees, but also for the charities that benefit from them.

Sébastien: Yes, for sure. And you know, we're approaching the festive season and the new year. So typically, at the end of the year, we start to think about resolutions. We want to work out more, read more, learn something new. Well, why not give more? You know, “contribute more to my community”. Anyone going in that direction will tell you, you grow so much from helping others.

Ashleay: That is so very true. And if someone is not in the habit of giving, perhaps take a step back and find out more, learn about things that appeal to you and how you can support them. And however modest it may seem, any kind of philanthropic action often brings great satisfaction and a feeling of well-being. Kind of like dessert. Once you start, you can't stop! Right, Catherine?

Catherine: That is exactly true. For me anyway.

Ashleay: So that concludes this week's episode. Thank you, Catherine, and thank you, Sébastien, for coming to help clarify our philanthropic involvement.

Catherine: Thank you so much. Thanks for having me.

Sébastien: It's always a pleasure to have you, Catherine.

Ashleay: Thanks to everyone at home, and we'll see you next week. Loved this podcast? Want to know more about economic news? Follow our “In Your Interest!” podcast, available on all platforms, visit the economic news page on ia.ca or follow us on social media.