Boomer philanthropy

Get the biggest bang out of donation buck

Dana Lacey, Financial Post, November 14, 2009

A new study by the Bank of Montreal’s Retirement Institute has revealed Canadians are passionate about giving during their lifetime — 84% of those surveyed donated money in the past year — and they’re making philanthropy a lot more personal.

The study, which focused on Boomers, showed that Canadians are moving away from status quo giving practices and are becoming increasingly interested in where their money goes.

“Boomers, the generation who have always been socially aware and involved, and who have always rejected or redefined traditional values, are taking a closer look at their charitable involvement,” wrote study authors Tina Di Vito, director, retirement strategies, BMO Financial Group, and Marvi Ricker, vice-president and managing director, philanthropic services, BMO Harris Private Banking. And the overwhelming majority want it to go to local causes.

In 2007 in Canada, donations reached $10-billion and volunteers gave 2.1 billion hours of their time. But the recession has hit the sector hard: 51% of respondants said they donated less time and money in 2008 because of financial constraints.

It doesn’t have to be this way. Including charitable giving in your yearly or monthly budget can help you give more effectively and maintain the stability to weather economic storms. Nearly half the people who participated in the study admitted that they donate on impulse, often random acts of kindness that stem from solicitations from non-profits, the death of a loved one or the desire to support a friend or colleague who is representing a cause. Of the small group of people who did include charity in their financial planning, only 1% enlisted the aid of a financial advisor to do so.

“To make the impact Boomers crave, giving requires as much planning as saving — but not necessarily larger donations,” the study says.

One way the study suggests for getting more for your donation buck while decreasing your personal tax burden is by taking advantage of Canada’s new tax law, which eliminates the capital gains tax on donations of publicly traded securities (including shares, bonds and mutual funds) to a registered charity. This means donating the securites is more tax advantegous then selling them and donating the cash.

Boomers are onboard for charitable change. Eighty-two per cent reported that they plan to increase or maintain their level of giving over the next five years, regardless of the economic climate. “This is a definite shift in attitude,” Ms. Di Vito says.

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