Charities are playing an increasing role in Canada’s economy and society, but they are facing a number of challenges that threaten their ability to fulfill their social objectives say economists at Toronto Dominion Bank.

In a new report entitled Canada’s Charities: Under Pressure, TD economists say charities need to be adequately and appropriately financed and must have sufficient and appropriately skilled staff and volunteers, but many are encountering difficulties on these fronts.

The report says there is a need for increased philanthropy. It notes that Canadian taxfilers claimed donations of 0.5%t of median income in 2002. However, as a percentage of aggregate income, monetary donations by Canadians are less than half that of Americans.

“If charities are to meet the growing demand for their services, they must have adequate and appropriate financing. They must also have sufficient and appropriately skilled staff and volunteers. Canadians can help charities to achieve these objectives by giving generously, either financially or with their time,” said Craig Alexander, associate vp and senior economist at TD Bank Financial Group, in a release.

“The more modest giving by Canadians is likely related to the disproportionately greater number of extremely wealthy Americans and their far greater accumulated financial assets. Nevertheless, Canadians have a crucial societal decision to make — either give more to charities or expect to receive fewer charitable services,” said Alexander.

The good news is that there is a real possibility for many Canadians to give more. TD Economics estimates that the baby boom generation is poised to inherit as much as $1 trillion. This wealth transfer is already underway and will peak in 2015, which could fuel a golden age of giving.