Three trends that will influence philanthropy in 2022

Philanthropy in Canada and around the globe has never been more dynamic, complex or needed. As the year draws to a close, here are some influential trends that will inform the philanthropic landscape in 2022 and beyond.

Big giving by families

Generous families will grow in philanthropic prominence and influence. According to the Family Enterprise Exchange, family-owned businesses in Canada account for 60 per cent of the country’s GDP. Of these businesses, close to 25 per cent will be sold in the next five years, resulting in a great deal of money in motion and tremendous opportunity for philanthropy. Canada is also seeing some extraordinary success by entrepreneurs who will be eager to make a philanthropic impact.

Shopify’s Tobias Lutke and Fiona McKean established the Ottawa-based Thistledown Foundation in early 2020. With the arrival of the pandemic they quickly shifted from their intended focus on decarbonization to COVID-19 response, highlighted by their recent gift of $26 million to Canada’s 13 children’s hospitals to “address the immense impact of the pandemic on children, youth and their families.”

Tackling inequality has ignited calls for generous people and families to give differently, in ways that are less restrictive and more inclusive and collaborative.

Business and investment-owning families are increasingly aware of the valuable role philanthropy can play in the community, but also within their families – anchoring values, aiding in the moral and leadership development of children, and finding shared purpose across generations and branches.

Families are looking to be more intentional in their giving, engaging independent philanthropic counsel or accessing the myriad philanthropy offerings that are proliferating in financial and professional advisory firms, increasingly viewed as core to business and client retention.

Charities, too, are taking note, growing their ability to engage donor families (as opposed to individuals) and developing relationships with younger family members to support their transition into philanthropic leadership and to hedge against losing future support due to generational change.

From charitable giving to charitable living

Philanthropists are aligning their values and priorities to a broader view of how they can contribute and make a difference.

For Generation X and Millennial donors in particular, this may include traditional philanthropy but also integrate social finance initiatives and responsible investing of assets, social enterprise platforms, ethical consumerism, volunteerism and activism. For business-owning families, it might extend to their environmental, social and corporate governance (ESG) and diversity, equity and inclusion (DEI) commitments and practices. With 40 per cent of business family next-gens moving into positions of control over the next few years, this shift from charitable giving to charitable living will likely grow.

The portfolio approach to “doing good” is resulting in an increasingly varied landscape of structures (and related governance) to support donor objectives, within Canada or across multiple jurisdictions for those with interests abroad. For many it is a private foundation, or a donor advised fund, or combination of both for distinct purposes. Already, as the number of registered foundations in Canada has continued to increase, donor advised funds in Canada have grown from $4.4 billion in 2014 to a projected $6.5 billion in 2024. Non-profit initiatives and platforms that facilitate giving outside Canada add yet other dimensions.

Jo-Anne Ryan, vice president, philanthropic advisory services, at TD Wealth and executive director of the Private Giving Foundation is increasingly seeing how life experiences shape one’s approaches to giving. One client couple moved from Ontario to the Rockies in Alberta and established a donor advised fund with TD’s Private Giving Foundation. The fund allows them to support projects in their new community such as financial support to young artists enrolled at the Banff Centre.

The couple also owns a home in Bequia, a Caribbean island that forms part of St. Vincent and the Grenadines. While Bequia is known for yachting and beautiful beaches, its residents face serious challenges resulting from a lack of basic social infrastructure. The couple established a private foundation to fund projects there such as education for students with special needs, scholarships, food security programs and, more recently, COVID-19 vaccines. In addition to their volunteerism, having a donor advised fund and a foundation allows them to live charitably.

Focus on inequality

New and established philanthropists are responding with greater purpose and urgency on the issue of inequality and the unequal impacts of climate change.

There is widespread acknowledgement that large societal gaps based on race, gender, disability and economic status – as have been laid bare during the pandemic – are not good for any of us socially, economically or environmentally. Gen-X, Millennial, and Gen-Y donors are especially concerned about these issues. At the same time, donor communities are becoming even more diverse as women, people of colour and new immigrants to Canada advance as wealth creators and holders. This will continue to have a profound impact on how philanthropy is practiced and understood in Canada.

For example, in my work with a multi-racial and multi-faith family making large charitable investments, conversations with their charitable partners are anchored in their values, exploring how their gifts can be used to advance diversity and inclusion across the organization and in its fundraising strategy.

Tackling inequality has ignited calls for generous people and families to give differently, in ways that are less restrictive and more inclusive and collaborative. In response, the Collective of Quebec Foundations Against Inequality (including some of Canada’s largest foundations) recently launched a framework offering principles to guide donors to assess their “inequality footprint” to have greater impact through their work.

In the community sector, donors using the lens of inequality as they make giving decisions is a welcome and long overdue shift. In 2018, just 1 per cent of charities in Canada (representing many of the largest in the country) received 60 per cent of all charitable donations. Yet community-based organizations that are led by or primarily serve women or Black, brown and/or Indigenous peoples get the lowest levels of giving, and as a result they are chronically underfunded. And these organizations tend to be the very ones on the ground addressing inequality through direct services or advocacy. More donor support to these kinds of organizations is necessary, especially at this time when 56 per cent of charities in Canada are struggling and their COVID recovery is at risk.

As a country and as people, we are better when we give, share and care about each other and the environment. Philanthropy and living charitably are profound ways to do this. The giving trends highlighted for 2022 give me great hope and optimism we’re heading in the right direction.

Dr. Sharilyn Hale, C. Dir, MFA-P, is president of Toronto-based Watermark Philanthropic Counsel, where she helps those who give, give well and channel their wealth and influence for good. With a career spanning the charitable sector, she works with leading philanthropists, generous families and social purpose organizations across Canada and the Caribbean. An expert on governance and multi-generational family philanthropy, Sharilyn’s doctoral research led her to develop a model that helps families approach their giving in a way that works. She serves on the Advisory Council for Canada’s only graduate program in Philanthropy & Nonprofit Leadership at Carleton University in Ottawa.

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