Canadians love to give to charity. A 2010 Statistics Canada report suggests that 84% of Canadians over 15 years donated to charitable and nonprofit organizations with average charitable donations of around $446 per year (a total of $10.6 billion a year).
Whether to support an organization that has touched their life in a meaningful way, a school or university that put them on the road to success, or simply a cause that they feel passionate about, donors want to contribute to the well-being of their fellow citizens and organizations and advance principles and values that they believe in.
The Benefits of Giving
Most Canadians understand that there are tax benefits while you are alive, as well as to an estate, by giving to charity. However, many Canadians would be surprised that they and their family might benefit just as much as the recipient charities from their generosity.
Donating to the causes you and your family care about is often deeply rewarding for the donor. Having the power to improve the lives of others, and acting on these powerful feelings of responsibility is a great way to reinforce our own personal values and ethical beliefs. Donating to charity is also proven to be a major mood-booster as it can make the donor feel happier and more fulfilled.
Sharing the experience of philanthropy with your family can help build a healthier and happier family culture. Including children in charity, models to kids from a young age that they too can make positive changes in the world. Nurturing a child’s innate generosity is likely to mean that they grow up with a greater appreciation of what they have, and will carry on supporting charity in years to come. Including other family members can inspire a family-wide effort to give to causes that have special significance to you as a group. Family giving creates a deep bond, helping to bolster relationships through a shared goal. Working as a family also results in raising more money than could otherwise be possible through individual donations.
The good news is that regardless of wealth level anyone can make a difference in the world and gain these benefits during their lifetime, or through their estate plan. The challenge is that trying to help and make a real impact can be harder than it looks. The key is to plan before you give.
Most Canadians tend to give when asked for a donation by a friend, at a checkout line or at a fundraiser. Unfortunately, these small or last-minute gifts may not be the best way to donate one’s dollars to get the desired impact. Dubbed “sporadic philanthropists” in the charity industry, Canadians who give this way tend to give on a spur-of-the-moment basis, based on emotions and short-term goals without giving much thought to the best approach to giving. Unfortunately, sporadic small gifts are less efficient for the charities than larger and ongoing gifts. What results is the donor’s charitable dollars have less overall impact than possible with a strategic approach.
Just like you shouldn’t invest your hard-earned money without a plan, neither should you give charitable donations without some direction. Many of us have heard about “strategic philanthropy” or “corporate citizenship” in the context of corporations giving back and doing cause marketing and aligning their brand with charitable causes.
These same principles can be used on a personal level. Personal strategic philanthropy consists of creative, well-informed donation strategies, to maximize the impact from your charitable investment. Strategic philanthropy involves having a long- term vision and approaching philanthropy as a long-term investment in causes that can produce the kind of impact that is meaningful to you and your family and ultimately extend beyond your lifetimes.
Consider a case where a business owner typically donates $500 per year to 20 different charities. This type of giving does not afford her a huge impact on any of the causes and offers no legacy to her charity. If she instead donated $5,000 per year to two different charities, not only could this money be directed to the specific program to have focused impact, but the change generated could have a lasting legacy on the charity and the cause.
Best Practices for Strategic Charitable Donations
You may have the capacity and desire to give, but may need help in determining the most effective way to ensure your charitable donations have the biggest possible impact and ideally, leaves a lasting legacy. The strategic philanthropist typically follows these steps:
- define the impact you want to have on your chosen charity(s) whether it’s to alleviate poverty, conserve a species or ecosystem, promote human rights, or support local arts or sport.
- create an annual and / or lifetime giving goal and then build a meaningful long term relationship with charity(s) of choice to work with to plan for the best use of these funds to effect the impact you would like to see.
- treat your investment in a charity the same as you would any investment. Apply the same discipline to your philanthropy and periodically evaluate the outcome of your donation.
You need to use your head as much as your heart nowadays to be certain you’re giving to the charity that will most effectively steward your contribution. Once you have found your passion and created a plan, another important step is to ensure that this plan aligns with your estate plan. Your estate lawyer can assist you in updating your plan to mesh with your and your family’s giving plan.
Our team at Pihl Law Corporation offers complete Estate law services to clients including estate planning, estate administration and estate litigation services. Contact us today to get started.The information provided above is for educational purposes only. This information is not intended to replace the advice of a lawyer or address specific situations. Your personal situation should be discussed with a lawyer. If you have any questions or concerns, contact a legal professional.