By Todd Cohen
Over the next 10 to 20 years, $1 trillion in Canadian wealth is expected to pass from older hands to younger ones.
The potential philanthropic impact of that shift has Canadian charities and financial institutions paying close attention.
“It is going to be the greatest transfer of wealth ever known from one generation to another” in Canada, says Ted Garrard, vice president for external relations at the University of Western Ontario in London. “There is a tremendous opportunity for fundraisers, and for donors as well to include charitable organizations in their estate plans.”
That opportunity, echoing a transfer in the United States over the next 50 years that is expected to total at least $41 trillion and pour at least $6 trillion into charity, has fueled an emerging industry.
It includes planned-giving and major-gifts programs at universities and larger charities, philanthropic-services offices at major banks, and a growing corps of lawyers, accountants and other professional advisers who advise wealthy clients on their giving.
* BMO Financial Group for the past two years has encouraged clients to create charitable funds with members of Community Foundations of Canada.
* To help secure major and deferred gifts, United Way of Calgary and Area in 2004 enlisted 5,800 donors as volunteers who contributed 24,000 hours to 650 local projects.
* Toronto-based TD Waterhouse Canada in 2004 created a Private Giving Foundation in which roughly 50 donors already have created donor-advised funds with combined assets of $17 million.
* The Orchestre symphonique de Montréal is targeting individuals for major gifts by linking its annual and endowment fundraising.
The wealth transfer is occurring in sync with several other trends in giving, including the aging of Baby Boomers born between 1946 and 1964, and an increase in giving among wealthier Canadians.
Together, they pose big challenges for charities as they look for ways to engage a new generation of donors who are giving differently and want to be more involved in their giving, experts say.
“The Baby Boomers are a generation with less cash available for philanthropy but greater potential assets,” says Penelope Burk, president of Cygnus Applied Research, a consulting firm in Hamilton, Ontario. “So they’re a generation perfect for planned giving.”
But in a market in which the number of charities is growing, and wealthy donors are giving more but on average are supporting fewer charities, she says, “it’s impossible for the existing fundraising system to be as effective as it used to be.”
With “most of the effort being in a small-dollar, cash, direct-marketing approach to funding,” she says, “it’s a system that was designed for a different generation of donors.”
Other stories in series:
Part 2: Philanthropy booming in Canada.
Part 3: Nonprofits in Canada aim to engage donors.
Part 4: Foundations growing in Canada.
Part 5: Financial-services firms in Canada target philanthropy.
Part 6: Nonprofits in Canada shifting focus to donors.