A philanthropy primer

What to know about leaving your money to a good cause

Science shows that helping others can make you feel healthier and wealthier. That is often at the core of why many people – affluent or not – donate to charity or a good cause. In Canada, charitable giving appears to be alive and well among the ultra-wealthy based on several high-profile examples announced in 2019. These included a philanthropist couple with plans to create a $100-million endowment fund to support health research at two hospitals and a university in the city of Hamilton, Ontario; A donation of $100 million to the Hospital for Sick Children in Toronto – its biggest single gift ever; and a $200-million gift for a scholarship program at McGill University – one of the largest donations in Canadian history.

Inspirational examples like these may prompt you to think about philanthropy and how to go about leaving your money to a charitable cause. For starters, not everyone has to be “ultra-wealthy” to make a generous charitable gift or financially support a cause. Today, more people are in a position to distribute their wealth beyond their immediate family. And studies have shown that people with higher incomes are more often approached for donations, which also increases their opportunities to donate and the social pressure to do so1.

Here are some key questions to consider that can help you organize and set priorities for your own charitable giving:

  • If you’re new to philanthropy, what do you want to support; how do you want to support an organization (a one-off gift or multi-year commitment); which platform or structure should you use (foundation; trust; donor-advised fund etc.); and what is your time horizon – (during your lifetime, through your estate or a combination); will the gift be for a limited term or in perpetuity?
  • If you’re already a benefactor, how do you currently support a charitable cause, and is there a more effective structure – that is, a tax-efficient one – so that your legacy has the greatest positive impact on the causes you support?
  • Do you want to be acknowledged or give anonymously?
  • Do you want to involve your children in the act of giving?
  • Do you want to have any charitable bequests outlined in your will?

Making a long-lasting commitment to a non-profit organization requires time and effort and should not be undertaken lightly. Some Investment Advisors may take on or help you with this due diligence. Make sure you understand the organization’s mission, goals and progress as well as its financial health, accountability and transparency practices. Ultimately, you should feel confident about how your donation will be used.

Visit the Government of Canada’s Charities webpage to find out if a charity is registered, revoked, annulled, suspended or penalized. You can also find a charity’s contact information, general activities and financial information.