Government Funding of Registered Charities in Canada

Abstract

Though registered charities in Canada play a key role in the provision of public services, little is known about the factors that influence their receiving funding from government sources. To the best of my knowledge I am the first to examine empirically government funding of registered charities in Canada by looking at the impact of three main determinants on government funding. These are charity size, category and location. The effects of these determinants are examined using probit and Tobit methodologies on data from the Canada Revenue Agency’s (CRA) Registered Charity Information Returns (Form T3010) filed by 78,772 registered charities for the period 2004 to 2013. Using two measures of government funding the results indicate that the type of charity counts with charities focused on the provision of social services being more likely to be funded by government. Size also matters, charities with larger revenues are more likely to receive government funding compared to those with smaller revenues. Finally, location plays a role to the extent that charities in urban areas are more likely to receive funding from the government than their rural counterparts.