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Create a strategic giving plan

Research shows that households within the high net worth (HNW) segment ($1 million plus in investible assets) are the most influential personal donors in Canada. If you’re looking for ways to maximize your giving power, we can help. We’ll work with you and your family to develop a strategic giving plan that intersects seamlessly into your overall wealth plan.

Here's a checklist to help you get started on finding your philanthropic mindset.

Before our meeting, review these points:

▢ Determine why you want to give.

Think about what inspires you to be charitable. Are you motivated by a formative experience? Is a current event, or situation providing the impetus for giving back?

▢ Identify your passions and values.

Passion is what drives people to give back. Whether you’re planning to give individually, or as a family, philanthropy is about expressing your values and finding the most meaningful way to make a lasting impact on your community.

▢ Research potential causes and conduct due diligence

Make sure the causes you are planning to support align with your values and the goals you’ve identified. You may even consider getting personally involved with a charity through volunteer work, for example, to understand how it operates and where the money goes.

▢ Choose if you want to give back as an individual or involve your family.

Including multiple generations in a developing a family philanthropic mission can help create a family legacy, instill a charitable mindset and give younger family members a voice.

▢ Consider what you want to learn from the act of giving.

Dedicate time for some in-depth learning about the causes you care about and monitor the impact you may have through your giving. If you’re giving as a family, this is a good opportunity to educate the next generation on researching causes and understanding tax and financial concepts related to charitable giving. It’s also an ideal opportunity to learn about how to co-operate and make decisions together.

When we meet, we’ll discuss these topics:

▢ Timing scenarios.

We’ll consider timing strategies (giving during your lifetime or through your estate) to ensure you benefit from tax efficiency while making a meaningful impact on the causes you care most about.

▢ Giving vehicles and strategies.

We can help you understand the differences in giving approaches and how they may impact you and your family’s finances. Options can include financial donations, making gifts of stocks, shares or life insurance policies during your lifetime, or incorporating giving into your estate plan through a gift in your will.

▢ Your legacy and estate plan.

Estate planning involves decisions around how you want to divide your estate among your loved ones and charitable causes that are most important to you. We’ll help you ensure your strategic giving plan incorporates your wishes for the future.

By the numbers

High income earners
In 2020, the 10% of donors earning at least $150,000 represented 40.5 of the total donation amount in Canada.¹

Canada’s generosity
In 2020, Canada ranked #8 on the top 10 list of the world’s most generous countries, along with Indonesia, Kenya and the United States.²

Older people give more
In 2020, about $9 out of every $20 came from donors aged 65 or older.³

Top causes
In 2022, medical causes were the top priority for charitable giving across all age groups in Canada.⁴

Hope for the future
Just over 82 per cent of Gen Z (18- to 24-year-olds) agree with the statement: 82.1 per cent agree that “I have a role to play in making change in the world.”⁵

Changing focus
Younger donors also favour causes working against racial inequality and supporting other marginalized groups more than older Canadians.⁶

Ways to give

▢ Donor Advised Fund (DAF)

A DAF is a fund that you set up with a registered charity that they administer for you. You can put your family name or other name to this fund. The fund is an account created through an initial donation of cash or securities by an individual or family.

You receive a tax receipt for your initial donation and subsequent donations to your DAF. Donations are invested and you make recommendations to your DAF administrator indicating which charities you’d like to receive grants from your fund.

▢ Private foundation

Family members can make up the group of donors that set up and control a private foundation. It is a legal structure that usually takes the form of a corporation or trust that must apply for charitable registration status.

As a registered charity, a private foundation is exempt from paying income tax, but it is required to disburse a certain minimum amount of its assets for charitable purposes. Donations made to the private foundation are eligible for charitable tax receipts to the donor.

▢ Life insurance policy

Using life insurance has the potential to turn your donation into an even larger donation. Options include:

Donating an existing policy on your life to a charity
Designating the charity as the beneficiary of a policy that you own
Taking out a new policy and donating to charity or keeping it and designating the charity as beneficiary

Usually, the recipient charity will want you to continue to pay the premiums on the policy and you would get a charitable tax receipt for the premiums paid. Review the tax benefits with your tax advisor.

▢ Estate donations

These are charitable gifts left in your will and through beneficiary designations, to named charities, that go into effect upon your death. Your estate receives a charitable tax receipt, and there may be some flexibility in when the associated tax credit can be applied to reduce income tax owing by you or your estate.

▢ Securities, including mutual funds

Gifts of securities listed on a prescribed public exchange, as well as bonds, mutual fund units and shares, can be a strategic way to give. That’s because capital gains tax does not apply to any accrued gains on the securities you donate, and you get a charitable tax receipt equal to the fair market value on the day ownership is transferred (typically the asset’s closing price).

▢ Endowment fund

Endowments may be an ideal gift to keep donors’ visions alive long after they have passed away and pay lasting tribute to their passions or beliefs. These provide ongoing support to charities in perpetuity. The capital remains untouched, while the income generated is used to finance ongoing programs and services. Naming privileges often recognize the donor or family associated with the endowment.