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<\/a><\/figure>\n\n\n\nSeason for giving makes the holidays a good time to discuss strategic philanthropic planning<\/h1>\nJOEL SCHLESINGER<\/span><\/strong><\/div>\nSPECIAL TO THE GLOBE AND MAIL<\/span><\/div>\n <\/div>\n <\/div>\n\n\n\n![\"\"](\"https:\/\/fundingmatters.com\/blog\/fmi\/wp-content\/uploads\/2021\/12\/article-Season-for-giving-makes-the-holidays-a-good-time-to-discuss-strategic-philanthropic-planning-0.jpg\")
<\/a>Advisors can assist clients in building sustainable, long-term strategies that may include a private foundation or donor-advised funds, which are being used increasingly.
DONALD_GRUENER\/ISTOCKPHOTO \/ GETTY IMAGES<\/figcaption><\/figure>\n\n\n\nPeople often have charitable giving on their minds during the holiday season, and advisors can play a role in determining the impact of those donations and ensuing tax credits on their clients\u2019 overall financial health. Yet, this time of year also presents an opportunity for advisors to discuss how clients\u2019 wealth could have a greater impact through long-term philanthropic strategies.<\/p>\n
\u201cCharitable giving typically involves being contacted by a charity and providing a gift by cheque, cash or credit,\u201d says Lydia Potocnik, vice-president, philanthropic advisory services at BMO Wealth Management in Toronto. \u201cBut strategic philanthropy is really about sitting down and assessing what clients\u2019 values are as individuals and as families so they can make a bigger, longer-lasting impact.\u201d<\/p>\n
It\u2019s likely a lot of clients are open to the discussion too given Canadians are generally, and perennially generous, she adds.<\/p>\n
Statistics Canada\u00a0data<\/a>\u00a0show an average of more than five million Canadians donate annually. For the most part, donations are small \u2013 although the amount increases with age as donors who are at least 65 years of age and older gave an average of more than $2,800 in 2019.<\/p>\nYet, it\u2019s likely many could and would do more with a little more help and insight. After all, Canadians are wealthier than ever. Statscan\u00a0figures<\/a>\u00a0show the nation\u2019s collective household wealth reached $14.2-trillion in the second quarter of this year, up more than 19 per cent from 2020. Canada\u2019s wealthiest people \u2013 about 20 per cent of all households \u2013 own more than two-thirds of that amount.<\/p>\nAdvisors have helped many families manage, grow and preserve a large portion of that wealth.<\/p>\n
Here lies an opportunity for them to help more Canadians create philanthropic legacies while assisting in determining assets to donate and how best to give them, says Michelle Connolly, senior vice-president of advanced wealth planning at Wellington-Altus Private Wealth Inc. in Toronto.<\/p>\n
\u201cIt really comes down to asking two questions,\u201d says Ms. Connolly, a trust and estate practitioner (TEP). \u201cHow do you want to live? And to whom do you want to give?\u201d<\/p>\n
After helping clients accumulate and understand they have enough assets to fund their retirements and even support loved ones financially \u2013 while alive and after they die \u2013 strategic giving should be the next conversation, she adds.<\/p>\n
Private foundations and DAFs<\/h4>\n
Advice involves not only helping clients maximize tax credits and overall tax efficiency associated with, for example, donating securities in-kind. Increasingly, advisors should be able to assist clients in building sustainable, long-term strategies that may include a private foundation or donor-advised funds (DAFs).<\/p>\n
Nicola Elkins, chief executive officer and founder of Benefaction Foundation in Montreal, private foundations are the gold standard of philanthropy, allowing families to set aside significant sums \u2013 generally several million dollars \u2013 to disperse over time to various causes.<\/p>\n
\u201cFor clients who want to involve their families more in philanthropy with them as board members of the foundation and have total control over investment decisions [among other considerations] \u2026 then a private foundation is the way to go,\u201d Ms. Elkins says.<\/p>\n
In contrast DAFs are offered, for example, through community foundations like the Winnipeg Foundation, financial institutions, or umbrella organizations like Benefaction Foundation. They\u2019re used more commonly than foundations because they provide many benefits of private foundations at a smaller scale, with reduced complexity and less responsibility for donors.<\/p>\n
\u201cIt\u2019s like having your own private foundation without the accompanying cost and administration,\u201d says Ms. Elkins, adding that DAFs can be set up for as little as $10,000 in some cases.<\/p>\n
Depending on the organization, assets in the DAF can remain under the advisor\u2019s control, often serving as an important link between clients and their families, says William Petruck, president and CEO of Funding Matters Inc.<\/a><\/strong> in Toronto.<\/p>\n\u201cIt becomes a smart way to involve children with philanthropic goals,\u201d while forging a broader relationship between the advisor and the next generation.<\/p>\n
Building that relationship is important considering these adult children are likely to inherit significant sums in coming years, he adds.<\/p>\n
A J.D. Power\u00a0survey<\/a>\u00a0released in May shows that almost $700-billion in assets in Canada will transfer from one generation to the next by 2026. That represents a challenge and opportunity for advisors. On one hand, advisors with aging clients stand to lose assets under management when those clients pass away, Mr. Petruck says.<\/p>\nOn the other hand, advisors, who bring clients\u2019 adult children into conversations about wealth and philanthropy are establishing a relationship that may lead to those younger family members becoming clients, too.<\/p>\n
How to bring up philanthropy with clients<\/h4>\n
In this respect, strategic giving discussions with families can be facilitated using a growing crop of sophisticated online tools. Among them is a web-based philanthropy calculator that Funding Matters offers called the \u201cGiftabulator,\u201d Mr. Petruck says.<\/p>\n
\u201cPeople are visual learners, and that\u2019s why we created this tool, so they can see the difference in impact between donating cash and different assets in the portfolio, and how strategies involving DAFs or a foundation can create a meaningful legacy,\u201d he says.<\/p>\n
\u201cIt\u2019s also a subtle way to bring up philanthropy,\u201d Mr. Petruck says. \u201cAdvisors can e-mail the link so clients can play around with it.\u201d<\/p>\n
Indeed, broaching the subject can feel awkward for advisors typically more at ease discussing retirement planning and portfolio allocation, Ms. Connolly says.<\/p>\n
\u201cBut once you\u2019ve had that experience a few times, it becomes a very comfortable discussion.\u201d<\/p>\n
Another issue involves knowledge of the mechanics of philanthropic strategies surrounding foundations and DAFs.<\/p>\n
Consequently, more advisors are seeking additional education, including a TEP designation, or a master of financial advisor in philanthropy that\u2019s offered in partnership by the Canadian Association of Gift Planners, the Knowledge Bureau Inc., and the Donor Motivation Program Canada, says Ms. Elkins, who has both designations.<\/p>\n
Advisors with a deeper knowledge of this space are often able to serve clients better, especially as their client roster ages alongside swelling investment portfolios, Ms. Potocnik says. Many clients themselves now recognize they have more than enough and want to give back.<\/p>\n
\u201cClients are wealthier and more financially sophisticated than ever before,\u201d she says. \u201cThey\u2019re reading about philanthropy in the news, and so they\u2019re often asking advisors more and more about it.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
I thought you might be interested in reading my interview in this week’s Globe and Mail. Joel Schlesinger’s article addresses charitable giving and the role advisors play on behalf of their clients and the charities they support. The FUNDING matters Giftabulator is profiled as a tax-efficient philanthropic giving app for charities, advisors and donors. Giftabulator … Continue reading As Seen in The Globe & Mail<\/span><\/a><\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-590","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/590","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=590"}],"version-history":[{"count":2,"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/590\/revisions"}],"predecessor-version":[{"id":594,"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/590\/revisions\/594"}],"wp:attachment":[{"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=590"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=590"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=590"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
<\/a>DONALD_GRUENER\/ISTOCKPHOTO \/ GETTY IMAGES<\/figcaption><\/figure>\n\n\n\n
People often have charitable giving on their minds during the holiday season, and advisors can play a role in determining the impact of those donations and ensuing tax credits on their clients\u2019 overall financial health. Yet, this time of year also presents an opportunity for advisors to discuss how clients\u2019 wealth could have a greater impact through long-term philanthropic strategies.<\/p>\n
\u201cCharitable giving typically involves being contacted by a charity and providing a gift by cheque, cash or credit,\u201d says Lydia Potocnik, vice-president, philanthropic advisory services at BMO Wealth Management in Toronto. \u201cBut strategic philanthropy is really about sitting down and assessing what clients\u2019 values are as individuals and as families so they can make a bigger, longer-lasting impact.\u201d<\/p>\n
It\u2019s likely a lot of clients are open to the discussion too given Canadians are generally, and perennially generous, she adds.<\/p>\n
Statistics Canada\u00a0data<\/a>\u00a0show an average of more than five million Canadians donate annually. For the most part, donations are small \u2013 although the amount increases with age as donors who are at least 65 years of age and older gave an average of more than $2,800 in 2019.<\/p>\n Yet, it\u2019s likely many could and would do more with a little more help and insight. After all, Canadians are wealthier than ever. Statscan\u00a0figures<\/a>\u00a0show the nation\u2019s collective household wealth reached $14.2-trillion in the second quarter of this year, up more than 19 per cent from 2020. Canada\u2019s wealthiest people \u2013 about 20 per cent of all households \u2013 own more than two-thirds of that amount.<\/p>\n Advisors have helped many families manage, grow and preserve a large portion of that wealth.<\/p>\n Here lies an opportunity for them to help more Canadians create philanthropic legacies while assisting in determining assets to donate and how best to give them, says Michelle Connolly, senior vice-president of advanced wealth planning at Wellington-Altus Private Wealth Inc. in Toronto.<\/p>\n \u201cIt really comes down to asking two questions,\u201d says Ms. Connolly, a trust and estate practitioner (TEP). \u201cHow do you want to live? And to whom do you want to give?\u201d<\/p>\n After helping clients accumulate and understand they have enough assets to fund their retirements and even support loved ones financially \u2013 while alive and after they die \u2013 strategic giving should be the next conversation, she adds.<\/p>\n Advice involves not only helping clients maximize tax credits and overall tax efficiency associated with, for example, donating securities in-kind. Increasingly, advisors should be able to assist clients in building sustainable, long-term strategies that may include a private foundation or donor-advised funds (DAFs).<\/p>\n Nicola Elkins, chief executive officer and founder of Benefaction Foundation in Montreal, private foundations are the gold standard of philanthropy, allowing families to set aside significant sums \u2013 generally several million dollars \u2013 to disperse over time to various causes.<\/p>\n \u201cFor clients who want to involve their families more in philanthropy with them as board members of the foundation and have total control over investment decisions [among other considerations] \u2026 then a private foundation is the way to go,\u201d Ms. Elkins says.<\/p>\n In contrast DAFs are offered, for example, through community foundations like the Winnipeg Foundation, financial institutions, or umbrella organizations like Benefaction Foundation. They\u2019re used more commonly than foundations because they provide many benefits of private foundations at a smaller scale, with reduced complexity and less responsibility for donors.<\/p>\n \u201cIt\u2019s like having your own private foundation without the accompanying cost and administration,\u201d says Ms. Elkins, adding that DAFs can be set up for as little as $10,000 in some cases.<\/p>\n Depending on the organization, assets in the DAF can remain under the advisor\u2019s control, often serving as an important link between clients and their families, says William Petruck, president and CEO of Funding Matters Inc.<\/a><\/strong> in Toronto.<\/p>\n \u201cIt becomes a smart way to involve children with philanthropic goals,\u201d while forging a broader relationship between the advisor and the next generation.<\/p>\n Building that relationship is important considering these adult children are likely to inherit significant sums in coming years, he adds.<\/p>\n A J.D. Power\u00a0survey<\/a>\u00a0released in May shows that almost $700-billion in assets in Canada will transfer from one generation to the next by 2026. That represents a challenge and opportunity for advisors. On one hand, advisors with aging clients stand to lose assets under management when those clients pass away, Mr. Petruck says.<\/p>\n On the other hand, advisors, who bring clients\u2019 adult children into conversations about wealth and philanthropy are establishing a relationship that may lead to those younger family members becoming clients, too.<\/p>\n In this respect, strategic giving discussions with families can be facilitated using a growing crop of sophisticated online tools. Among them is a web-based philanthropy calculator that Funding Matters offers called the \u201cGiftabulator,\u201d Mr. Petruck says.<\/p>\n \u201cPeople are visual learners, and that\u2019s why we created this tool, so they can see the difference in impact between donating cash and different assets in the portfolio, and how strategies involving DAFs or a foundation can create a meaningful legacy,\u201d he says.<\/p>\n \u201cIt\u2019s also a subtle way to bring up philanthropy,\u201d Mr. Petruck says. \u201cAdvisors can e-mail the link so clients can play around with it.\u201d<\/p>\n Indeed, broaching the subject can feel awkward for advisors typically more at ease discussing retirement planning and portfolio allocation, Ms. Connolly says.<\/p>\n \u201cBut once you\u2019ve had that experience a few times, it becomes a very comfortable discussion.\u201d<\/p>\n Another issue involves knowledge of the mechanics of philanthropic strategies surrounding foundations and DAFs.<\/p>\n Consequently, more advisors are seeking additional education, including a TEP designation, or a master of financial advisor in philanthropy that\u2019s offered in partnership by the Canadian Association of Gift Planners, the Knowledge Bureau Inc., and the Donor Motivation Program Canada, says Ms. Elkins, who has both designations.<\/p>\n Advisors with a deeper knowledge of this space are often able to serve clients better, especially as their client roster ages alongside swelling investment portfolios, Ms. Potocnik says. Many clients themselves now recognize they have more than enough and want to give back.<\/p>\n \u201cClients are wealthier and more financially sophisticated than ever before,\u201d she says. \u201cThey\u2019re reading about philanthropy in the news, and so they\u2019re often asking advisors more and more about it.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" I thought you might be interested in reading my interview in this week’s Globe and Mail. Joel Schlesinger’s article addresses charitable giving and the role advisors play on behalf of their clients and the charities they support. The FUNDING matters Giftabulator is profiled as a tax-efficient philanthropic giving app for charities, advisors and donors. Giftabulator … Continue reading As Seen in The Globe & Mail<\/span><\/a><\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-590","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/590","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=590"}],"version-history":[{"count":2,"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/590\/revisions"}],"predecessor-version":[{"id":594,"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/590\/revisions\/594"}],"wp:attachment":[{"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=590"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=590"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundingmatters.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=590"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Private foundations and DAFs<\/h4>\n
How to bring up philanthropy with clients<\/h4>\n