Touchy topics

By Monica Patten
Illustration: Mike Constable

Drawing up a will is a good opportunity to look at charitable giving. But not all advisers are comfortable bringing up the subject

How Canadians conduct their charitable giving may just depend on their trusted advisers. Left to their own devices, only 7% of Canadians say they would leave money to charity in their will. However, that figure rises to 27% if the issue is raised while drawing up a will or a financial plan. But what are the benefits to professional advisers’ businesses and how do they incorporate philanthropy into their practices? Regardless of their comfort level in raising the issue, some advisers have found ways to effectively incorporate philanthropy into their practice.

And for Jill McAlpine, FCA and consultant with PricewaterhouseCoopers, it all started with tax returns. “I saw what people were — and weren’t — giving and I asked them about it.” A volunteer on the Community foun-dations of Canada board and the Toronto Community Foundation, she also discovered some of her clients were dissatisfied with their giving. “It was fragmented and unfocused and left them feeling emp-ty. That’s when I knew they needed help.” McAlpine and others have practical advice for anyone interested in broaching the subject with their clients.

Sell yourself
Before she could reach out to her clients, McAlpine needed to invest time and effort developing her own buy-in. “If you haven’t sold yourself on the importance of philanthropy, good luck trying to engage others. To do this well takes an investment of time up front.”

McAlpine looked at her own giving and talked to family and friends about their priorities. Today, she is clear about the benefits of discussing philanthropy. “It’s helped me build my business, build a better community, and it’s given me great personal satisfaction.” But she sets realistic expectations. “This is just one part of my tool kit,” she says. “Having this conversation is only one piece of my practice, and like my other services, sometimes people will be interested, sometimes they won’t.”

Watch for discussion opportunities
“Not every client is ready to discuss philanthropy,” says Kathy Hawkesworth, a lawyer and director of donor services at the Edmonton Community Foundation. “But there are many situations that can trigger a client’s desire to give.” She suggests some good times to talk about philanthropy include:

Estate, retirement, or tax planning — Looking at the big financial picture or drawing up a will is often the perfect time to raise the issue of current giving or future bequests. Reviewing past tax returns may reveal your client’s giving patterns and provide an opportunity to raise the issue.
Financial windfall — An inheritance or substantial bonus may allow your client to do something charitable that they would not otherwise feel able to do.
Sale of a business or real estate — The tax implications of these transactions may be reduced with charitable giving. This may be a time of reflection, the start of retirement or simplifying life, signalling an opportunity to discuss what your client values and may want to support.
RRIFing the RRSP — If RRIF payments aren’t needed to maintain your client’s lifestyle, they could save taxes by donating their payments to a charity or purchasing a life insurance policy in a charity’s name.
Death of a loved one — Your client may want to create a memorial, often to benefit the charities of interest to the deceased.
Significant birthday or anniversary —Your client may wish to create a celebration fund to support their favourite causes and invite friends and family to make a contribution in lieu of gifts.
Simplifying yearly giving — If your client makes annual gifts to charity, creating an endowment fund allows them to continue that support without having to write annual cheques.

Informal conversations can also alert you to any current or upcoming issues. Asking clients what they have been up to since you last saw them can start a dialogue. Such an exchange allows stories to unfold naturally, giving you an opportunity to learn more about your clients and introduce the topic of philanthropy.

Educate yourself
“If you’re serious about incorporating phi-lanthropy into your practice and you want to educate your clients, you have to educate yourself too,” says Kim Moody of Calgary’s Moody Shikaze Boulet LLP.

After a client asked what more he could do than just write a cheque, Moody investigated philanthropy and planned giving. Today he lectures for foundations, gives workshops and lives by the slogan “leverage your wealth; change the world.”

Moody encourages practitioners to explore a range of professional development opportunities, including those offered by legal and accounting associations and organizations such as the Canadian Association of Gift Planners.

Practice talking about giving
It’s no secret some advisers are nervous about raising the issue of charitable giving and even fear it could harm long-standing client relationships. But after more than a decade of experience, Moody has seen only positive results. “I ask this question of virtually all of our clients and I’ve never had a relationship harmed by it,” he says. “I’ve seen the exact opposite result, a complete opening up.”

He may start with questions such as, Are you philanthropic? Do you have philanthropic desires?

Of course, most of us wouldn’t deliver a speech without jotting down a few points first. It’s important to have questions and/ or anecdotes ready to help you raise the subject of charitable giving. You can practice on family or friends first.

Think about adding charitable giving to your list of regular items to discuss with your client — whether you’re completing a tax return or drawing up/reviewing a will.
In advance of meetings you can also provide your client with a printed list of issues and questions (including charitable giving) to be addressed. This gives the client time to consider the idea and ensures the question is not overlooked.

Starting the conversation
Consider some talking points when raising the issue of charitable giving with your clients. First determine your clients’ values and aspirations by asking the following questions:

I know you are very supportive of (e.g., the local soup kitchen, a seniors centre, an alma mater). Would you like to continue your support through your estate plan?
Have you considered what would happen to your assets if your spouse or children do not survive you? Would you like any of your assets passed on to a charity?

Expand your clients’ thinking about their legacy to the next generation using the following starters:

Do you think your three children would mind getting 30% of your estate rather than 33% if you decided to give 10% to your favourite charity?
What would you like to tell your children about what really matters to you?

If your clients are interested in including philanthropy in their plans but are unclear about a particular cause, you might ask them what values, activities and organizations contributed to their success.

Build a team
You don’t have to be an expert in philanthropy to meet your client’s charitable needs — all you need is the right team and the right resources. Many advisers routinely build relationships with key contacts at community foundations and other non-profit organizations, so they can call upon those individuals to work with their clients on an as-needed basis.

“None of us have time to do this alone,” says McAlpine. “You need someone who can talk about the community. People who work with charities, who have different skill sets than you do.”

Finding the information you need can also be a challenge, says Ian Cowan, tax partner with PricewaterhouseCoopers and a board member of the Hamilton Com-munity Foundation.

“I don’t deal with this type of information everyday, and in the past I’ve had to go to many sources to find answers to my questions,” he says.

To help, Community Foundations of Canada launched a Professional Advisors e-Resource online resource kit for financial and legal professionals interested in meeting clients’ charitable needs (www. community-fdn.ca/prof-advisors/ index. cfm). The kit includes profiles of clients who may be ready to discuss charity; sample dialogue for initiating discussion; up-to-date income tax information; and details on a wide spectrum of charitable options.

Monica Patten is president and CEO of Community Foundations of Canada

Technical editor: Ian Davidson, CA, CFP, RFP, MBA, senior financial adviser and VP, Assante Capital Management

Give of yourself, CAmagazine, December 2002

Numbers game, CAmagazine, December 2000

Canadian Association of Gift Planners

Professional advisors and associations, Community Foundations Canada