Buffet & Gates: Lessons for the Canadian Philanthropist

• Scotia Private Client Group® looks at learnings from landmark program
  
• New SPCG survey finds that affluent Canadians want to be actively involved when making a sizeable donation to charity

TORONTO, Nov. 15 /CNW/ - To mark National Philanthropy Day, Scotia Private Client Group (SPCG) looks at the example set by Warren Buffet and Bill and Melinda Gates in the establishment earlier this year of The Giving Pledge. The approach taken both reflects trends in giving and provides guidance for Canadian philanthropists. 

"The nature of giving continues to evolve" said Malcolm Burrows, Head of Philanthropic Advisory Services, Scotia Private Client Group. "The Giving Pledge demonstrates the changes in this area and provides an example for all aspiring philanthropists."

There are three key insights. First is the growth of personal giving and the ways that it differs from traditional social giving. Second is the move to asset-based versus income-based gifts. Third is the need to have the right structure in place to support the gift.

With respect to the first insight, Buffet's and Gates' approach is based on personal giving, as they have asked people to commit to donate at least half of their personal wealth to charity with no pressure on timelines or dollar figures. In contrast, social giving is the traditional effort based on fundraising goals and solicitation.

"Personal giving starts with the individual or family making a decision to give back, rather than choosing a charity or responding to a fundraising request," said Burrows. "The classic personal donor gives without being asked, wants to be involved in how the gift is used, and as a result, the total gift is often much greater than would have been given in response to a solicitation. Personal donors give to express deeply-held values and beliefs, often in response to profound life experiences, and these gifts are often made privately."

In keeping with the personal giving approach, a recent Scotia Private Client Group survey found that of the more than one quarter of affluent Canadians who plan to make a significant gift in the future, almost three quarters of them would want to be actively involved in how it is used. 

The second insight is the use of personal assets (or individual net worth) as opposed to income gifts. Giving exceptional gifts of assets requires a fundamentally different mindset, commitment and process from giving from income. Assets are often too personal to reveal publicly and giving is based on the donor's timeline, in combination with major tax and life events, like selling a family business. As more Canadians consider philanthropic gifts based on assets, it is important that they plan ahead as part of their financial strategy.

"At SPCG, we plan for charitable or philanthropic gifts in conjunction with our overall estate and financial planning," said Burrows. "By getting the plan right, the maximum amount can benefit the family and be released over time for the greatest outcome in philanthropic terms. Canada has some of the most generous tax laws in the world to support gifts of assets, yet only about 40 per cent of affluent Canadians say they are being advised of those benefits."

The final insight is the importance of setting up the right structure to support the intended gift. The reality is that donor priorities change, as does the public and charitable need. The key is having a dynamic giving structure that is flexible and allows gifts to be set up and changed over time and that gives over decades or even generations.

At Scotia Private Client Group, the Aqueduct Foundation specializes in facilitating these exceptional gifts and works to ensure they are integrated with the donor's financial and estate plans.  Donors can make gifts in private and on their own timeline enabling them to shape their legacy.

"Not surprisingly, the world's biggest philanthropists know a few things about giving large sums of money to charity. Buffett and Gates chose private foundations as their structure, however, the best course of action for any would-be philanthropist is to speak to an expert to determine the right structure for their needs," concluded Burrows.

About the SPCG Affluent Investor Poll
The SPCG Affluent Investor Poll surveyed a representative sample of 500 Canadians with $500,000 or more in Investable Assets. The online survey was conducted by Vision Critical among Angus Reid Forum panelists and the fieldwork was completed September 29-October 5, 2010.  Angus Reid Public Opinion is the Public Affairs practice of Vision Critical—a global research company. Vision Critical is recognized as a leader in the use of the Internet and rich media technology to collect high-quality, in-depth insights for a wide array of clients.

About Scotia Private Client Group:
Scotia Private Client Group provides customized solutions to help high net worth clients build, preserve and transfer their wealth.  Scotia Private Client Group consists of private client services from The Bank of Nova Scotia, The Bank of Nova Scotia Trust Company, Scotia Asset Management L.P., Scotia Asset Management U.S. Inc., ScotiaMcLeod Financial Services Inc., and ScotiaMcLeod®, a division of Scotia Capital Inc. Scotia Capital Inc. is a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. Scotia Private Client Group is a registered business name of The Bank of Nova Scotia, The Bank of Nova Scotia Trust Company, ScotiaMcLeod Financial Services Inc., Scotia Asset Management L.P., and Scotia Capital Inc. in the jurisdictions in which they carry on business. Philanthropic advisory services are provided by The Bank of Nova Scotia Trust Company.  For more information, please visit www.scotiaprivateclientgroup.com.

About Scotiabank^®:
Scotiabank is one of North America's premier financial institutions and Canada's most international bank. With close to 70,000 employees, Scotiabank Group® and its affiliates serve approximately 14.6 million customers in some 50 countries around the world. Scotiabank offers a diverse range of products and services including personal, commercial, corporate and investment banking. With more than $523 billion in assets (as at July 31, 2010), Scotiabank trades on the Toronto (BNS) and New York Exchanges (BNS). For more information please visit www.scotiabank.com. ® Registered trademark of The Bank of Nova Scotia, used by its affiliates under license. 

For further information:

Tara Wood, Narrative Advocacy Media, [phone] or
[email protected]

Jane Shannon, Scotiabank Public Affairs, [phone] or
[email protected]