Ottawa

United Way blames Phoenix anxiety for drop in donations

Anxiety over the troubled Phoenix payroll system may be to blame for thousands of public servants opting out of automatic donations to the United Way, the charity says.

Federal public servants opting out of automatic payroll deductions, charity says

Public servants hold a demonstration in Ottawa to draw attention to the problems they've encountered under the Phoenix pay system. (Justin Tang/Canadian Press)

Anxiety over the troubled Phoenix payroll system may be to blame for thousands of public servants opting out of automatic donations to the United Way, the charity says.

Since the introduction of the Phoenix system in 2016, thousands of federal public servants have been improperly paid, and many fear any aberration in their salary, such as taking leave or accepting a temporary promotion, will result in pay problems.

What was affected is the mindset of public servants, their apprehension about doing anything around their pay that might affect their pay.- Michael Allen, United Way Ottawa

It appears that anxiety extends to automatic payroll deductions for charitable donations, too, according to the president and CEO of United Way Ottawa.

"We saw in the first year of the challenge with their payroll system a decline of 8,000 donors," Michael Allen said. "Since that challenge we've seen close to 12,000 donors lost."

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Donations dropping

According to the Government of Canada Workplace Charitable Campaign (GCWCC), donations from the National Capital Region fell by nearly $3 million the year Phoenix was introduced, from $18.9 million in 2015 to $16.2 million in 2016.

Contributions fell to $16.1 million in 2017, and remained static the following year.

Contributions to the United Way by federal public servants dropped by nearly $1 million over that same period, from $5.35 million in 2015 to $4.46 million in 2016.

For years, automatic payroll deduction has been a mainstay of the United Way's fundraising campaign in the capital. Public servants were encouraged to "set it and forget it," a supposedly worry-free method of skimming a few dollars off each paycheque for a good cause.

Michael Allen is president and CEO of United Way Ottawa. (CBC News)

Public servants wary

Although there is no direct link between the payroll deductions and Phoenix, Allen said public servants appear increasingly wary of signing up.

"What was affected is the mindset of public servants, their apprehension about doing anything around their pay that might affect their pay," Allen said.

"PSAC members have a long history of giving to the annual United Way campaign through automatic payroll deductions, but given these Phoenix-related fears, it's understandable that there has been a drop in participati0on," PSAC president Chris Aylward said in a statement to CBC.

Other explanations

Eileen Dooley, CEO of HealthPartners, an umbrella organization representing 16 national charities, said there may be other factors behind the decline in donations. 

Dooley said automatic payroll deductions from PSAC members have been on the decline since before Phoenix, likely due to job uncertainty and a changing demographics in the workplace.

The boomers that are starting to retire from workplaces are not being replaced by donors who are giving the same amount, or in the same way.- Eileen Dooley, HealthPartners

"Older donors tend to be more philanthropic," Dooley said. "The boomers that are starting to retire from workplaces are not being replaced by donors who are giving the same amount, or in the same way."

Dooley said millennials entering the workforce are often burdened with student debt and prefer volunteering or donating online.

"They're more interested in crowdfunding, in peer-to-peer support," Dooley said.

Nor does the GCWCC believe the downward trend in donations can be attributed solely to the ongoing Phoenix pay problems.

Rather, like Dooley, the organization blames changing demographics, shifting behaviours and new technology.

The GCWCC notes that while fewer individuals are donating, the average size of their donations is growing.

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