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Mackenzie Charitable Giving Program helps investors take charge of building a philanthropic legacy

The firm’s well-established program lets clients play a more active role in charitable efforts, simplifies the giving process and offers tax benefits

By: KATHIE LYNAS

Date: November 11, 2016

Canadians put great value on giving back to their communities through charitable donations, and their generosity is increasing.

In 2013, 82 per cent of Canadians made financial contributions to a charitable or non-profit organization, according to Statistics Canada. Total donations rose from $10.4-billion to $12.8-billion between 2004 and 2013 – a gain of 23 per cent.

The nature of philanthropy has evolved with this growing largesse. As individuals mature and build their investments and savings, they often have more funds available to donate. Many are seeking ways to be more organized about their giving and to create a lasting charitable legacy.

Mackenzie Investments responded to this trend with the creation of the Mackenzie Charitable Giving Program in 2006.

“Our financial advisors were hearing from more clients who wanted to take a more active role with their donations, rather than giving money here and there or whenever they were solicited,” says Carol Bezaire, Toronto-based Mackenzie’s vice-president, tax, estate and strategic philanthropy. “It was clear that we needed a mechanism to allow advisors and their clients to work together on the charitable giving component, and incorporate all of that into clients’ overall financial, tax and estate planning.”

Through the Charitable Giving Program, investors can make regular giving a part of their financial plan and watch their philanthropic assets grow, as their donations are invested in one of 15 eligible Mackenzie funds. The program lets donors give to a charity and enjoy tax savings now, while also setting up disbursement of funds to their favoured charities over time. This type of investment is called a donor-advised fund.

To put the program into effect, Mackenzie created the Strategic Charitable Giving Foundation, a non-profit charitable corporation. With a minimum donation of $25,000 in cash, stocks, bonds, mutual funds or insurance, clients are set up with an individual account that they can name as their individual or family foundation. When a grant is sent to a charity, the foundation account’s name is cited as the source of the gift. Donors also have the option of giving anonymously.

Mackenzie’s donor-advised fund allows participants to get immediate tax savings with one donation receipt, Ms. Bezaire says. Other client benefits include the fact that Mackenzie handles all administrative matters, including record-keeping, tax reporting and issuing cheques.

“It’s flexible for donors as well,” Ms. Bezaire adds. “They can direct us on where they want the money to be flowed every year – and they can choose one or multiple charities.”

This support simplifies the charitable giving process for those who find it onerous, she says. “It is very helpful for many of our older clients who have been philanthropic all their life,” Ms. Bezaire explains. “One client was writing 23 cheques a year to various charities that she and her late husband had long supported. After we opened a foundation account for her, we took over that task and granted out the money to those 23 charities, writing all the cheques for her.”

Recent changes in tax rules governing capital gains and estate disbursements offer even greater opportunities for individuals to gain from this approach to philanthropy.

“Financial advisors can work closely with clients to maximize the tax benefits,” Ms. Bezaire says. “For example, if a person is selling a business, we can support them in decision-making that will reduce taxes on any capital gains and raise their charitable tax credits. We can also incorporate the giving into an estate plan, so the advisors can also talk to the next generation as they work through the philanthropy.”

Mackenzie’s expansion into charitable giving investment has also strengthened relationships between financial advisors and clients. “It allows advisors to get into a deeper conversation with their clients and to bring even more value as a one-stop shop for the full range of financial planning,” Ms. Bezaire notes.

Since its creation 10 years ago, the Strategic Charitable Giving Foundation has grown to include 1,000 donor accounts with total assets valued at $100-million. Mackenzie’s sister financial firms, Investors Group and Great-West Life Assurance Co., offer similar programs; together, the three manage $200-million in charitable giving assets.

“We expect demand for this type of investment to continue to grow,” Ms. Bezaire asserts, pointing out that the next decade will see the transfer of nearly $800-billion in wealth from the most senior Canadians to baby boomers.

“Many Canadians want to share their wealth with charitable organizations and support causes they care about,” she says. “Our Charitable Giving Program gives them the chance to make a stronger and more lasting impact with their generosity.”

Sponsored by Mackenzie Investments

Commissions, trailing commissions, management fees, brokerage fees and expenses all may be associated with investment funds. Please read the prospectus before investing. Investment funds are not guaranteed, their values change frequently, and past performance may not be repeated.

Mackenzie developed the Mackenzie Charitable Giving Fund program with the Strategic Charitable Giving Foundation, a registered Canadian charity. Donations under the program are irrevocable and vest with the Foundation. The information is general in nature and is not intended to be professional tax advice. Each donor’s situation is unique, and advice should be received from a financial advisor. Please read the program guide for complete program details, including fees and expenses, before donating.

This should not be construed to be legal or tax advice, as each client’s situation is different. Please consult your own legal and tax advisor.

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