This text is part of the special Philanthropy section
An unprecedented transfer of wealth in Canada is looming on the horizon with astronomical sums preparing to pass from one generation to the next. But it’s now that we must be active to allow organizations to fully benefit from this great potential in terms of planned donations.
We are talking about a gigantic intergenerational transfer of wealth like we have never seen. According to the Canadian Institute of Chartered Accountants (CPA Canada), no less than a trillion dollars will soon be bequeathed by baby boomers to their heirs of generations X and Y. Descendants who, for many, have been made aware of the social and environmental issues from a very young age, and who are expected to become – we hope – future major donors.
“This transfer will benefit generations who have a desire to change the world and improve it,” confides Daniel H. Lanteigne, vice-president of talent, strategy and impact at the BNP Performance philanthropique firm. With this unprecedented wave preparing to sweep across Canada by 2026, it seems essential to raise awareness of philanthropy among these potential donors today. And this, even if they are not yet thinking of going to the notary to make their will.
Act upstream
“Approaching millennials to talk about planned giving may seem a little crazy at first. But it’s not a question of coming to talk to them about a testamentary gift,” continues Mr. Lanteigne. “We have to start attracting the next generation, to present to them what philanthropy is, because solicitations for planned donations work well if we establish a bond of trust over time. It is precisely this bond of trust that is at the heart of philanthropy. »
In recent years, charities and other players in the philanthropic sector have already done significant work to raise awareness of planned giving, which is slowly beginning to bear fruit. “It’s not going as quickly as we could have hoped. But by making presentations, we reach a pool of different age groups further upstream. Which was less the case before,” underlines Chantal Thomas, senior director of Philantra and private foundations at Banque Nationale Trust.
This awareness-raising work consists in particular of overcoming certain preconceived ideas which constitute obstacles to the development of philanthropy. Contrary to what many people still think, it is not necessary to have made a fortune or to wait until retirement age to act for the good of the community. Planned donations are accessible to everyone, and have enough variations (donations by will, or through life insurance or investments) to adapt to the situation of each person.
“Someone who sells their business is not necessarily 70 years old. But the sale of a business is a key moment to plan a gift for tax reasons. This typically concerns an age group that is younger and that needs to be raised on the issue,” explains Chantal Thomas. “When we talk about planned giving, we often think of people in their 80s or 90s because they could die sooner rather than later. But at 90, it is too late to make a will and open a dialogue,” adds Daniel H. Lanteigne.
Democratizing planned giving
The sale of a business is not the only turning point that cannot be missed when properly planning a donation. “People make wills after they get married, have a child or buy a house. It is also in these moments that we must seek them out. Because if we approach someone to make a donation through a will, it takes time,” explains Mr. Lanteigne, former president of the Association of Professionals in Philanthropy (AFP). For the latter, there is a real communication effort to be made.
“In the vocabulary, the words “planned donations” are still scary. We immediately think of the financial planner, financial advisor, notary… We need to make this as simple and accessible as possible. Organizations have work to do in this area to democratize planned donations, to demonstrate that it is not reserved for the ultra-rich and that there are no small donations,” declares Daniel H. Lanteigne. The focus should also be on what philanthropy can do for society as a whole.
“We may create brochures and websites to explain all the tax advantages of planned donations, but that will perhaps represent 2% of the equation in the reflection process,” explains Mr. Lanteigne. “When we talk about planned giving, we must first and foremost ensure that there is a connection of values. If we don’t do all this, charities risk missing out on a significant amount. »
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