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The Economics of Charities Serving Indigenous Peoples

Chapter one: The influence of charitable activity on Indigenous communities’ well-being and other socio-economic outcomes
Hitherto and within the Canadian context, no one has investigated the role played by the charitable sector on the economic well-being for “on-reserve” First Nations and Inuit communities. On the one hand, Indigenous peoples face longstanding and complex social problems and economic hardships. On the other hand, there are charities which provide public goods and services and benefits to communities by helping to fill needs.
This is the first study to examine how the presence of charities may affect some measurable socio-economic outcomes of Indigenous communities and their people, by triangulating data from multiple sources: administrative data from the Canada Revenue Agency (CRA) on registered charities, the 2001 and 2006 Census Surveys, the 2011 National Household Survey and the Community Well-Being (CWB) Index developed by the Aboriginal Affairs and Northern Development Canada (AANDC).
My findings indicate that having access to at least one charity is associated with increases in a community well-being measure of 3 points on a 100-point scale, in household income (5.1%) and in individual’s wages (6.9%). When the number of charities increases in a reserve by one unit, the CWB rises by 1.1 points (on the 100-point scale), household income by 2.7%, individuals’ total income by 1.9% and individuals’ wages by 3.4%.

Chapter two: Government funding to Indigenous charities
The government is an important revenue source for charitable organizations in Canada. Big differences in public funding can be observed across registered charities that serve Indigenous peoples and all other registered charities. Using charitable organizations’ tax returns, the T3010 Registered Charity Information Return for the years 2003 to 2017 I investigate these government-funding patterns. I test different hypothesis on financial support from government sources by discerning first between Indigenous and non-Indigenous charities, and second between Indigenous charities on reserve and off reserve. I also analyze the relationship between the funding across levels to see if one level of government funding is contingent on other levels.
The results of my study point to a higher likelihood of Indigenous charities receiving government support as compared to non-Indigenous charities, with a 24% increase in the predicted probability of funding. Indigenous charities on reserve have a predicted probability of receiving government funding that is almost 17% lower than those off reserve. From the exploration of the link between the three levels of Canadian government funding for Indigenous and non-Indigenous charities two insights emerge. Firstly, the federal government is more likely to support Indigenous charities if they do not receive any other public funds, and the provincial government supports them if they do not get any municipal funding. Secondly, Indigenous charities are more likely than non-Indigenous charities to get both federal and provincial funding, and federal and municipal funding. The comparison between Indigenous charities off reserve and on reserve reveals that the on-reserve ones are less likely to be funded simultaneously by two levels of government.

Chapter three: The causal relationship between government funding and donations to Indigenous charities
While billions of dollars are donated annually to charitable organizations, relatively modest amounts go to charities that specifically serve Indigenous populations. In comparison to their non-Indigenous counterparts, these charities get fewer private donations, have less fundraising revenue and receive less gifts from other charities. This chapter studies the causal relationship between public funding and these three types of revenues, focusing on the Indigenous charities and distinguishing between on-reserve and off-reserve charities.
I use the large T3010 dataset with financial information for over 95,000 registered charities, covering a 15-year period from 2003 to 2017. The estimation and identification strategy relies on novel instruments using a 2SLS model. The results indicate a crowding out effect of public funding on donations for Indigenous charities; I also find evidence that the level of government funding matters.
With the preferred instrument, a one dollar increase in government funding crowds out seven cents of private contributions; the three levels of federal, provincial and municipal funding decrease private donations by 15, 6 and 46 cents respectively. Government funding negatively affects fundraising effort and gifts from other charities. For every dollar in public support the former decreases by one to seven cents and the latter by three to 12 cents. These reductions imply an economically substantial effect on charities’ revenue. Little evidence is found that government grants impact differently Indigenous charities on reserve compared to those off reserve. The area and programs in which charities operate matter though, which is critical for how governments structure grants to Indigenous charities.

Identiferoai:union.ndltd.org:uottawa.ca/oai:ruor.uottawa.ca:10393/43320
Date22 February 2022
CreatorsPlanatscher, Michela
ContributorsDevlin, Rose Anne
PublisherUniversité d'Ottawa / University of Ottawa
Source SetsUniversité d’Ottawa
LanguageEnglish
Detected LanguageEnglish
TypeThesis
Formatapplication/pdf

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