Canada’s philanthropy sector is encountering challenges: fewer Canadians are donating; there’s an over reliance on ultra-high-net-worth donors and overall, engaging the next generation is proving to be somewhat difficult.
To address these issues, plus answer over fifty questions submitted by readers (unfortunately due to time, we couldn’t answer them all) Canadian Family Offices’ hosted a philanthropy panel titled “Who Will Give? Philanthropy and the Next Gen,” sponsored by PBY Capital on Thursday, February 26 .
There was an excellent lineup of experts in the field that explored the challenges and opportunities around philanthropy and the next generation, featuring Dr. Sharilyn Hale, principal, Watermark Philanthropic Counsel; Ron Bernbaum, CEO and founder of PearTreeCanada; Julie Quenneville, CEO of the UHN Foundation, and Danielle Robinson, national director, philanthropic advisory services, BMO.
Numerous topics were covered in the discussion, including: the shift experts are seeing when it comes to giving, DAFs, family foundations and what the donation landscape looks like today.
Younger philanthropists
Younger philanthropists are keeping those in the philanthropic sector in Canada up at night; deciphering how the next generation is giving and the areas which they want to give, can vary significantly between the generations. One panelist pointed out that engaging with younger people and finding points of intersection between generations can be helpful for everyone involved. Bernbaum discussed the key issues he is seeing with younger philanthropists.
Shifts when it comes to giving
Joe Chidley, the moderator, asked the panel, “Have you found the younger generation are more interested in other granting focuses? Other philanthropic interests? Traditionally, healthcare, arts, and education are big for the current cohort of big donors. Is that likely to shift as we move towards the next generation?”
Here’s what Bernbaum said about the shifts he’s seeing:
Interaction with donors
A trend that Bernbaum is seeing is that Canadians are planning for when a family no longer lives in Canada due to high tax rates. Whether this is a larger trend or something he sees specifically at because PearTree Canada focuses on Flow-Through Share Donation Platform (FTSDP) that enables high-net-worth donors to significantly reduce the after-tax cost of charitable giving, remains to be seen.
Chidley also pointed out that this could be a mobility issue as well with younger Canadians having more access and viewing themselves as global citizens.
Looking forward
Bernbaum added this to the discussion around DAFs and sophisticated planning framework from some families:
We are registered lobbyists here at PearTree, both federally and with some provinces, and there’s a lot of discussion at the federal level, especially, about taking family foundations and DAFs and increasing the disbursement quota; as such, that if you set a disbursement quota of 10 per cent it will self-liquidate in 15-20 years. And as deficits continue to run, it’s almost inevitable (and this is not something I’m raising, this is something I’ve seen from some of the briefing memos) about increasing the disbursement quotes—so that the family foundation—that was expected to run for 30-40 years (in perpetuity), but under new legislation, you may find, there’s a lifespan of 15-20 years. And to Julie’s points it might be a good thing. Unlocking the tens of billions of dollars might be a good idea.
In the closing comments from panelists, each panelist offered some ideas for charities to help engage the next generation further.
According to Bernbaum, there’s a disconnect between next leaders in charities and those we seek to engage with in terms of the broader community. Charities need to bring in folks that speak to their peers versus speaking down to others.