The phone calls, the e-mails, the pile of letters in the mail. For wealthy families, the avalanche of charitable donation requests can feel both relentless and anxiety-inducing. How to choose which worthy causes to support when the need is so great, particularly as the pandemic continues to cause health and economic harm?
It is a question Jo-Anne Ryan, vice-president of philanthropic advisory services at TD Wealth in Toronto, tackles with high-net-worth clients every day as they balance their philanthropic options. And she says the drive to incorporate charitable giving into their financial and estate plans is more popular than ever for another reason: The parents are often no longer leaving everything to their adult children. It is a recent trend she has started to notice within the past few years.
“Now when we sit down with them the first thing out of their mouth is, ‘My kids are not getting it all because it’s too much,’” she explains, mentioning that some clients even feel their children are successful enough in their own right not to need their entire inheritance. The money would be better spent funding causes instead.
To determine what to fund, however, takes some soul searching and planning. But the time spent is well worth it. Having a solid philanthropic plan that reflects a person’s or family’s values allows for greater impact because dollars are not spread too thinly.
“What we don’t want to see at tax time is people coming in with shoeboxes filled with charitable tax receipts that represent a mishmash of all kinds of different causes out there,” says Ryan.
Besides, having that plan created in advance helps alleviate the stress of turning charitable organizations down if they do not align with a family’s predetermined vision and goals. “It actually becomes easier to say no when the ask comes in,” she says.
Bri Trypuc, a philanthropic advisor in Toronto, agrees that impactful giving starts with proper, strategic planning for another reason: to make choosing from the 86,000 charities in Canada, plus the millions internationally, easier.
“It sounds like a lot, but when you break it down, it actually can get really simple,” she says.
Create your roadmap
Here is how to create your own giving roadmap based on Trypuc’s and Ryan’s advice:
Define your motivation. Time for some soul searching. Ask yourself why you are donating in the first place. Perhaps a family member has experienced a life-threatening illness and donating to research or the hospital where she was treated makes sense. Those personal connections are strong motivators. Or perhaps you are interested in promoting the arts, children’s sports, literacy or affordable housing because your community is struggling in those areas.
Remember, family members can focus on different areas that interest them. Grandparents might choose to fund a new museum, while grandchildren focus on climate change innovation research. A good plan allows for flexibility.
Still unsure where to begin? Ryan shows her clients a list of 50 words that describe values. She asks them to circle the ones that resonate the most, before encouraging them to home in on the top three, then finally the top choice. She says one family she works with went through this exercise before creating its mission and vision statement, which guides all philanthropic decisions. Now the family makes some joint decisions together, but also has individual discretionary spending funds set aside.
Develop your goals. What do you hope to achieve with your philanthropy? This is when it is helpful to narrow your focus and be specific. For instance, “environment” or “health” are too broad. Look at specific challenges and think about the people or geographic locations you want to help. Do you wish to address local or international concerns? (For the record, Trypuc advises that Canada’s national charitable organizations and causes tend to be the least funded. Something to consider if you are looking to make a large impact at home.)
Rather than simply wanting to solve environmental problems, for instance, break them down into areas such as land trusts, habitat protection, conservation or advocacy.
It is also important to decide if you prefer to fund immediate solutions or systemic change. Ryan points to a family she works with who discovered migrant workers near their Florida home needed better living conditions and clean water. They quickly stepped in, donated, and helped solve the problem.
“There’s no right answer. [Systemic and band-aid solutions] are actually both really important,” she says.
Know what success looks like. Whether you decide to fund the arts by creating an award through your family foundation, or you give money to an organization, decide in advance how success will be measured. Do a number of artists go on to write ground-breaking novels, compose music or create new art you admire? Do 40 per cent fewer children fall ill to malaria due to a new innovation the charity has helped fund? This data will help you decide how to give not just initially, but in years to come.
Consider giving time. Although a family might have ample funds to make a difference, sometimes donating time and talent will reap rewards, too. Ryan says she sees women in particular going this route, not only so they can feel fulfilled while connecting with others, but as a way to do their due diligence before donating.
“One of the ways that they do that is to jump in and volunteer. It’s how they get to really know the organization,” Ryan explains, pointing out that these wealthy volunteers get to know the board and directors on the ground floor. “When they become comfortable as a volunteer, they’re prepared to make a major gift.”
By whatever means high-net-worth Canadians decide to approach philanthropy, reaching out to a professional advisor can help – particularly for newly wealthy families and entrepreneurs who do not necessarily have experience in the area.
“When you work with an advisor, it’s just about taking a thoughtful approach to how you’re going to start the path to giving,” says Trypuc. “There are so many ways to leave a legacy of love.”