Strategic Philanthropy: How to formulate your giving plan

Insights

Thinking about building your philanthropic legacy, but not sure where to start? Whether you have $100,000 or $5 million to donate, developing a strategic plan can help to enhance the impact of your giving, enabling you and your family to build a legacy and achieve your goals.

 

Articulating your philanthropic goals and mission statement

 

Determining your motivation for giving is the first step in developing an effective philanthropic strategy. Answering the following questions may help to define your goals:

 

-What kind of legacy do you want to leave?

-What issues are of concern to you now and in the future?

-What are your core giving objectives?

-What do you consider “meaningful impact”?

-How do you want your family members to be involved?

 

Once you have defined your goals, creating a mission statement can articulate how you plan to achieve them. This statement provides guidance and a framework to stay focused on the causes  you want to support. For example, you and/or your family may choose to solely support charities that advance education and literacy. Your defined goals and mission statement could read:

 

Philanthropic goal: Provide access to education

Mission statement: Provide access and post-secondary tuition support to low-income youth in our community.

 

 

Multi-generational giving

 

Engaging your children and/or grandchildren to participate in your philanthropic efforts can help to introduce them to thoughtful giving and also help them develop their own values around giving. Your goals and mission statement may reflect the shared values of the entire family, not just your own.

 

Choosing causes to reflect your giving goals

 

The next step is to choose charitable organizations aligned with your goals and mission statement. Answering the following questions may help to select organizations:

 

-What charities have you supported in the past and why?

-What causes do you want to support?

-What charities help advance the causes that are important to you?

 

Create a list of charitable organizations that interest you. Organizations like CanadaHelps and Charity Intelligence Canada can help bring some clarity to your decision-making process. You can also do your own research and reach out to organizations directly that are aligned with your mission to learn more about their accomplishments, social impact and long-term goals. Donors can also request to stay in touch with the organization and receive regular progress reports.

 

How to give to the causes you care about

 

Now that you have defined your goals, created a mission statement and determined the causes  important to you, the next step is to determine how to support the charitable organization that work on the issues and causes you’re passionate about.

 

There are many ways to give. Part of developing your giving strategy is deciding how you want to disburse your donation. Choosing the right vehicle can help structure your giving. Do you prefer to donate directly to charities, or would you prefer to use an intermediary vehicle, such as a donor advised fund, or a private family foundation that will support your favourite charities over time?

 

Indirect giving: Establishing a private family foundation

 

For some individuals, establishing a private family foundation may serve their philanthropic goals and mission statement. High-net-worth individuals may want more oversight into how their donations are used, and more evidence of impact. However, establishing a private family foundation can be time consuming and costly.

 

Private family foundations require a certain level of involvement from the donor. You will likely need to retain professional support to ensure the foundation meets its filing and compliance requirements. Private family foundations are in fact registered charities and many of their activities, including grants, directors and financial history are available to the public.

 

Indirect giving: Donor advised funds

 

For many individuals, a donor advised fund may be an alternative to a private family foundation. Like private family foundations, donor advised funds allow the donor to make an immediate upfront donation to a separately named fund and then recommend grants from the donation to their favourite registered charities over time, as approved by the foundation. Like all donations, including those to a private family foundation, the donor will receive a tax receipt for the value of the donation.

 

Think of a donor advised fund as a charitable savings account. Your donations into the fund are simply “charitable deposits” (at which time you receive your taxable benefit), and your recommended grants to registered charities represent the withdrawals.  You can support any Canadian registered charity through your donor advised fund.

 

Like all charitable gifts, donations to a donor advised fund are completely irrevocable. As the fund’s advisor, you recommend amounts you would like to grant to charities you’d like to support.

 

One of the biggest appeals of a donor advised fund is its simplicity—they are like a one-stop vehicle for all your charitable giving needs. It allows donors to give in a much more efficient way. In many ways, it is like having the benefits of a private family foundation without the administrative oversight and the upfront costs.

 

A donor advised fund can also function as a stepping-stone towards building a private family foundation. It can serve as an easy entry into philanthropy until you feel you are ready to take on the responsibility of a private family foundation.

 

Regardless of how you choose to give, establishing your mission and goals within a strategic giving plan will help you to measure impact. It will also help increase the success of your legacy building and enable different generations of your family to get involved in giving to the causes you care about. Documenting your plans is a powerful way to ensure you are giving with purpose.

 

Many financial institutions, such as Gluskin Sheff, have in-house donor advised funds to facilitate your giving. For more information on the Gluskin Sheff Foundation for Philanthropy, contact 1-416-681-8940 or foundation@gluskinsheff.com.

Gluskin Sheff Foundation for Philanthropy

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