Seniors outnumber children for the first time in Canadian history and their net worth is rising at a time in life when building a legacy through charitable giving — as part of a broad wealth management plan — is often top of mind.
This growing number of philanthropists will determine how Canadians give in the coming decades — and to which causes.
"Baby Boomers are giving more than ever before and getting more engaged in how they give," says Susan McIsaac, managing director of strategic philanthropy at RBC and the former president and CEO of the United Way Toronto.
For example, she says more donors today want specific details on how the charity is using their money and the impact it's having on the cause. Many are also joining the boards of charities to play an active role in their governance.
Many of today's philanthropists are also business owners who are selling their companies and earmarking charities to receive part of the proceeds, says Sonia Park-Root, vice president and private wealth consultant at RBC Wealth Management.
"As clients are aging and starting to sell their businesses — and now that their wealth is more liquid — they're starting to think more strategically about how they're giving, to which organizations, when and who's involved," Park-Root says.
Women and giving
Given that women traditionally outlive men —and are likely to become responsible for the family wealth — there could be a shift in how and where donations are distributed.
Commissioned by RBC Wealth Management, The Economist Intelligence Unit (EIU) undertook a study of 1,051 high-net-worth-individuals (HNWIs), including 259 respondents in Canada, from March to May, 2018. The new face of wealth and legacy survey explores how the meanings of legacy and wealth are being redefined across regions, genders and generations.
According to the survey, 87 percent of women respondents in Canada say they’re in control of their legacy.
McIsaac says women tend to gravitate towards charities that help other women, such as women's health initiatives and female-focussed career and mentorship organizations.
"There's an emerging trend of women helping women," McIsaac says.
Other causes that are popular among women include those that support education, environmental and social causes and the arts, says Park-Root. She says men also support these causes, but women tend to be more active and vocal about ensuring their giving aligns with their values. "It comes back to their belief system: What do we represent? What is the legacy we want to leave behind?"
Those questions then often lead to choices about which charities to give to today and perhaps how to sustain that support when wealth is passed along to the next generation. According to The EIU survey, 73 percent of Baby Boomer respondents (aged 54-72) globally say they have an obligation to transfer values to the next generation.
Park-Root says some of her clients choose specific causes, while others give to broader charitable foundations or take advantage of donor-advised funds to fulfill their philanthropic goals.
Regardless of where the money goes, "much of their charitable giving is values-based," Park-Root says. "They want to be purposeful." According to The EIU research, 66 percent of women in Canada say they have more opportunity to tackle societal issues that are personally important to them.