www.theglobeandmail.com Open in urlscan Pro
2600:141b:5000::17db:5223  Public Scan

Form analysis
0 forms found in the DOM

Text Content

Skip to main content
Subscribefrom $1.99/week
Register
Log in

AdChoices
 * Canada
 * World
 * Business
 * Investing
 * Watchlist
 * Personal Finance
 * Opinion
 * Politics
 * Sports
 * Life
 * Arts
 * Drive
 * Real Estate
 * Podcasts







HOW TO MAKE CHARITABLE DONATIONS GO FURTHER AS INFLATION AND INTEREST RATES RISE

Alison MacAlpine
Special to The Globe and Mail
Published October 25, 2022

People who think like philanthropists have already set money aside for the
causes they want to support – whether that’s in a private foundation,
donor-advised fund or bank account – so they’re less likely to change their
plans based on current market conditions.donald_gruener/iStockPhoto / Getty
Images

0 Comments
Share

Bookmark
Please log in to bookmark this story.Log InCreate Free Account

Are you a professional financial advisor? Register for Globe Advisor and then
sign up for the weekly newsletter on our newsletter sign-up page. Get exclusive
investment industry news and insights, the week’s top headlines, and what you
and your clients need to know.

Canadians often make charitable donations toward the end of the year, both as a
seasonal tradition and to take advantage of a tax deduction in the current
taxation year. But, in the face of inflation, rising interest rates, market
volatility and a potential recession, some may be scaling back their charitable
plans.

That makes it all the more important for advisors to point out strategies to
their clients that make each donated dollar go further.

“In general right now, people are, of course, more cautious with how they choose
to spend their money,” says Jennifer Watson, managing partner at Watson
Investments in Oakville, Ont., and an advisor with Aligned Capital Partners Inc.

“We want to help our clients do what they want with their money, and help them
do that in the way that’s going to preserve as much money as possible and help
grow their money. … It’s no different with charitable giving.”

One of the most tax-effective ways to give, Ms. Watson says, is to make an
in-kind donation of a security that has a capital gain. Although financial
markets have been rocky this year, there are still some of those out there.
Transferring a security directly to a charity means there’s no capital gains tax
and results in a donation credit for the current market value.

For those who are business owners, Ms. Watson says it’s worth looking carefully
at whether it makes more sense for the company or the individual to make the
donation.

If the money has to come out of a corporation to cover a personal donation, it’s
important to have other reasons to incur the associated tax. That may make
sense, for example, for someone who will be applying for a new mortgage and
needs to demonstrate a certain amount of personal income. If there isn’t a good
reason to take money out of the company, making a corporate donation may be a
better option.

“You’re looking at it … from the perspective of what else is going on, and then
how can I get access to money with the least amount of taxes paid but still
achieve the value we’re trying to achieve,” Ms. Watson says.

TAKE A STRATEGIC APPROACH

Thinking like a philanthropist – rather than making one-off, modest donations –
can stretch charitable dollars, says Marvi Ricker, managing director of family
philanthropy and legacy planning at BMO Family Office in Toronto.



She says philanthropy needs to be “carried out in a manner that is meant to have
an impact on an issue, and it should be measurable and [driven by] a thoughtful
process over a long period of time.”

People who think like philanthropists have already set money aside for the
causes they want to support – whether that’s in a private foundation,
donor-advised fund, or bank account – so they’re less likely to change their
plans based on current market conditions.

Ms. Ricker adds that people can stretch their charitable giving dollars by
looking for matching opportunities. For example, to support recovery after
Hurricane Fiona, the federal government announced it would match personal and
corporate donations to the Canadian Red Cross for at least 30 days after Sept.
25. And, periodically, wealthy donors step in to match donations up to a certain
amount to encourage giving to health care and education fundraising campaigns.
Matched donations mean every dollar donated is worth two dollars to the charity.

“My role in advising people isn’t so much to say, ‘Give to this versus that,’”
Ms. Ricker says. “It’s to help [clients] figure out what’s important to them.
What are their passions and aspirations? What are their interests in the
charitable sector? And then to help them do it in an efficient and effective
manner and in a way that they know they’re having an impact.”

SYSTEMATIZE CHARITABLE GIVING AND GET CREATIVE

Charlie Spiring, founder and chairman at Wellington-Altus Financial Inc. in
Winnipeg, says that, in general, the wealthy are sticking with their
philanthropic plans. It’s middle-class people who are feeling the pinch in the
current environment. He also thinks a more strategic approach to charitable
giving can help.

“The key is to do your planning in advance and put your [philanthropic]
allocation away. Some people do 1 per cent, some do 2 per cent, and some do 5
per cent,” Mr. Spiring says. “But if you really, truly, strongly believe in it,
planning will get you there. And when you put some money aside, you don’t seem
to miss it as much.”

He’s seen this strategy work in practice. As an example, he points to the United
Way campaigns that encourage people to donate a little from every paycheque.
Systematizing charitable giving makes it a habit, and habits are hard to break.

It’s also possible for people – including advisors – to leverage their time and
creativity to amplify charitable contributions. During the pandemic, Mr. Spiring
approached his larger clients and explained that he and his wife planned to buy
meals from struggling restaurants to feed people in need. In the end, he raised
$1-million that helped keep restaurants afloat, their employees working, and
people fed.

“It was great to match up those that had time, money, or both to make it work,”
Mr. Spiring says. “There’s always a way if you have the will.”

For more from Globe Advisor, visit our homepage.

Follow us on Twitter: @globeadvisorOpens in a new window


Report an error

Editorial code of conduct


COMMENT

Read or post comments0


Welcome to The Globe and Mail’s comment community. This is a space where
subscribers can engage with each other and Globe staff. Non-subscribers can read
and sort comments but will not be able to engage with them in any way. Click
here to subscribe.

If you would like to write a letter to the editor, please forward it to
letters@globeandmail.com. Readers can also interact with The Globe on Facebook
and Twitter .

Log inSubscribe to commentWhy do I need to subscribe?

Discussion loading ...


Read the most recent letters to the editor.





MORE FROM GLOBE ADVISOR

Why investors are not fussed with top advisors’ fees despite shift to down
market

globe advisor weekly newsletter
There’s ‘a lot of apathy’ about updating estate planning documents

Should investors follow Canadian pension funds to India?

Deceptive fund name crackdown puts investment managers on edge

opinion
Do central banks have a credibility problem?
James Thorne





YOUR GLOBE

Build your personal news feed

More info

FOLLOW TOPICS RELATED TO THIS ARTICLE:

 * Career development
   Follow
   You must be logged in to follow.Log InCreate free account
 * Money
   Follow
   You must be logged in to follow.Log InCreate free account
 * Personal finance
   Follow
   You must be logged in to follow.Log InCreate free account

Check Following for new articles


Canada’s most-awarded newsroom for a reason
Stay informed for a lot less, cancel anytime
“Exemplary reporting on COVID-19” – Herman L
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
Subscribe now
Cancel anytime
Canada’s most-awarded newsroom for a reason
Stay informed for a lot less, cancel anytime
“Exemplary reporting on COVID-19” – Herman L
$1.99
per week
for 24 weeks