The best charities to donate to for impact in Canada for 2023

Charity Intelligence top 10 impact charities in Canada for 2023

Ever wonder whether a charity you donate to is really making a difference? If you want to boost the impact of your charitable donations, check out our rankings of best charities for impact. We have four lists for you:

1. Top 10 Impact Charities Overall
2. Top 10 Canadian Impact Charities
3. Top 10 International Impact Charities
4. Top 10 Impact Canadian Food Banks

Top 10 Impact Charities Overall

Top 10 Canadian Impact Charities

Top 10 International Impact Charities

Top 10 Impact Canadian Food Banks

Return to top of page

What impact means for charities—and for your donations

“Some charities create a lot of change with the donations given to them. Others have almost nothing to show for the money coming from donors,” says Greg Thomson, director of research at Ci, itself a charity that helps Canadians make informed giving decisions. 

Some charities can take a $100 donation and turn it into nearly $700 worth of value for the people it supports and society at large. For example, a charity that helps at-risk teens could provide a sizable financial benefit to the youth who use its programs (in the form of food, housing, wellness, etc.), as well as to the greater community through cost savings to the public health-care and shelter systems. 

On the other end of the spectrum, there are charities with less value for impact, perhaps producing just $40 worth of measurable change from the same $100 donation because they spend too much relative to the benefit they create. For example, charities that grant wishes to critically ill children often spend upwards of $25,000 fulfilling each wish, but the value provided to the child and their family is much lower, says Thomson. 

“Wish charities are wonderful-feeling things that people love to give to, but [wish granting is] really expensive,” he says. “One child receives a bedroom makeover, a trip to Disney World or some other thing that makes them feel really good for a while—and may even improve their physical health a little bit. But when we do the value creation [analysis] for that one child, we struggle to even get $10,000 out of that $25,000.” And that includes what the family would have spent if they had paid for a trip or renovation themselves, he adds.

Return to top of page

What the impact rating of a charity means

You can find out which charities provide the greatest impact for your donation dollar. Ci is here to help. It has released top impact lists for seven years now (starting in 2017). And for the past six years, it’s done a deep dive into Canadian charities to come up with an “impact rating”—a financial measurement of their on-the-ground work. 

Ci uses publicly available information—including financial statements, annual reports and websites—to rate charities in four areas: results reporting, financial transparency, need for funding, and “cents to the cause” (how much of each donated dollar goes to a charity’s programs after paying for administration, management and fundraising costs). 

In 2018, Ci started adding impact scores to some of its charity reports, and it currently includes this metric for about 260 of the 850 Canadian charities it researches. That number is lower than it was last year, when it included impact scores in 300 charities’ ratings. The reason? Ci has paused its impact ratings for 40 charities because it wants to improve its research on them, explains Thomson. 

Refining the research is something Ci does regularly. For instance, in 2022, it conducted more extensive research into different types of charitable programs. One area it focused on was the impact of food banks, and that additional research yielded more food banks placing on that year’s Top 10 Impact Charities lists. Thomson says Ci “looked more holistically at the research to say, ‘What happens when people have more food? What does it impact?’” What it found is that having enough food to eat improves people’s health and well-being and even has a positive effect on their income. And, ultimately, the benefit to society includes reduced health care and welfare costs, and even means a bit more revenue for the government because people are paying more income tax. It’s not just about feeding people. “It actually has ripple effects both for the individual and for society at large,” explains Thomson. (For a full explanation of how Ci evaluates the impact from Canadian charities’ impact, read the Methodology.)

In 2023, Ci removed from consideration any charity that isn’t transparent about its finances. “We decided to implement one additional rule this year—that no charities on our top impact lists can be rated as zero in financial transparency, meaning that we had to go to the Canada Revenue Agency (CRA) to obtain their financial statements as they are not available on the charity’s website and they would not send them to us,” Thomson says.

Return to top of page

Why charitable impact matters 

Thomson feels the impact ratings Ci gives charities are reliable for donors. For example, Habitat for Humanity has a low impact rating because of the social return on a donation to the charity. “It has data showing that its programs are effective,” says Thomson, “but, since it is a very costly program per client, the Habitat charities all score ‘low’ or ‘fair’ on demonstrated impact.” The cost on average is over $200,000 per family housed, and sometimes much higher, he explains. Thomson says that Ci has data that shows that Habitat for Humanity changes people’s lives—and he wishes more charities had data for that. “But it’s one of the most expensive charitable programs we’ve seen anywhere.” 

Ci has rated seven Habitat for Humanity charities for impact, and its best estimate is that they create $1 to $2 per $1 donated. Five of them are rated “low” for demonstrated impact, and two are rated “fair,” says Thomson. Overall, Habitat for Humanity Canada rates “fair” with a best-estimate social return on investment (SROI) of three to one; however, this is partly due to the impact of its international operations. “If we look just at its programs within Canada, building houses for Canadian families, our best estimate is that it creates $1.40 per $1 donated,” says Thomson. “Impact values do not change significantly from year to year, typically, and Habitat has not changed its model enough to make much of a change since we first analyzed them five or six years ago.” He notes, however, that some Habitat charities have launched home buy-back programs (for families ready to move on to other housing) and started building multi-family dwellings. “Both of these strategies should help them lower the cost per family helped and thus likely improve the overall social return on investment of the Habitat charities,” says Thomson. “But so far, this is still a very small portion of the homes overall for the Habitat charities.”

Compare that with Against Malaria Foundation Canada—an arm of the U.K.-based Against Malaria Foundation—which is one of Ci’s Top 10 Impact Charities for 2023. It has a “high” impact rating. “Our best estimate is that the Against Malaria Foundation creates $17 from every $1 donated,” says Thomson. Though he does note that its overall rating would be lower if impact weren’t included, since according to Ci’s research, the foundation has an X score for financial transparency—Ci’s second-lowest rating in that category—because its financial statements are only available upon request. 

Return to top of page

Do charity salaries and overhead costs matter? 

A persistent question among donors is how much money a charity spends on overhead, notes Thomson. At face value, this question might make sense. It seems logical that if a charity is spending a large amount of money on administrative and fundraising expenses—the two elements of overhead costs—it would have less money available to devote to programs and would therefore have a lower impact. But that doesn’t tell the whole story, he explains. 

“The overhead cost really isn’t the question to ask, so that’s why we’re making overhead costs less and less of our overall five-star rating,” says Thomson. “The question to ask is how much change the organization’s making with every dollar that it has.”

However, that doesn’t mean donors should ignore overhead expenses. Ci looks at whether they’re too high—or too low. In fact, it dings charities that spend too little on administrative costs.

“You can’t run a charity without administrative costs,” Thomson explains. “So our ratings penalize charities a tiny bit if they have too-low administrative costs, because if you’re spending 1% of what you spend on administration, you probably don’t have the systems in place to be running effectively.”

Fundraising is another key thing to think about, because spending a lot on it could also mean less money for programs. But again, it’s not the main thing to look at, says Thomson.

“If a charity is spending 40 cents to raise every dollar, it will be tough to make that up on the impact side,” he says. “In theory, the lower the fundraising costs, the better.” 

But, he notes, very few charities see their impact reduced by fundraising costs. The ones that do typically have very expensive fundraising events and/or fundraising methods.

How much a charity spends on salaries—which fall into three buckets: administrative, programs and fundraising—is also something many donors are curious about, Thomson says. But again, this expense isn’t going to give you the full picture in terms of a charity’s impact. 

“Many charities spend over 50% of their costs on salaries because those people are needed to run the programs and manage everything that goes on at the charity,” Thomson says. “The fact that salaries are high, in terms of percentage of what they spend, means absolutely nothing. In some cases, that’s a great thing, if it’s a very people-oriented program that they’re putting on.”

Return to top of page

Why Canadians donate to charities

The motivations for giving to charities are wide-ranging. Many people give for personal reasons. Maybe they want to support a university they went to, or a hospital that helped a family member, says Thomson. He also notes that one of the biggest reasons people give is because they were asked, either by a friend or the charity itself. Also, it feels really good to give, he says.

Another reason to donate? Giving to make a difference, and that’s where Ci’s top impact lists can come in handy, says Thomson. “We’re not saying people should only give to these top impact charities. We’re saying, people have many reasons to give, and it’s that portion of your giving where you want to really make a difference, whether it’s 10% or 80%, where our lists are most helpful.” 

You can also use the lists to find charities with big impact that help with a cause you’re passionate about. After you’ve narrowed down the cause you want to donate to, take a look at Ci’s 2023 Top 10 Impact Charities, which deliver average returns of $6 for every $1 donated, compared with the overall average return of $1.50. You can also look up your favourite charities by name (or search by sector) on charityintelligence.ca to see if they have been assessed for impact and, if so, what the impact rating is: low, fair, average, good or high. Obviously, a better-than-average rating is what you’re after. 

Return to top of page

Methodology 

Ci assigns impact ratings of “low,” “fair,” “average,” “good” and “high” to about one-third of the charities it assesses. That is just one of five metrics Ci uses to rate charities. The other four are results reporting, financial transparency, need for funding, and “cents to the cause.” The impact rating currently accounts for 20% of a charity’s overall star rating. Ci plans to increase that weighting to 40% in the near future to reflect the significance of impact to donors. Ci uses two metrics to calculate a charity’s impact rating: a demonstrated impact score and a data quality score, as explained below.

Demonstrated impact score

This score measures social return on investment (SROI), or the amount of social good that charities generate per $1 donated. SROI is expressed as a ratio—say, $5 of returns for every $1 donated, as follows:

SROI = Total monetary value of a charity’s outcomes ÷ Charity’s annual spending

Annual spending is straightforward and easy to find, since it usually appears in a charity’s annual report and financial statements. 

How does Ci come up with a value for the outcomes of a charity’s work? 

The data researchers first look at publicly available information and reach out to each charity: What outcomes did you achieve this year? For an organization that supports unhoused youth, for example, Ci would ask about the benefits youth received from the charity. Was it simply a place for them to sleep? Or did they also get a meal in the morning, plus counselling or referrals for support or care?

Ci then uses external research to assign a monetary value to those outcomes, both for the benefits to the charity’s clients as well as to society. In this case, it would add the intrinsic value of the housing, food, counselling and referrals (if applicable), as well as averted risk of death in the value column for the client. It would also incorporate reduced costs to public health care, shelters, food banks, etc., in the value column for society. 

To provide a realistic picture, Ci calculates a range of SROI values—a lower bound, a best estimate and an upper bound. The lower bound is based exclusively on evidence from the charity. The best estimate is based on charity data and external research. And the upper bound includes additional value that “the charity could reasonably be producing but that is not yet appropriately backed by evidence.” The rating combines the three values to get a demonstrated final impact score, but the lower bound and best estimates are weighted more heavily because they are evidence-based and can prove actual impact.

Data quality score

This score measures the quantity and quality of impact-related information a charity gives to Ci. Analysts assess the data provided for each program a charity runs—such as number of clients, outcomes, duration of client engagement, spending breakdown, etc. Those results are then weighted according to the spending breakdown—in other words, the data provided for the programs that get the biggest outlay of funds count most—to come up with an overall data quality score, expressed as a percentage. 

Impact rating

The demonstrated impact score and data quality score are then plotted on a graph to provide a total impact rating of low, fair, average, good or high, as follows:

Return to list of charities

Read more on donations:

• Financial gifts: What you need to know before giving money or investments
• Strategies for smarter charitable giving
• What are the tax benefits of donating to charity?

About Alex Mlynek

Alex Mlynek is a writer and editor with more than 20 years’ experience. She's written for such magazines as Report on Business and Reader's Digest. Her first job out of journalism school was at MoneySense.

Linkedin