Estate Planning As A Part of Strategic Philanthropic Giving

Estate planning can be your unique selling proposition to encourage philanthropy. When you look at individuals who are significant donors to charities, many of them have already written wills and established financial plans. This type of planning allows them to support their favourite causes by following their strategic philanthropic plan.

Strategic philanthropy usually takes place between family members, financial advisors, tax and legal planners. Just as important as retirement planning, a philanthropic plan can be drafted in tandem with the development of an estate and financial plan to include charitable giving in the present and in the future.

Recently, Imagine Canada made recommendations in their Personal Philanthropy Project. The aim of the study was to look into philanthropy among affluent donors.  The key recommendations within the Imagine Canada report highlights four areas for action. I will address one of the recommended action items – the development of a giving calculator which enables individuals to understand the best ways to give. The other three action items have been applied by charities over the years to increase giving to major gift campaigns with consistent levels of donor engagement such as “predetermined giving tiers” and “peer influence”. Unfortunately, these actions bring success, usually occurring in larger organizations with well trained volunteers and senior staff helping to guide the process.  What happens in the small to medium sized charitable organizations, how can they compete? The great equalizer is education through illustration of different donation scenarios.

I classify the majority of charity donors as “transactional donors”.  The word “transactional” refers to charitable giving in the form or cash, check or credit card. This is typically in the comfort zone for most donors.

Meanwhile, a giving calculator can benefit the following groups: 1) the individual donor and their families; 2) the individual’s advisors (tax planner, financial advisor and legal advisor); 3) the charity and its leadership team because it can illustrate the best ways to give from assets that are highly taxable. To name a few, assets such as stocks, mutual funds, and registered investments are good vehicles that provide the donor with the maximum tax relief of assets with taxable capital gains. The integrated approach of estate planning, guided by the demonstrations in the giving calculator, will result in a larger philanthropic donation.

Check out our very own giving calculator, Giftabulator®, for the best ways to give by visiting www.giftabulator.com

– Bill

This entry was posted in Estate Planning. Bookmark the permalink.