moneyFYI
Financial Freedom Is Merely Organized Common Sense
Charity or Philanthropy
Charity is an event. Philanthropy is a process. Why choose philanthropy?
The research indicates that families that practice philanthropy tend to be more successful. I don’t know why exactly, but I can speculate that families that practice philanthropy are less self-absorbed and that may lead to a more general appreciation of their environment, their business responsibilities and the effects their efforts create. Charity on the other hand may be merely a check. No real commitment and no real measurement of outcome.
Amazon has a book you may find interesting if the philanthropy idea is anywhere on your family radar. This is what Amazon has to say about it.
“This first-of-a-kind book by Roy Williams and Vic Preisser of The Williams Group reveals the hidden power of philanthropy to prepare your heirs for wealth and responsibility. After interviewing 3,250 affluent families, and examining almost 100 family foundations, the authors disclose how successful families are using philanthropy to teach their heirs Values, develop their appreciation for focus on a specific Mission, and instill a sense of Accountability.”
Philanthropy, Heirs & Values: How Successful Families Are Using Philanthropy To Prepare Their Heirs For Post-transition Responsibilities
It may be important for your family and it may be crucial for the organizations you wish to help fund. Fund raising today is a high cost and competitive enterprise.
Did you know that there are a vast number of charitable organizations and non-profits now. Imagine-Canada estimates that in Canada there are 165,000 of them. About one for every 200 people.
That 165,000 and growing number means that many will have trouble surviving for the long run. Traditional charitable donations, (transactional gifts,) are expensive to acquire now and are growing more so. Can a charity count on them being there? Can they count on keeping as much as 75 cents on the dollar? Certainly any that need funding from a government can expect less.
Some years ago I was tangentially involved with a major national charity that has a goal of eliminating their need for month to month fund raising. They had a 50-year goal of being able to provide for all of their needs with investment income. If a charity wants to be independent they cannot count on an ever smaller slice of a shrinking pie.
You can help by giving consideration to a philanthropy layer (process) in your financial plan. It should also include a testamentary gift in your estate plan.
I have noticed that Warren Buffet has created foundations for each of his children to run. It is worth a thought.
Capital gifts from your estate provide investable money so there is ongoing investment income to replace your regular gifts. You become a “perpetual donor” Talk to a financial adviser about the efficient ways to achieve these results.
As a beginning, maybe you could give away your estate’s tax liability.
Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario. don.s@protectorsgroup.com
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