The Perpetual Debate over Endowments
Charitable endowments are having a challenging moment. Despite the historical success of this medieval European charitable fund structure, the accumulation of capital for public benefit has always faced controversy. Endowments, which focus on long-term public benefit, have a built-in tension between capital and annual spending. Does the capital exist to provide steady future good, or could it be used better now?
Charitable purposes and estate donations
Estate planning is an exercise in time travel. It is impossible to predict the future, especially when the time gap between planning and death is often decades. Fast forward 25 years, a charity may not exist when the estate is distributed.
Time Matters in Philanthropy
SickKids Foundation’s year-end giving campaign has generated a lot of attention for its gripping “Vs” spots. Skillfully edited, the ad borrows fight, hip-hop and adventure movie imagery to dramatize the plight of the hospital’s young patients. This campaign is highly effective and a great example of visceral, urgent annual fundraising. Raw emotion has a place in charitable giving, but it doesn’t serve large “exceptional” donations at tax year-end and in estates.
Community-based Scholarships
Generally educational institutions, particularly at the post-secondary level, do an excellent job of administering awards. In my work, however, I have found a growing number of donors who want to help students who are in a specific community and/or share challenges or characteristics. The goal of these donors is to help the student, regardless of where they intend to study. In other words, the loyalty of the donor is to the future students, not a college or university.
Charity v. Benevolence
Last week I received two inquiries from caring colleagues hoping to help individuals in need. One person had cancer and had lost his business, while the other was a sick child who perhaps could benefit from her own charitable foundation. As heart-rending as these stories are, neither qualify as “charity”. Both are forms of benevolence.
Charitable Matching Funds
As a fundraiser at a university in the early 1990s I discovered that a primary extra incentive for major charitable gifts is matching funds. Typically from government sources, matching funds are compelling to donors and important fundraising tools for a lucky few charities. Unfortunately they create an uneven playing field in the charitable sector.
Canada’s Greatest Impact Donation
Impact is one of those philanthropic buzzwords that’s hard to define, but perhaps easy to know when you see it. The Gooderham donation for Connaught has all the elements.
4x $100 Million+
In 11 weeks between March 25 and June 3, 2019 three $100 million dollar charitable donations were announced in Ontario. On February 13th, McGill University in Montreal announced a $200 million donation. These are enormous sums, and this unprecedented donation cluster is just the beginning of bigger things to come.
It’s useful to understand a bit of context.
The Plague and Charitable Bequests
In 1348 the plague hit Florence – and Europe – hard. Half the population died in this densely populated city of 80,000. One result of this mass die-off was 350,000 florins of bequests to one organization, Orsanmichele, a grain market with a miracle producing Madonna shrine…
The Charity Capacity Gap
Canada’s 85,896 registered charities have wide-ranging capacity, but these variations are often underappreciated. Estate donors – and their professional advisors – often focus on cause and tax status, but ignore organizational health indicators like history, funding, staffing, and governance. What should estate donors look for in a charity?
One in Ten: Why Bequest Donors don’t inform Charities
One in ten. That, according to charitable sector studies, is how many estate donors inform the charities in their will of their intentions. While this ratio varies by charity it underscores a fascinating paradox. Bequest donors trust charities enough to make them beneficiaries of their estate, but they don’t trust them enough to tell them in advance.
When Private Foundations Die
Private foundations are believed to be durable entities. Perpetuity is assumed. Canada Revenue Agency (CRA) data shows, however, that 2,319 private foundations closed during the period 2000 to 2021.
The Philanthropist as Villain
Some of the most nefarious villains in popular culture are philanthropists. The fabulous – and fabulously junky – Netflix series Lupin makes it clear. Philanthropists are smiling hypocrites with too much money and no scruples. Evil.
Restricted Charitable Bequests
One the biggest trends in philanthropy of the last thirty-years is the rise of donor-directed or restricted giving. Donors want more control, which typically results in more restrictions being placed on gifts. But there are risks of placing restrictions on a charitable gift by will.
The Decline of Churches
Organized religion has been the bedrock of the Canadian charitable sector. When charities were first required to register federally in 1967, over 60% of organizations were religious and most were churches. As of January 2022, Christian charities represent just 29.7% of Canada’s 86,080 registered charities. The implications for society, giving, and estate planning are significant.
Charitable Prizes
When Lindbergh flew from New York to Paris in 1927, it was inspired by the $25,000 Orteig Prize. Also in the 1920s, when the International Math Union wanted to honour under 40-year-old rising mathematicians, Toronto math superstar J.C. Fields (under)funded a medal that has been awarded ever since.
Charities Lawyers Don’t Recommend
I recently spoke to an estate lawyer who told me she would never recommend certain charities to clients. Why? Because of the way these charities treated estate trustees. Some charities are unduly litigious, grind on fees, and are obstreperous about releases.
Transparency vs. Anonymity
The calls for greater transparency by charities in Canada is growing. Budget 2022 had a few promises of more reporting requirements for registered charities related to donor advised funds and disbursement quota, although the exact measures are still unclear. What does this mean for the charitable tradition of anonymous giving?
Seven Faces of Philanthropy
The Seven Faces of Philanthropy: A New Approach to Cultivating Major Donors is an iconic American fundraising book published in 1994. In it authors Russ Allen Prince and Karen Maru File neatly categorize charitable profiles. While written for a fundraising audience, the book is a helpful reminder that charitable motivations are diverse. There is not a single way that donors approach philanthropy.
Legacy Alive: G.U Pope in Tamil Nadu
As a philanthropic advisor, I constantly discuss legacy with clients. Beyond a gift by will, a legacy transmits values, acts, and funds in a way that makes the world a bit better place. Quite unexpectedly, I recently found out my great-great grandfather, George Uglow Pope, left what I can only describe as palpable living legacy. I had to go to the south of India to discover it.