Across the globe, there is a vast array of recognized holidays and celebrations that take place over the course of late fall and early winter. While the meaning or purpose behind each specific holiday may vary, there are certain aspects of the season in general that transcend both cultural and regional differences. A central theme that unites many of us during this time of year is traditions of giving and the coming together of family and communities in the name of philanthropic goals. Whether through history, folklore, family traditions or otherwise, the holidays have a way of encouraging a greater sense of empathy and compassion, as well as heightening the focus on doing good for others. In fact, a 2014 survey examining holiday season charitable giving and attitudes about charitable donations found that 62 percent of Canadians intended to donate to charity over the holidays, and 81 percent of those individuals cited “helping the less fortunate” as their motivation to give.1 And though the spirit of the holidays itself is a wonderful thing and many are content just to enjoy “feel good” aspects of the season, the true goal is carrying a philanthropic mindset throughout the entire year. Additionally, with shifting ideals among different generations, a priority is helping youth build an exposure to giving back and making positive change as part of their overall value system.
Canadian culture of philanthropy
As a nation, Canada is routinely viewed in a positive light for its acceptance and pay-it-forward attitude. The foreword of a report by Statistics Canada called Caring Canadians, Involved Canadians (which highlights the survey of giving, volunteering and participating) powerfully sums this up: “One of the remarkable features of Canadian life is the extent to which we reach beyond our families and friends to contribute to others and our communities through charitable giving, by volunteering time to charitable and nonprofit organizations, and by helping individual Canadians directly.”2 And these sentiments exist not just on a national scale, but a global one as well. In fact, at the recent Global Fund conference held in Montreal, it was U2 band leader and renowned activist Bono who praised our nation, strongly noting that “The world needs more Canada.”3 And while this comment was specifically in relation to Canada’s support of global health issues, it paints a clear picture as to how our country is often viewed for its philanthropic and charitable endeavours the world over.
According to statistics from Imagine Canada, our country boasts an estimated 170,000 registered charities and nonprofit organizations, ranking second largest in the world within this sector.4 That number speaks volumes about both the amount of support received by the general population and the amount of people who work directly on the ground and through administration to make these charities and their initiatives possible.
Philanthropy by the numbers
According to 2013 data from Statistics Canada, 82 percent of the population aged 15 and over made a financial donation to a charitable or other nonprofit organization.5 This percentage is very similar to that of the 2007 and 2004 findings in the Caring Canadians, Involved Canadians report, which therefore suggests these trends towards giving are deeply embedded among Canadians. When it comes to volunteering, the same 2013 Statistics Canada findings show that 12.7 million, or 44 percent, over the age of 15 participated in some form of volunteer work.6
Defining individual and family charitable intent
For individuals and families interested in taking up a philanthropic cause, a sense of direction can often be gained by asking a few initial questions: What inspires you to give back to the community? Are there specific causes or organizations that have specific meaning to you? How much time and effort will you have to devote to philanthropy? Is giving back a value you are hoping to instill in your children? In addressing these questions, individuals may gain a better insight into their philanthropic goals, which then helps build the foundation for an action plan. Depending on circumstances, it’s important to consider the most suitable structure for achieving charitable objectives or those of your family, whether that’s through having a private charitable foundation or via a donor-advised fund. In general, it may be a good option to start small and work towards something more formal as your experience and philanthropic vision grows. For those interested in finding out more about giving to a charity, the United Way offers a useful Guide to Charitable Giving.
RBC’s commitment to community and sustainability
Within RBC, “helping communities prosper” is a formal part of our company’s purpose. We recognize the importance of healthy, sustainable communities and are committed to supporting a vast range of initiatives and programs that span social, environmental, artistic and educational realms. Our employees around the world also help their local communities prosper through volunteering, donating and fundraising. This spirit of giving back is exemplified through our annual “Employee Giving Campaign” in Canada, held each fall. In 2015, 23,000 RBC employees raised $17.3 million for charities across Canada, including the United Way. Each year, the spirit of dedication to the campaign grows, which is a true testament to the positive change that can happen when people join forces for a cause they believe in.
Developing philanthropy among children and youth
Social conscience and making a difference are two values largely embedded in Canadian society. The focus for some who have grown up with these values is now passing them on to children and grandchildren in an economically, technologically and socially changing world. Various studies and surveys indicate that today’s youth and young adults may not be seeking out philanthropy in traditional and historically common ways, but they do still rank social responsibility, involvement and conscience as a high priority. The main difference in how some younger individuals view philanthropy is a stronger focus on the cause rather than the organization or charity. In recognizing that the younger generations seek out connections with causes, the focus then needs to be on helping youth first identify the causes they are passionate about and then matching appropriate charities or organizations that support those causes.7
Specifically among Millennials, almost 40 percent identify “making a difference in the world” as one of their top-three priorities — it’s just that their idea as to how to accomplish this comes from conceptualizing giving in different ways. Rather than direct donations to charities, younger individuals are more apt to support social good through volunteering, fundraising events and promoting causes online and through social media.8 From a nonprofit organization or charity standpoint, what this presents is an opportunity to connect with youth and young adults in new and different ways, pushing their causes to the forefront.
Giving back has also become a greater focus at the educational level, as a number of provinces and territories require high-school students to complete a certain amount of community service hours in order to graduate. Certain provinces such as Manitoba, Nova Scotia and PEI use an alternate approach, offering elective course credits or bursaries associated with community service.9 Through these types of mandatory or incentive programs, students gain exposure to various outlets of giving back, which helps them develop a sense of what causes and initiatives are important to them. Whether from education or other community or family learning, statistics indicate that giving back via time and effort is taking hold among younger people. According to Statistics Canada, those aged 15 to 19 are the most likely to volunteer, with 66 percent partaking in some form of community service work. And while some may speculate that this number is a result of the mandatory volunteering in some schools, only 20 percent reported they were required to volunteer. So, the remaining 46 percent who did so by choice still represents the largest national percentage among all age groups.10
For younger children, some early successes in community involvement and giving can help build commitment for future projects. As such, it’s important to help them choose goals that can be achieved with available resources. A good starting point may be to identify a need in the local area, such as food or clothing, for example, or gifts to an animal shelter if that’s an area of interest to your child. From there, help them brainstorm creative and practical ways to achieve it, maybe involving friends and classmates.
Philanthropy can come in many forms
For some individuals, giving equates to monetary donations, but in reality that’s only one aspect. True philanthropy encompasses everything from charitable donations and volunteering to raising funds for a specific cause and participating in a charitable event to performing a random act of kindness. And regardless of how big or small the endeavour is, as a parent, guardian, grandparent or other family member, the valuable overarching lesson is building empathy and making a difference rather than emphasizing just the financial aspects of giving. In this way, younger family members learn about the entire scope of philanthropy and are likely to get much more out of the experience when they have an emotional stake in the outcome of a project.
Another key aspect in educating children and youth about giving back is opening their minds beyond their neighbourhood, school, family and friends. Helping them develop an interest in events in other parts of the country or the world will help shape their values and what they are passionate about. By expanding their horizons in this sense, they’ll be better equipped and confident to choose what they’d like to do with their funds or how they’d like to contribute. Building awareness can bring about a more serious and focused involvement, which may then evolve into a structured series of gifts or pattern of providing service.
Building holiday traditions rooted in philanthropy
When you get right down to it, the holidays are about giving thanks, no matter what a family’s or culture’s traditions. And though many tend to get caught up in the consumerism associated with holidays, this time of year marks an ideal opportunity to shift the focus and draw your younger family members’ attention to all the reasons they have to be thankful and what they can do to give back and focus on the generosity of giving. An option may be to start a new family tradition where you make a project out of the giving process, perhaps culminating in a gift or act of service that feels personal and satisfying to the giver. Depending on the age of the children, ideas to consider include handmade gifts or cards, donating funds that would otherwise be used on gifts to a specific cause or organization, volunteering time at a shelter, donating gifts or clothes to a charity or sponsoring a child abroad. No matter what philanthropic activities you choose, however, it’s important to let younger family members be the architects of the experience as much as possible. This initial involvement may generate habits and preferences towards giving and build associations with doing so during the holiday season in years to come. As children get older, the experience may change, but the goal is that they will be imbued with a culture of giving that will seem second-nature to them.
Charitable giving from financial and tax perspectives
Giving can help build financial literacy:
- Helping children and youth learn the value of giving back is a key component of overall smart financial management skills. Individual personality and learning tendencies need to be accounted for, so it’s important that parents, guardians or other family members identify the method or combination of methods that work for their children. For younger children, the “Spend/Share/Save” strategy is one way to introduce the concept of giving. Whether you provide an allowance for your children or prefer them to earn the funds, which you may choose to supplement with a bonus, the idea is to designate a percentage of these funds that can be spent, another portion donated to charitable causes and the remaining portion saved or invested. The discipline inherent in this approach allows children to manage their expectations when making financial decisions and learn to appreciate the value of saving for future goals. For more details about financial literacy among late teens and twenty-somethings, please view “Financial management among young adults – realities and strategies”
- Let children participate in family discussions to develop an understanding of why you give, how to give and the spectrum of activities that fall under the umbrella of philanthropy. These may include monetary gifts or gifts of time and service. Determine what works for your family, your children and within your community and make it a regular part of life that children come to regard as routine.
Tax benefits of donating to charity:
- Your children may not be able to realize the tax benefits of making charitable donations, unless they have sufficient income to use the tax credits. You can make the donation in your name and claim the tax credit on your tax return. You could let your child choose the charity and involve them in the donation process. You may achieve significant tax savings when making charitable gifts, depending on the province or territory where you live. Each year, you can claim a credit for donations up to 75 percent of the net income reported on your federal tax return, or 100 percent in the year of death or the year prior to death. If your donation exceeds the 75 percent limit, you can carry the excess forward for up to five years. A comprehensive financial plan can help you design a model for donations to ensure that you fully utilize your tax credits in the future.
- Another strategy is to donate publicly listed securities that have accrued capital gains. You’ll benefit from the eliminated capital gain and the donation tax credit, resulting in greater tax benefits than would be realized from donating cash. Plus, to maintain your position in a particular security, consider donating in-kind and using your cash resources to replenish your position. You get the donation tax credit and increase your adjusted cost base without paying tax on the capital gain that was triggered when you made the donation. For more information on potential tax advantages of charitable giving, please view “A tax perspective on year-end”.
The RBC Charitable Gift Program
- Receive a donation receipt for the full value of all eligible contributions made
- Recommend an investment strategy for your Charitable Gift Fund
- Recommend grants from the fund to charities of your choice and on your own timetable
- Turn all administrative paperwork over to our program partner, the Charitable Gift Funds Canada Foundation
Please contact your RBC advisor for more information or get an introduction to an RBC advisor.