The best charities in Canada to donate to for the most charitable impact 2022

Tap to read more:

• Charity Intelligence top 10 impact charities in Canada for 2022
• What impact means for charities—and for your donations
• Why charitable impact matters
• Overhead vs. Impact
• What donors should look for
• Methodology for the impact rating of charities

Charity Intelligence top 10 impact charities in Canada for 2022

Ever wonder how a charity uses the money you donate? Is it mostly on marketing, or is it going directly to those in need? 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 Charity Intelligence (Ci), a charity that helps Canadians make informed giving decisions. 

Indeed, there are charities that 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 that destroy value, perhaps producing just $40 worth of measurable change from the same $100-donation because of spending too much in relation to the benefit they create. For example, charities that grant wishes to critically ill children often spend upwards of $25,000 per child, 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 they are 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 for that one child, we struggle to even get $10,000, out of that $25,000.” And that includes the cost savings to the family if they had taken on the expense of a trip or renovation themselves, he adds.

Return to top of page

The impact rating

How can you find out which charities provide the greatest impact for your donation dollar? That’s where Ci comes in. Ci has released top impact lists now for six years (starting in 2017). And for the past five years (starting in 2018), it’s done a deep dive into Canadian charities to come up with an “impact rating”—a financial measurement of the on-the-ground work each one does. 

Ci was already using 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 on some of its charity reports, and currently includes this metric in about 300 of the 800-plus Canadian charities it researches. And while it had plans to increase that number, it currently remains the same, as rather than spending their time expanding the amount of charities with an impact rating, in 2022 Ci chose to invest in refining its understanding of the change created by different charitable programs. Thomson notes that more food banks included for the Top 10 Impact Charities lists is due to additional research into food banks. “​​We looked more holistically at the research to say, what happens when people have more food? What does it impact?” What they found is that having enough food to eat improves people’s health and well-being and even their income. And 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. “People may think that a food bank just gets people fed. Well, it actually has ripple effects both for the individual and for society at large,” explains Thomson. (For a full explanation of how Ci evaluates a charity’s impact, read Methodology.)

Return to top of page

Why charitable impact matters 

“We realized that until we got ‘impact’ in there, we had a problem with our ratings,” says Thomson, noting that some of Ci’s top-ranked charities under its old rating system haven’t been able to answer simple questions about the specific outcomes of their programs. “With ‘impact’ in there, we believe (our ratings) are far more reliable for donors.”

Habitat for Humanity is one charity that gets dinged by Ci because of its impact rating, not because it isn’t able to answer questions about its impact, but because of the social return on a donation to the charity. “Habitat for Humanity is ​​probably the charity that frustrates me the most,” says Thomson. “It has data showing that its programs are effective, but, since it is a very costly program per client, the Habitat charities all score ‘low’ or ‘fair’ on demonstrated impact.” Habitat for Humanity charities are rated as “low” or “fair” impact because they cost, on average over  $200,000 per family housed, and sometimes much more, he explains. “​​They’ve got data that shows that they change these people’s lives—and we wish more charities had data showing that—but it’s one of the most expensive charitable programs we’ve seen anywhere.” Of the seven Habitat for Humanity charities Ci has rated for impact, its best estimate is that they range from creating between $1 and $2 per dollar donated. “Five of them are rated low for demonstrated impact and two are rated fair. If we look at the national charity, Habitat for Humanity Canada (the national charity), overall it rates fair with a best-estimate social return on investment (SROI) of three to one; however, this is brought up significantly by 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.” 

Compare that with Against Malaria Foundation Canada—an arm of the U.K.-based Against Malaria Foundation—which is one of Ci’s 2022 Top 10 Impact Charities, and has a high impact rating. “Our best estimate is that Against Malaria Foundation creates $17 from every dollar donated,” says Thomson. Though he does note that its overall rating would be three stars instead of four stars if impact wasn’t included since according to Ci’s research, they have an X score for financial transparency—Ci’s second lowest rating in that category—because their financial statements are only available upon request. “​​They frustrate us, and I’m sure they frustrate some donors that want to understand them better, but at the end of the day, the bed nets that they provide are saving lives so cost-effectively, and that’s what matters in the end,” he explains.

Return to top of page

Overhead vs. impact

Historically, financially conscious donors have gravitated toward large established charities and focused on factors like overhead costs and salaries, thinking if those expenses were high then the charity wasn’t doing good work with the money it received. But those measures can be misleading, says Thomson. “We’ve found almost no correlation between impact and things like overhead and reputation,” he says.

Having said that, charities still need to be upfront about this information because extremely high or low overhead costs are a red flag that can point to impact issues. “If you spend $0.80 of every $1 on overhead, it’s going to be really hard to have a high impact on that remaining $0.20,” says Thomson. 

On the other hand, spending too little on overhead can be worrisome, too. For example, if a charity devotes just 5% of its budget to fundraising and administration, it’s either not investing enough in its staff, or it’s using creative accounting methods. “More likely they’re playing the game and saying, ‘Our accountants say we spend only $0.05 on $1,’” says Thomson. “But if you dig in and see where all the money is actually being spent, we would probably categorize it differently.”

Return to top of page

What Canadians should look for when they donate 

If you want to find a charity that’s going to make a difference, start by thinking about what matters to you, suggests Thomson. “​​There are so many different reasons that people give.” he says. “And we’re not trying to get everybody to switch to becoming an impact donor, but no matter what cause you’re thinking of giving to, you can find charities that are doing a better job than others at changing lives.”

After you’ve narrowed down the cause you want to donate to, take a look at Ci’s 2022 Top 10 Impact Charities, which deliver average returns of almost $7 for every $1 donated, compared with overall average returns at $1 to $2. You can also look up your favourite charities by name (or search by sector) on Ci’s website to see if they have been assessed for impact and, if so, what the impact rating is, including low, fair, average, good or high). Obviously, a better-than-average rating is what you’re after. 

If an organization you want to support is not currently among those that Ci rates for impact, look for specific, clear and easy-to-find information about what your charity of choice does, what its own expected outcomes are, and how it met those expectations last year, says Thomson.

“I specifically say last year because there are examples all over the place where charities say, ‘Since we started, we’ve helped 200,000 kids.’ You may have no idea whether the charity started five years ago or 50 years ago, so you don’t know what that number means,” he says. “I get very wary of a charity that presents very old data or presents very aggregated and non-specific data.” 

While he doesn’t expect charities to provide donors with a dollar value for the change they create—that’s where third-party organizations like Ci come in—Thomson does think it’s important for charities to collect and provide data as to what they accomplish so they can measure their own effectiveness and make it easier for donors to see where their money is going. 

That means you should be able to spend five minutes on a charity’s website or read its annual report, and understand what its main programs are. And, ideally, you should know how much it spent on each program in the previous year. You should also be able to quickly identify what the charity’s expected outcomes were and what it accomplished during that period. An education charity, for example, might cite a specific percentage increase in graduation rates over the previous year—and it should be clear whether that’s for high school or university—to help you evaluate what kind of change they’ve made. 

If a charity doesn’t offer that level of accountability and transparency, it may be best to keep looking to find one that does. 

Return to top of page

Methodology for the impact rating of charities

Ci assigns an impact rating of low, fair, average, good or high to about one-third of the charities it assesses. Because this 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 only 20% of a charity’s overall star rating. That weighting will eventually go up to 40% to reflect the significance of impact to donors. “We believe impact is the most important factor,” says Thomson, director of research at Ci. But as of 2022 there’s a new overarching set of rules Ci applies when they assign a final star rating.

• If a charity has low impact, it cannot score higher than 2 stars
• If a charity has fair impact, it cannot score higher than 3 stars
• If a charity has good impact and is rated 0 to 3 stars, it goes up by 1 star
• If a charity has high impact and is rated 0 to 4 stars, it goes up by 1 star

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 an easy figure to come by, since it typically appears in a charity’s annual report and financial statements. But how does Ci come up with a value for the outcomes of a charity’s work? 

Researchers first look at publicly available data and ask each charity: What outcomes did you achieve this year? For an organization that supports unhoused youth, for example, they would ask about the benefits youth received from the charity. Was it simply a place for them to sleep? Did they get a meal in the morning, counselling or referrals for help?

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 (where applicable), as well as averted risk of death in the value column for the client. And then would 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 together 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?