TORONTO, Nov 20 (Reuters) - Canada's charities, facing falling donations and rising demand from the poor due to the economic crisis, are asking cash-strapped Ottawa to look elsewhere for ways to balance the government budget.

The nation's charity lobby group, Imagine Canada, said Thursday it has drafted a letter to Prime Minister Stephen Harper ahead of next week's economic statement asking the government not to slash charitable funding.

"We urge the Government of Canada to maintain existing levels of funding to Canada's charities and nonprofits through its grants and contributions programs," Imagine Canada said in the letter. "Now is not the time to reduce support to communities through federal funding cuts."

Imagine Canada said it was also seeking additional tax benefits for charities.

A steep downturn in the autos and resource industries along with a deepening credit crunch have darkened the outlook for Canada's economy and raised the prospect of a government deficit for the first time in more than a decade.

Canada's finance minister said earlier this month Ottawa was considering selling some national assets, including Toronto's iconic CN Tower, to help balance the books.

The economic slowdown, meanwhile, has cut into charitable giving in the United States and Canada even as demand for aid rises, with Canada's food banks recently reporting a 25 percent slump in donations from major corporations.

Imagine Canada said it planned to send the letter Friday in the hopes it could influence Ottawa's budget planning. (Reporting by Richard Valdmanis; editing by Peter Galloway)

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