How more structured philanthropic planning can offer multi-generational benefits.
This article is part 2 of “Philanthropy – What will your legacy be?,” featured in Perspectives Volume 2, Issue 1, Fall 2012 (page 10).
According to 2016 data, Canadians give $12.8 billion annually to benefit thousands of charities and the communities they serve.1 Among Canadians, 82 percent believe charities are important, with 70 percent making a donation in the past year.2 From a giving back perspective, just under half of those aged 15 or older volunteer, devoting an average of 154 hours per year — or 2 billion hours total in volunteer time.3 These statistics speak clearly to the values many Canadians hold when it comes to helping others, as well as to the overall spirit of giving, which often tends to expand even further as the holidays approach. Digging beyond these high-level statistics, however, there are also some interesting findings that highlight distinct generational trends for both how and why people give, shaping what some have labelled as an evolution of philanthropy in Canada. Over time, as social values, technology, communication and connectivity, and population demographics have changed, so too has the approach to giving for many individuals, and one demographic where this is most prominent is among Millennials (those born between 1981 and 1993).4 And while there may be different generational viewpoints of what philanthropy is, and how it’s achieved, it’s important for all individuals to reflect on what giving means to them personally and within their family, and to consider the range of benefits that a more structured, focused planning approach may offer.
Making a difference in the world. It’s a value that approximately 40 percent of Millennials list among their top three priorities, according to The Canadian Millennial Report, and one they strive to accomplish in a variety of ways.5
In the realm of charitable giving, a recent survey indicated that 68 percent of Millennials have made charitable donations in the past year, which is in line with the national percentage.6 And while Baby Boomers still dominate the donor base (with 32 percent of all money donated), both Generation X and Millennials are gaining ground, representing 27 percent and 15 percent of the donor base, respectively.7 Where the generations really start to differ, however, are the channels and the focus of giving. In regards to methods, there has been significant growth in using digital means to make donations, notably among younger individuals, with 54 percent of Millennials giving through online channels.8 In relation to areas of focus, research indicates that younger individuals are moving away from institutionalized forms of giving such as charitable organizations, instead showing a deeper commitment to and support for causes they feel strongly about.9
The redefined approach to philanthropy among younger individuals has also been greatly impacted by online technology. Digital advancements and the growth of social media have played a significant role in philanthropy among Millennials, as a large proportion rely on online environments to connect with others who support the same cause, to promote initiatives and events and to popularize causes among a mass audience. As citizens, surveys also indicate that Millennials deeply value cooperation and consensus, and this is reflected in the fact that 41 percent believe working together as a group can make a big difference in solving community problems and another 45 percent say collective action can make some difference.10 From a philanthropic standpoint, this mentality among a large percentage of Millennials is very powerful, especially when paired with a growing preference for the digital realm, which facilitates the ease of joining others, driving interest, and gaining momentum and support for a specific cause.
According to the most recent Statistics Canada data, younger Canadians are generally more likely to volunteer than older Canadians. Well over one-half of people aged 15 to 24 and 35 to 44, and close to one-half of those aged 25 to 34, have done volunteer work. In comparison, pre-retirees aged 55 to 64 had a volunteer rate of 41 percent and seniors recorded a rate of 36 percent. And among all age groups, adults aged 25 to 34 were the only age group to record an increase in volunteerism during the data collection period.
Digging deeper into the findings, however, while younger Canadians are more likely to volunteer, in total they devote fewer hours than older adults. On average, youths and younger adults aged 15 to 34 recorded only about one-half as many hours as seniors.11 More recent survey statistics also found that among Millennials who do volunteer (which, interestingly, was only 36 percent in this study, with another 23 percent noting they would volunteer but don’t know how to get involved), they put in fewer than five hours per month in most cases.12
While the majority of Canadians take an interest and participate in charitable giving at some point throughout the year, it’s typically short-term in nature and, for many, is more spontaneous and often tied to the end of the calendar year before the tax deadline for charitable donations. Philanthropy, however, is much broader in scope, encompassing all forms and types of giving and giving back. By definition, philanthropy is a more strategic and structured form of charitable giving that involves defining an individual’s or family’s goals and then developing a long-term plan to bring their values and charitable objectives to life. Beyond charitable donations, philanthropy includes the giving of time and spirit, and there is a broad spectrum of ways for people to engage in endeavours, including volunteering, fundraising, promoting a cause, attending a charitable event, or planning or taking part in a charitable initiative.
Specifically in regards to Millennials, some believe this generation has broadened the definition even further through their actions and the values they uphold. Philanthropy has become increasingly embedded as a social value for many younger individuals, impacting many aspects of life beyond traditional giving and giving back, extending all the way into the type of work they are eager to pursue, the brands and products they identify with and purchase, and an increased consciousness of seeing positive outcomes from their efforts and endeavours.
According to Imagine Canada, some of the top reasons Canadians choose to give include compassion for those in need, personal belief in a cause and wanting to help, contribution to local communities, and personally affected by an organization’s cause. With these types of motivations in mind, individuals may wish to consider how a more strategic planning approach to giving can actually result in more meaningful giving, at individual and family levels, and have a more meaningful impact on society. At the core of structured philanthropy is really taking the time to think about and identify your own patterns of giving, what causes and areas are most important to you, why and how you want to give, and the level of involvement you want to have. When developing the most appropriate and effective framework for strategic giving, some key questions to ask include:
By adopting a more structured planning approach to giving, individuals are better able to achieve objectives and express values in a way that balances personal, family and tax considerations, and there are many methods and options to help achieve this, such as outright gifts to charities, timing of gifts, using property and resources, private foundations or donor-advised funds. And in much the same way as planning for retirement, wealth transfer and other financial aspects of life, it’s important to consult with qualified professional advisors to understand the various options available when developing a philanthropic plan and the potential advantages and disadvantages from a financial, estate and tax planning perspective.
For more information about specific philanthropic planning considerations and potential tax strategies, please view the RBC WM Spring 2017 Perspectives article, “A guide to philanthropic giving – today, tomorrow and for generations to come.”
For many Canadians, there’s a growing focus on passing down values of social conscience and making a difference to younger family members and loved ones. For more information on instilling philanthropic values among children and youth, please view the RBC WM Fall 2016 Perspectives article, “A Canadian outlook – sustaining a culture of philanthropy.”
Specifically from a multi-generational perspective, a focused planning approach to giving can be effective for individuals and families within every life stage. For young adults, especially in the coming years and decades as many Millennials are staged to be receivers of wealth being passed down, it may provide a way to more effectively define their convictions, streamline their focus and map out their giving, ultimately making a stronger and longer-lasting statement about their values. And because many younger individuals are so passionate about making a difference, transforming that drive into a strategic approach will further the vision over the long-term. For adults who have children or grandchildren, structured philanthropic giving offers a way to strengthen and embed multi-generational family values, as well as create an approach that can be carried on and preserved and that contributes to leaving a lasting legacy for generations to come.
Within RBC, helping clients thrive and communities prosper is the core purpose behind everything we do. Community and social impact is deeply embedded within our organization, representing one of the five key focus areas for how RBC will achieve its goals, locally, nationally and globally. When it comes to RBC’s community investments, three key areas of focus are youth, the environment and the arts, and in 2016, this translated to $77 million in donations, $63.5 million through the RBC Foundation. The organization also contributed a further $14.1 million to community investment activities globally.
Recognizing the challenges many of today’s youth face, RBC is focusing its donation approach in 2017 and beyond to make a difference in ways that help youth thrive and to drive Canada’s future prosperity. Through RBC Future Launch, donations will centre on charitable organizations that target young individuals during their transitional years; focus on providing equitable access to work-integrated learning experiences; harness the knowledge and goodwill of Canadians using social media, mentorships and other resources to guide young people to opportunities; and, are inclusive and meet the needs of young people from diverse communities. Through these partnerships, the ultimate goal of RBC Future Launch is to help remove barriers and prepare young Canadians for the future of work, shaping a better future.
In Quebec, financial planning services are provided by RBC Wealth Management Financial Services Inc. which is licensed as a financial services firm in that province. In the rest of Canada, financial planning services are available through RBC Dominion Securities Inc.
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