This is one in a series of articles in our special report, “The Changing Face of Philanthropy in Canada.” To see other articles in the series, click here.
On Feb. 21, 2025, Canadian Family Offices hosted an expert panel that explored the changing face of philanthropy in Canada, taking a closer look at evolving trends in charitable giving, from shifting gender dynamics to the challenges and opportunities presented by generational wealth transfer.
The panel featured:
Ron Bernbaum, CEO, PearTree Canada
Aneil Gokhale, Director of Philanthropy, Toronto Foundation
Karen Sparks, Director, Philanthropic Advisory Services, BMO Private Wealth
David Ohayon, Philanthropic Advisor, JCF Montreal
Nadia Wendowsky, Vice President, Leadership and Corporate Giving, Canadian Cancer Society
Here is the full *transcript of the engaging panel discussion:
*This transcript is provided for convenience and is based on the audio recording of the video. While efforts have been made to ensure accuracy, minor errors are possible.
Joe Chidley: Good morning and welcome to the Canadian Family Offices Panel on the changing face of philanthropy in Canada today. I’m Joe Chidley, managing editor of Canadian Family Offices, and I’ll be moderating today’s discussion. But before I introduce our very impressive panel of experts, a couple of housekeeping items. First, unfortunately, panelist David Ohayon of the Jewish Community Foundation of Montreal has been called away to attend to a last minute emergency, and he’ll be unable to join us today.
He sends his sincere regrets and we wish him all the best. Secondly, for our audience members, if you encounter any technical difficulties during today’s discussion, please feel free to press the handy dandy help button on the bottom right hand corner of your screen, and someone will provide you with some help right away. Okay, that’s it. Nice short housekeeping stuff.
And with that out of the way, let me introduce, our expert panel. Aneil Gokhale is Director of Philanthropy at the Toronto Foundation, where he counsels individuals, multi-generational families and professional advisors on philanthropic solutions, including donor-advised funds and private foundations. He loves connecting donors to the community, and he has helped make Toronto Foundation the youngest and most diverse community foundations in North America by bringing in over 250 young fund holders through a philanthropic MBA learning journey.
Next, Karen Sparks is Director, Philanthropic Advisory Services, BMO Private Wealth. She joined BMO Wealth Management in 2011, following progressively senior roles in the financial services industry, specializing in wealth planning, marketing, and communications, and business development.
Today at BMO Private Wealth, she advises high net worth families and business owners on comprehensive wealth planning solutions. As part of an integrated team of wealth consultants and in-house technical specialists, she helps clients articulate and understand their unique objectives for accumulating wealth and acts as a value add resources for investment advisors and their clients, providing a blueprint from which to execute a customized and optimize wealth plan. That includes philanthropy.
Nadia Wadowski is Vice President leadership and corporate giving at the Canadian Cancer Society. Nadia is a seasoned philanthropy executive with over 12 years of experience in major gift fundraising, strategic philanthropy and partnership development. As vice president leadership and corporate giving at the Canadians Cancer Society, she leads a national team driving major transformational and planned giving, working closely with high net worth individuals, ultra high net worth individuals and family foundations.
Next up is Ron Bernbaum, founder and CEO of PearTree Canada. Ron’s a tax lawyer by profession, and he founded Peartree in 2007 as an extension of his and his wife’s volunteerism after he secured from the Canada Revenue Agency and advanced income tax ruling for it is referred to as the flow-through share donation platform. That platform combines two well-established tax incentives. He reduced the after-tax cost of giving down to less than 10 cents on a dollar of donation. Now, almost 20 years later, over $4 billion of flow-through share financings have been sourced for donation, and PearTree has moved from what was once thought of as a cutting edge tax structure to a mainstay in tax effective philanthropic giving and resource finance and territory also acts, as a trusted partner advisor to charities, government, and broadly to the high net worth community.
So, that’s it for the introductions.
Welcome everybody today and let’s get to the questions. I think we’ll start by setting a bit of context about the state of giving in Canada today with a somewhat alarming
and depressing statistic that shows that fewer Canadians are giving to charity every year only about 17 per cent. That’s less than one in five tax filers donated to charity in 2022, and that number has been declining for more than a decade.
So my first question to you, because you’re all connected or work in the philanthropic community, why is this happening? Aneil you go first.
Aneil Gokhale: Thank you Joe. It’a an absolute pleasure to be part of this discussion with my fellow panelists. The numbers are true. People across all income brackets,
have been giving less and less for years. It’s had an enormous impact on the charitable sector.
At Toronto Foundation, we’ve been tracking this decline for over 20 years through Toronto’s vital signs. Our research that we do. And what we do know is that people who are generally less involved in their community also tend to give less. The more people are involved with groups, the more they give. And as a society, we’re increasingly less connected to one another. We’re more isolated. And this has had that huge implications on charitable giving. It’s a problem because the needs are going up while the support is going down. Community-based organizations providing our fundamental support system are facing unprecedented demand, but services for their services, but also persistent declines in donations. In Toronto alone, 30 per cent of Toronto nonprofits report declining revenue from individual donations as recently as 2024. So the way I see it, um, it really is connected to that whole notion of, we’re joining less, we’re being a part of things less. And ultimately that’s just, just sort of, it’s a decline in our, our connection to community, and it manifests itself through donations as well as volunteerism. That’s kind of one, one piece I’d like to add to this discussion.
Ron Bernbaum: If I can just add one obvious piece, and that is times have gotten a lot tougher over the last 10 years. People just have less to give away. I mean, there isn’t, in many instances, people who had some disposable income that they would share no longer have that disposable income. I think that’s something we just all recognize as, sort of an assumption, but it’s worth stating that times are much tougher. And to the extent that the charities are now an extension of social services, it, you’re right, the demand is higher. It’s an infill for failure of government to provide those services that otherwise are being provided by charities. So it’s unfortunate.
Joe Chidley: Nadia, Karen, any thoughts?
Nadia Wendowsky: Sure. I would, uh, piggyback on what was just said to say that I think it’s, you know, there’s a lot of external factors that are contributing to this, as we see perhaps even, more so on the daily. But there is a tremendous amount of economic uncertainty out there. With things like the cost of living, inflation and other determinants, making that disposable income, lesser and lesser for more and more Canadians, it is affecting their decisions around their philanthropy and just how much they can engage in that kind of behaviour.
Karen Sparks: I concur with what Ron said? I think it’s pressure on families, just to look after themselves first.
Ron Bernbaum: That said. In the high-net-worth and UHNW transformational gifts sector, that sub-sector, I think people are stepping up all the more and giving away all more. I mean, they’re passionate about their causes and they have the ability to make those donations. And notwithstanding what the next three or four years of uncertainty will bring us with the US. I think that community continues to address problems and come up with structured fine donations that are, that are remarkable.
Joe Chidley: Go ahead Aneil.
Aneil Gokhale: I was just gonna build on those last two points. I would say the challenge, though is, I would echo, the folks kind of at UHNW, HNW. I think a lot of the folks that would be on this call representing family offices and kind of in this world are connected to these kinds of high net worth, ultra high net worth Canadians. Um, when we’re going down the road of, of setting up private foundations or donor advised funds, we’re setting these structures in place and where, um, we’ve got the money in these, in these funds that now can be distributed to community. I think sometimes the challenge though is, is that I mean, the trends in Canada are that a really high percentage, over 60 per cent, nearly 70 per cent of donations in this country go to 1 per cent of the charities, and they tend to go to the biggest institutions time and time again. And it’s, it is the community level where when we talk about people struggling and the cost of living, the people relying on food banks, on shelters, um, that’s where the need truly is.
And a lot of the big transformational gifts don’t find themselves going into that, those corners of the sector. And so, it’s kind of this compounding effect that tends to happen, unfortunately in the wage charitable giving is happening today.
Joe Chidley: That’s interesting. The burden of giving, for lack of a better phrase, is increasingly falling on the high net worth wealthy affluent groups within society. I think there’s a stat there that the top 1 per cent of earners in Canada account for nearly 40 per cent of donations. They tend to be older and not only wealthier, but older. I’m wondering for Nadia and Aneil in particular, how has this changed the way you go about fundraising or programming, as charitable organizations? What are the challenges here? What are the opportunities?
Nadia Wendowsky: Speaking on behalf of the Canadian Cancer Society we have had to shift along with the times and where we’re seeing the trends now. With the increased sort of burden on HNW and UHNW that are supporting greater disbursement of philanthropic dollars. We have adjusted our programming. So we have put an increased or enhanced effort around our major giving operations. That means having larger staff, having a presence that is, you know, coast to coast to coast, where we can work with these people in a way that is meaningful for them. Having that engagement to Neil’s point earlier, is incredibly important for every organization where we see that these donors are really wanting to get intimately involved in the work that they are impacting directly. So whether that means working together on co-creating new ideas, new programs, and new initiatives, or if it’s just with regards to their expectations around impact reporting, having a direct line of sight or even a direct relationship with the recipients the beneficiaries of their philanthropy, we’re seeing as becoming more and more important. So as an organization, it’s important for us to be able to make those changes, to be nimble, to be responsive to what it is that they’re looking to do, and how they’re looking to seek to get involved with their philanthropy.
Joe Chidley: Aneil?
Aneil Gokhale: Happy to talk about that a little bit, Joe. The Toronto Foundation is one of 200 community foundations, 200 plus community foundations across the country. Karen represents, BMO and, BMO as well as many of the other banks and financial institutions offer donor-advised funds as well. And then our panelist, David, who’s not here, from the Jewish Community Foundation, you know, community foundations, within other ethnic diasporas also have donor-advised funds. There are a lot of options for high net worth Canadians to structure their giving. And of course, there’s the private foundation route, and a donor-advised fund tends to be kind of the alternative in that camp. When we think about high net worth Canadians and those that are in positions to give larger gifts at sort of more transformational times, maybe tied to moments of liquidity, um, you know,
structures like a donor-advised fund or a private foundation are a great initial vehicle for that person or that family. Then it’s sort of connecting the dots to actually help them make impact at the local level to support important organizations like the Canadian Cancer Society where Nadia works and so many others across the country. The point I made earlier about the fact that a lot of money tends to go a certain set of organizations, that unfortunately just continues to happen. And so, you know, many, many larger organizations are staffed up and, know how to work with major gift donors,talk about planned giving, think about many of these ideas, and they’re structured and they, they have the right tactics and, you know, they’re, while giving is down, like they’re still, you know, we see the headlines of the really big gifts on the cover of the Global mail or the huge campaigns that are being outlined, at you know, major institutions. So like that culture is there. What we’re not seeing though, is that connection down at the next level. And so I think this is where organizations like community foundations, can really be a translator for a lot of families to sort of connect their charitable intent to, on the ground actual, you know, good that they can do. And it’s research like Toronto’s vital signs and it’s you know, local United Ways across the country that provide a lot of really important data in Ontario. Um, you know, I would recommend folks to look at the Ontario Trillium Foundation every year. They publish all of the organizations that they’ve granted to, and, you know, they do really important work to kind of go into these organizations and understand what they’re doing, and then share that data because again, these are all resources that help Canadians find the organizations that they want to connect to. And so that’s sort of how I would look at that, Joe.
Joe Chidley: Karen, Ron, from your perspective, when we look at ultra high net worth, high net worth and family offices, how are philanthropic goals and strategies being integrated at that level? How important are they to the, you know, the overall approach and operations and, where’s that going? Karen?
Karen Sparks: Yeah, I would say that most of our ultra high net worth families already have a foundation or a donor-advised fund in place. So our job is to help them, first
of all, give it efficiently. Overlapping on what Ron does, grow it exponentially and grant effectively. And, and I do want to touch on the granting piece because that’s a large part of what we do. As we see clients’ philanthropic wealth grow we want to make sure that they have long-term granting plans, where they can see some effectiveness with their philanthropy. Very often this involves future generations. So we are seeing a generational shift between G one and G two, or even sometimes, G two and G three. And we’re seeing how, um, you know, younger generations are taking a different approach to the philanthropy than, than the matriarch and patriarch did. A lot of the younger generation is concerned about the community issues that we’re facing today, such as, you know, homelessness and food insecurity and youth mental health. Environment, some of the bigger issues that require a bigger commitment to see an impact with.
Joe Chidley: Ron?
Ron Bernbaum: We’ve touched on the donor-advised fund approach, and certainly that’s been the big trend and the bigger trend within the donor-advised fund world, is the fact that foundations are now allowing, a high net worth financial advisor to continue to manage the funds even though they’re housed within the foundation. And that’s been a game changer. I think if you know, the Jewish Community Foundation of Montreal, it’s a good example where 15 years ago when I met them, there was about (inaudible). Today they’ve got 2.4 billion, 2.3, 2.4 billion, but about one seven of that is run by the high net worth. The family office advisor PMs directly, even though it’s been, it’s housed within a tax free account, basically. That’s one trend. But the other one is that I think, you know, maybe that’s across all business, and philanthropy, even though we’re talking about donor advised funds, the first call almost always is to their tax advisor. And whether that means also things such as, insurance or other kind of private company share structures that can be put into place. We work alongside our HNW community and family offices and charities and campaigns all the time. We’re one tool in the toolbox. There’s probably eight or nine of them that are there. We have 8-9 hours of (inaudible) on our website. The tax advisor is the first call by anyone who’s thinking of a major gift. Karen’s group and Nadia’s and Aneil’s, may recognizes that the tax advisors are at the table from the beginning as opposed to afterwards.
Aneil Gokhale: The idea I’m going to keep coming back to is this idea of just really promoting and building that culture of giving, right? And, and of course we want donors thinking that way, but you know, the four of us know, and many folks on this call know that the tax advisors, the professional advisors, they’re the folks that are often the gateway to these families, right? And, and for a lot of us, they are kind of the extension of our work. And so the more we can inspire them, the more we can educate them, um, to really know that these options exist and know what’s possible, it will then kind of filter down to their clients. And to Karen’s point, the multi-generational families, you know, if if advisors are only having conversations with G one in a family, they’re really gonna miss out because as soon as G two or G three starts asking questions and they don’t have that relationship, they’re gonna look elsewhere and they’re gonna find the information they’re looking for in other corners. And so it’s really critical for advisors to be thinking about what, what relationships are they building and maintaining and growing with future generations and families. That also applies to (inaudible) and I’m generalizing here, the patriarch of a family, but thinking about the matriarch as well. And, and because, we all know, right? Wealth transfer. Wealth transfer, thank you. Often it goes from patriarch to matriarch and then to next generation. And so we really need to be thinking about how this all plays out, especially in very affluent Canadian families.
Karen Sparks: And women are driving more and more philanthropy these days. Women have a different approach to philanthropy than men do. Not that men are not philanthropic, it’s just women tend to have a different focus. They tend to be more strategic in their giving, and they like to use philanthropy to teach their children the value of wealth.
Joe Chidley: So you’re saying that women are more attuned to sort of some of the generational issues?
Karen Sparks: Yes, they tend to be more, instead of one-off gifts, they tend to be more thoughtful in terms of planning longer term gifts, and involving family members in, in philanthropic decisions. We see that a lot with, with women. They say they just don’t want to hand money over to their children. They want to teach their, their children the value of money and, and the value of being in a, in a society like Canada, where there is such tremendous wealth and some are more privileged than others.
Joe Chidley: That’s interesting. The intergenerational wealth transfer and the impact on philanthropy, and how it’s changing. Let’s unpack that. Before we get into the other very important topic, which is taxes. Right now, the broad picture is that wealthy, older people account for a lion’s share of giving in this country. That wealth will eventually,
and actually quite soon, I think over the next 10, 15, 20 years, be transferred to the next generation, at least in some cases to the third generation, are younger
Canadians as committed, as engaged in philanthropy in this cohort as their parents, as the older generations. What’s your sense?
Ron Bernbaum: I think everybody’s afraid to say, I think everybody’s sense is less so than more so.
Joe Chidley: Really? Why do you say that, Ron?
Ron Bernbaum: I just think we see it in our… the driving force as, Karen said, is the patriarch then the matriarch, and then to the kids. And the challenge is to get the kids, you know, to have the same kind of commitment. I think in some families it’s built in, the kids are, focused on, on philanthropic causes. I can think of one instance where, you know, where, one of our clients has their five, 7-year-old, 8-year-old in one of the donor-advised funds that are technologically enabled, and they’re giving away $5 a week as part of their allowance, and they’re making their choices even though they’re little kids. Generally I think there’s, I think across all, groups, I think we’ve actually seen the comment made by lots of charities that the next gen is more challenged and as Aneil said more isolated in terms of how people carry on their lives now. So it’s just, just a trend that we’ve noticed.
Karen Sparks: This is a big part of what we do. We try to educate that next generation for the point where they do take over where they do have that decision authority. And to your point, it, it does often reside with the matriarch or patriarch, but once they’re gone, and this is where I think we’re, we’re about to face, an interesting challenge because I think that with,you know, estate plans, money is going to be pushed more into philanthropy when the second spouse dies. And these foundations and donor-advised funds are gonna become exponentially larger through estate planning. And, and then that future generation is going to have to manage that. So that’s what we’re trying to work with is, let’s try and engage the next generation now while mom and dad are still alive so that they’re prepared to take over when mom and dad are no longer here.
Joe Chidley: Nadia?
Nadia Wendowsky: Well, I was going to say, I was suppose looking at it in two different ways. If we think about younger generations, to Ron’s point earlier, I think we are seeing definitely, that there is less giving or that they tend to donate in smaller amounts, but smaller amounts, sometimes even more frequently, sometimes changing how they engage. Whether they’re looking beyond, into more non-traditional forms of philanthropies such as crowdfunding, social enterprise or advocacy. And we see that there’s a lot of interest as well for that engagement and volunteer piece. We have been at the Canadian Cancer Society really thinking about this in an intentional way, thinking about how we can engage with youth, young professionals, recent grads, to really build a comprehensive strategy to make that philanthropy meaningful for them, and also to keep them involved for a longer period of time, because we do see that, younger generations do not necessarily have the same staying power, if you will, or that same long-term affinity with a particular, charity. So they may change, decide to distribute their philanthropy across multiple, different focuses or priorities in, in a different sense too.
Aneil Gokhale: Great points by my panelists. The numbers that you shared off the top, you did specifically say tax filing. Yeah. And I think it’s important to talk about that, right? Because, you know, Nadia just touched on crowdfunding. I think we’ve seen the rise in the GoFundMe, right? None of that is a tax receipted donation, but it is people helping people in need. Younger people are giving more through crowd sourcing than sort of a traditional, a hundred dollars donation a charity that they’re gonna get a tax receipt for. The other point that’s I think important to just really say out loud is, you know, the same way, young people think about their Spotify subscription, their Netflix subscription – a lot of things are monthly. There is a focus on monthly giving that tends to happen. You know 5,8 or 10 bucks a month adds up. And it’s way for charities to get constant support, which is really nice. And once people set those monthly donations up, they tend to kind of forget about them. The only time it really comes up again, is, maybe when their credit card expires and they have to re-up or something. Otherwise, uh, it’s a great tactic to, to try to get, young people in particular started to think about donations earlier.
The one other thing I wanted to talk about was at Toronto Foundation around engaging young people. You mentioned (humble brag) we are the, the youngest and most diverse community foundation in North America now. And that’s really as a result of, a lot of work we’ve been doing since about (inaudible)where we really like actually created, what we called, a philanthropic MBA. And the idea was folks can set up a donor-advised fund for as little as $10,000. Then they’re not just, not just a transactional thing where they’re setting up their fund and then, you know, they pick a charity or two every year to give to from their fund, but they’re actually learning about the philanthropic sector. They’re understanding their own values, they’re understanding about impact investing. They’re meeting executives at organizations to understand how these organizations work, what the data’s telling them. And, and all of this stuff I think is really important. It’s a new way that younger people want to be engaged by charities. And I think younger people are looking For things like collaboration more so they want to see charities actually working together. I saw on Instagram the other day, the Jay’s care (Toronto Blue Jays charity) they hosted an event two weeks ago at the Rogers Center. They brought inan organization called First Book Canada. The entire 100 level, there were just stalls and stalls and stalls of books, and they invited teachers from across Ontario to come and, take these books and, and bring them to the education, to their classroom. And it was a way to show a collaboration between a you know, a sports youth charity and then this reading charity, and you start seeing more collaborations like that that I think are really important. And so young people want to see that kind of collaboration and, and charities working together more.
Joe Chidley: So, young people want to see the same creativity and flexibility in programs and charities that they expect in other aspects of their lives. And on top of that, convenience is key. When it comes to wealthy families, how can they pass on and educate the younger generation about philanthropy?
Karen Sparks: We have a process where we guide families through an exercise to help them articulate their values. We interview family members individually and try to find a common focus, so they can work together as a unit. We also encourage matriarchs and patriarchs to allow some flexibility in their granting—giving the next generation some freedom rather than judging their choices. The main goal is to help them understand how to increase their granting over time. Some foundations start at $5 million and grow to $100 million in just a few years. Granting a percentage of a $5 million foundation is very different from granting from a $100 million one, so we help families scale their philanthropic plans accordingly. We develop multi-year granting plans and encourage families to focus on a cause rather than just giving small amounts to operating charities. Instead of donating $5,000 a year, what if they committed $25,000? We often serve as intermediaries between families and charities to help ensure their funds are used effectively.
Ron Bernbaum: Quite often, the founder of a family business has a much more aggressive agenda than their kids or grandkids. A donor-advised fund is often funded as part of the estate plan or following a major liquidity event. We saw a surge in these funds before June 25th last year when many believed the capital gains inclusion rate would increase. This led many to trigger gains for philanthropic purposes.
We’re seeing more clients fund their charitable giving in advance of their passing. One of the tools we use allows certain expenses to be carried forward into the terminal year return to offset deemed dispositions on death. Many clients choose to donate now based on the tax they’d otherwise have to pay in that final tax return, and much of that goes into donor-advised funds.
Over time, as the next generation inherits the advisory role for these funds, they may not contribute new money, but the corpus continues generating income and disbursing grants—typically 5 per cent to 10 per cent per year, depending on their goals.
Joe Chidley: So, it’s not just about the kids inheriting money and deciding where it goes. They will be managing large foundations or donor-advised funds.
Karen Sparks: Exactly.
Joe Chidley:That becomes both an education and a family governance issue.
Karen Sparks: How do we equip them with the skills to continue this work after their parents are gone?
Ron Bernbaum: And to add one cynical comment, this generational transfer, keeps the family’s financial advisors involved. Whether it’s a family office or a bank advisor, they now have a reason to engage with the next generation, who will control the wealth.
It’s a way of managing a client’s assets beyond their lifetime, but it also fosters continuity. In our world, it’s not just about returns and yields—it’s about passion. We don’t talk as much about our clients’ businesses as much as we do about their desire to help others and involve their children in philanthropy. One way to ensure that happens is by structuring estate plans that tie up significant funds in charitable commitments.***
Aneil Gokhale:I just want to build on that. We’ve talked a lot about large foundations and donor-advised funds. Ron mentioned crystallizing capital gains last year, and while these strategies exist and new ones will always emerge, advisors are constantly working to provide clients with options.
I want to reframe our thinking. It’s one thing to talk about the size of a foundation—whether it’s $10 million, $100 million—but we also need to focus on the size of the actual gifts going out and the money going into the community. That’s really important because when money sits in a donor-advised fund or a private foundation, it has already been tax-receipted, but it’s not actually doing any good yet.
It’s critical for teams like Karen’s and mine to have these conversations with families, to discuss values, provide education, and encourage active giving. Money sitting in these vehicles isn’t helping anyone yet. Sure, it benefits the family because they’ve sorted out their tax planning, but it’s not helping Canadians, the environment, or the causes that need urgent support.
I just want to make sure we don’t lose sight of that. I’m sure Nadia has some thoughts on this, given her experience working within an organization.
Nadia Wendowsky: Absolutely. I completely agree. It’s encouraging to see that in every engagement with high-net-worth individuals and families, we’re not just talking about tax strategies but also the real impact they want to have in their communities and on specific causes.
As wealth transfers across generations, these conversations become even more important. We’re seeing a shift in values—where past generations may have had longstanding ties to particular organizations, newer generations are focusing on issues like social justice or environment and other places. That means we need to rethink how we approach philanthropy, ensuring it aligns with the evolving priorities of these donors.
Joe Chidley: So, how does the Canadian Cancer Society approach this challenge of diversifying interests and moving beyond traditional donation targets?
Nadia Wendowsky: We’re definitely seeing an increased interest in strategic philanthropy—donors want to be more effective, not just from a tax perspective, but in terms of the real impact they’re having.
At the Canadian Cancer Society, donors are taking a more hands-on, interactive approach. As an organization, we’ve had to be more nimble and engage in early conversations, bringing donors together with program managers and executives to explore new projects or enhance existing initiatives that align with their values.
We’re also creating more tailored opportunities, whether through naming and recognition or by sharing impact stories differently—highlighting how philanthropy accelerates groundbreaking research, improves patient support, drive policy change that wouldn’t happen otherwise.
Ron Bernbaum: Speaking of policy change, there’s been ongoing discussion at the federal level about disbursement quotas. It recently increased to 5 per cent, at least one major donor, where the second gen that donor-advised funds and foundations should self-liquidate over 18/20 years – this dynastic control over large funds ought to end.
I think you’ll see some movement in disbursement quota and maybe specifically disbursement quota for the donor-advised fund and more granularly, with respect to each
of those donor-advised fund funds within the larger organization, having a disbursement quota like ledger card by ledger card, I think that’s inevitable. I think it’s gonna happen if not now, or certainly over the next three or four years.
Aneil Gokhale: That’s an important point. Just to clarify for the audience—when someone sets up a private foundation, it’s quite public. Anyone can search for it on the CRA website, see the board members, where funds are going, and review annual filings.
On the other hand, donor-advised funds, even though they exist within public foundations, are much more private. The specific details of what’s in them aren’t publicly accessible, which can be a selling point for donors. However, as Ron mentioned, policies around transparency and disbursement quotas could change in the future.
Joe Chidley: What impact be towards higher disbursement? And mandated wind down?
Ron Bernbaum: One of our clients suggested in an op-ed that donor-advised funds and foundations should be required to wind down within 21 years, similar to how trusts function. Whether or not that happens, there’s been significant discussion at the federal level about increasing disbursement quotas for foundations and DAFs.
Joe Chidley: It that occurs there would be an impact philanthropy planning and estate planning.
Ron Bernbaum: More money to social causes. The largest foundation in Canada is the MasterCard Foundation. That was part of the agreement when MasterCard entered Canada—a percentage of their profits had to go toward philanthropy. But they set up their own foundation and focus much of their giving outside Canada.
Which is unfortunate. But that’s a whole other policy discussion for another day.
Joe Chidley: Good. I think it’s really valuable that Aneil and others brought up the fact that at the end of the day, impact is what really matters.
But tax considerations still play an important role—both personally and from a public policy perspective. Encouraging philanthropy through tax incentives can be a significant driver of giving.
Over the past couple of years, we’ve seen tax policy changes, and even some proposed changes that may or may not take effect, which have had a noticeable impact on philanthropy. In particular, the alternative minimum tax (AMT) and proposed capital gains tax adjustments, which are now expected to be implemented next year.
What’s been the overall effect of these changes? Are people giving more, less, or differently? Now that we’ve had time to digest it all, what are we seeing?
Karen Sparks: The changes have certainly accelerated some giving. Hopefully, things will stabilize now, but in the end, it always comes back to what’s right for the family—what they want to do to align their philanthropy with their values.
Tax policies will always change, but people still want to give, set up foundations or donor-advised funds, and create legacies through their philanthropy.
Joe Chidley: So, people are adapting?
Karen Sparks: Yes, there was some initial panic when the changes were first announced. But once we helped clients understand how they were actually impacted, they were able to make more informed decisions.
As a financial planner, I rarely discussed AMT before these changes—it typically came up in business sales, especially when structured through a family trust involving minors, where AMT could apply. But once the government announced its changes, suddenly, everyone was concerned they’d be affected. Educating clients on who was actually impacted and for how long became a major focus.
Ron Bernbaum: We ran two webinars after the AMT changes, bringing in accountants and other experts. Both were extremely well attended because there was so much concern.
The philanthropic community also stepped up and lobbied aggressively to walk back the AMT inclusion in the calculation for donation tax credits, and they did walk it back, somewhat. Initially, the government proposed that only 50% of donation receipts could be used for AMT calculations.
We ran scenarios showing real life situations where people would otherwise give away property, pay the AMT/capital gains, whatever in 2023, but in 2024 donors giving away assets worth $5 million would have to write a check for $800,000 in taxes—something most people wouldn’t do. Finance officials eventually recognized this and adjusted the policy. However, issues remain. The AMT legislation introduced last March contained errors, particularly regarding the flow-through regime, and while fixes were proposed in August (12), they haven’t been passed yet. As a result, the latest CRA tax forms still reflect incorrect calculations, creating confusion. It’s tough to file taxes when you’re told to “stay tuned.” It’s tough to file when you have to “stay tuned”. At least the rollback on the capital gains inclusion rate was a positive change. And AMT is a big deal, particularly for philanthropy and sectors like mining and exploration, where exploration expenses factor into AMT calculations.
If the August amendments pass, those changes would no longer apply, which would be beneficial—especially for critical minerals, an important sector for Canada.
Joe Chidley: This might be a good time for Ron to give an overview of how the flow-through share platform works in the mining sector.
Ron Bernbaum: Sure. There’s a four-minute video on our website that explains it better than I can, but in simple terms, we commoditize donations. If someone is both generous and taxable, and the cost of giving is reduced, they’re more likely to give—just like any other economic decision. Instead of writing a cheque, a donor first buys flow-through shares, which come with tax benefits tied to exploration expense deductions. This incentive has existed since the 1970s. Immediately after purchasing the shares, they donate them to their chosen charities or donor-advised fund. The charity then sells the shares right away, ensuring immediate liquidity. By stacking tax incentives, the cost of giving drops significantly—often from 50 cents on the dollar to as low as 10 cents, or even less in some provinces. In Quebec, for example, donating $100,000 can cost as little as $2,000 after tax. This structure is widely accepted by both federal and provincial governments and is one of the main ways exploration is funded today.
Joe Chidley: Thanks for that, Ron.
Aneil Gokhale: Kudos to Ron for leading that. And just circling back to tax policy changes—two weeks ago, I was on a call with an executive from a major real estate company who had been there for over 20 years. She had no idea about the benefits of donating appreciated securities. Even basic structures like that are still not widely understood.
So I don’t want to assume that people know this, and I just want to say out loud, for all of our viewers, just do a simple Google search: the advantage of donating appreciated securities.
There are many forms and ways to explain it. Basically, you avoid paying capital gains tax. This was a policy that the Canadian government implemented a couple of decades ago. It was Karen’s friend at BMO, Don Johnson, who really led the setup of that many years ago. Hundreds, thousands of Canadians and charities have benefited from this policy since. It ends up being a great way for many people to make larger donations, especially during moments of liquidity.
I just want people to understand that this tool is available and utilized by more and more Canadians. It’s a policy put in place to incentivize more charitable giving. Something as simple as that is a great way to start exercising that muscle more and more.
Karen Sparks: I’m going to build on that and concur that a shocking number of people are not aware of the benefits of donating publicly traded shares. Furthermore, if they can do it from a holding company where they have a high amount of passive income being taxed at a high rate, not only do they avoid paying tax on the capital gain, but 100% of the unrealized capital gain is credited to the capital dividend account. This means money can be taken out of the corporation tax-free.
That is another strategy that many people are not aware of. Another fact is using insurance for philanthropy. If you make the charity, such as the Cancer Society or the Toronto Community Foundation, the owner and beneficiary of the life insurance policy, you get a tax receipt for every premium payment and can use appreciated securities to pay those premiums. These are some of the tactics discussed when advising clients on giving money effectively.
Nadia Wendowsky: There are multiple giving vehicles that people can and should explore when thinking about tax-efficient ways to give and maximize their impact. As someone involved in a charity, we find it increasingly important for our team to be well-educated to provide that education for people who may not know about these giving strategies. It is essential to consider both the immediate options available today and long-term strategies. Planned giving is an example, and more donors are now exploring blended giving—what they can do today through various strategies, whether utilizing a donor-advised fund (DAF) or donating securities while also considering bequests or donations spread over multiple years to mitigate potential tax impacts.
Aneil Gokhale: One other point to build on is that many smaller organizations may not be set up to receive these kinds of gifts. This is where organizations like Canada Helps can provide valuable support. If someone wants to give to a small local community center but is unsure how, they can explore relationships with Canada Helps or their local community foundation, whether in Toronto, Sudbury, or elsewhere. There are ways to direct gifts to smaller organizations that may not have the necessary infrastructure to handle these types of donations.
Ron Bernbaum: Looking at major donations structurally, the opportunities are extensive. If someone donates through a private corporation, they have 100% added to the capital dividend account. If they still have shares outstanding under their estate freeze, they can redeem those shares out of the CDA, reducing estate tax (inaudible) deemed dispositions. It creates a cascading effect, benefiting both donors and charitable causes. From our perspective, this is a rewarding part of the business. Bank advisors often reach out to us when a liquidity event is coming up, and we conduct multiple analyses to determine the most effective way to give. This service is not fee-based but adds value to what we do. If donors use a flow-through share structure, they can give more at a lower cost, which aligns with the trend of people wanting to maximize their philanthropic impact rather than retain savings for personal expenditures. To the credit of Don Johnson, he spent eight years lobbying the government, largely on his own, to bring about changes in the Income Tax Act that benefited charitable giving in Canada. His efforts had a remarkable impact on the country’s philanthropic landscape.
Joe Chidley: As we approach the end of our time, I have one quick question: Are you optimistic or pessimistic about the future of philanthropy in Canada right now?
Aneil Gokhale: Definitely optimistic.
Nadia Wendowsky: Optimistic as well.
Ron Bernbaum: Optimistic, but we are in for some bumps over the next four years. Cautiously optimistic.
Karen Sparks: Definitely optimistic.
Ron Bernbaum: People who work in philanthropy are delusionally optimistic.
Karen Sparks: We have to be.
Joe Chidley: Thank you. I see we are out of time. We’ve covered a lot of interesting topics—tax policy impact, innovative giving strategies, adapting to shifting environments, and demographic changes affecting philanthropy. I hope the audience found it enlightening.
Thank you to our panelists and our audience for watching and listening. We would love to hear your feedback. If you want to share your thoughts on today’s presentation, email newsroom@canadianfamilyoffices.com.
Thank you again. Hope to speak with you all soon.
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