Role can be to align clients' philanthropic plan with values

Professional advisors should ensure they share with clients the importance of developing a philanthropic plan aligned with their personal values along with their estate plan, recommends Patricia Lovett-Reid, Senior Vice-President, TD Waterhouse.

Rather than facing a "mishmash" of tax receipts at the end of the year, garnered by responding willynilly to any and every solicitation at the door, through the mail, or over the phone, she says, people need to make choices.

The plan should enable them to "devote their money and their energy to a few specific causes that are important to them," she says. "The selected charities benefit from having a steady and engaged donor, and the donor benefits from a greater sense of involvement and satisfaction."

Leading off a session attended by professional advisors and sponsored by the Ontario Division of the Canadian Cancer Society, Lovett-Reid notes that the charitable plan will no more be static than the client's investment plan, both changing with life's events and requiring intermittent review and updating.

Six-step process

A six-step process can be used to help a client put together a charitable plan, she recommends:

  • Identify the values which are most important to the person, be those family, justice, education, dignity, disease prevention or cure, animal care, or social service;
  • Have the person identify the causes s/he deems important, and ensure those causes reflect the person's values;
  • Let the client choose whether preferred causes would be local, provincial, national or global;
  • Encourage the client to undertake research, probably through the Internet, through general information sources and charities' own web sites;
  • Urge the client to do due diligence, just as with any investment – get hold of the charity's financial statements, check who's on the Board of Directors, learn about its funding sources, gauge its success at restricting administration costs to a reasonable level;
  • Have the client talk directly to the charity under consideration; most of them will have gift planning resources and people who can help him/her decide the form of gift which would most effectively carry out the values and wishes identified at the beginning of the process.

There are, of course, major tax implications to a decision to donate to charity, whether a live gift or a bequest, Lovett-Reid points out. While leaving the details to the panel of experts attending the session, she echoes Malcolm Burrows in his presentation to Southlake Regional Health Centre ( CF November 15), in pointing out that anyone who has any money is perforce going to have to use some of that money to meet the needs of Canadian society, whether or not s/he wants to.

Social capital mandated

Social capital is mandated in our society, she notes; the question is whether it will be "self-directed giving" through charity or "managed giving" passing through the hands of government. The former, she contends, is "a quicker, more efficient, and targeted way to give social capital."

While tax considerations should never be the major motivator in deciding to give to charity, advisors have a responsibility to help clients maximize the availability of tax credits.

She also hopes advisors will think about the difference between philanthropy and charitable giving. The latter might only entail writing an annual or monthly cheque to a faceless charity. "Philanthropy," she says in contrast, "is an exchange of values that results in a donation. It's an investment in a cause, giving to a solution, and often represents a longer-term commitment."

It's not the size of the gift that matters so much, says Lovett-Reid. The important thing is to get clients thinking strategically about their giving.

Advisors were able to expand on her message by participating in a Q and E session with panellists Jo-Anne Ryan, Executive Director, Private Giving Foundation, TD Waterhouse; Karen Slezak, Tax Partner, Soberman; and Graham Hill, Personal Giving Co-ordinator, Canadian Cancer Society, Ontario Division.

For further information: Patricia Lovett-Reid, Senior Vice-President, TD Waterhouse, 416/308-5735, patricia.lovett-reid@td.com; Nancy Collett, Senior Co-ordinator, Personal Giving (Allied Professionals), Canadian Cancer Society, Ontario Division, 416/488-5402, ext 2318, ncollett@ontario.cancer.ca.