Aging boomers will prop up charities: TD

Canada’s aging society may increase the need for support services offered by charity organizations, but the retiring baby boomers will also be a boon for the sector, according to a report released by TD Economics.

Baby boomers have never really been the type to just sit still, which has fuelled speculation on how they will redefine retirement. The TD report predicts that many will dedicate their skills and energy toward helping others through volunteerism.

“Boomers are living longer, healthier lives, and represent a tremendous wealth of skills,” says Craig Alexander, vice-president and deputy chief economist, TD Bank Financial Group. “As many seek new challenges and opportunities to give back to society, their contribution of time and energy will help charities maintain service levels and transform into more efficient, business-like operations.”

The TD report, entitled Greying of Canada’s Population Has Far-reaching Implications for Charities, says the boomers will not only contribute their skills but, as a group, will donate a massive amount of capital.

The report predicts that charities will become more efficient in their use of capital in the future as well. Citing the massive donations announced this year by Bill and Melinda Gates and Warren Buffett, the bank says deep-pocketed donors are increasingly demanding more transparency in the operations of the charities they support.

Donors who contribute $100 are not likely to demand much of the recipient, nor do they have much leverage with the charity about how it operates. Increase that donation to $1 million and the donor will probably want to see verifiable results from his or her generosity, and is in a position to demand it.

There are currently 793 billionaires in the world, but the report says only a small proportion following the Gates–Buffett lead would have a substantial impact on the world of philanthropy.

These “social entrepreneurs” find they are better able to dictate the desired results and may even take an active role in the charity itself. They are also expected to inspire many baby boomers of lesser, though still substantial, means.

“As they enter retirement and turn more attention to the charitable sector, they’ll want more accountability and control over how their donations are spent,” says Jo-Anne Ryan, vice-president, philanthropic advisory services, TD Waterhouse, and executive director of the Private Giving Foundation. “This will be a positive development for charities as they are encouraged to adopt governance standards and practices from the business world.”

Changes announced in the 2006 budget are expected to drive increased charitable giving, as donors are now able to claim the full value of equities donations, rather than just the amount initially invested.

StatsCan has recently released data on charitable giving for 2005 and the numbers show that Canadians have been generous with their donations. Based on tax data, StatsCan found the total value of donations reached an all-time high of $7.9 billion, a 13.8% increase over 2004.

The number of donors increased as well, up 0.9% to 5.8 million. Only two provinces showed a decline in the number of donors, as the number in Saskatchewan dropped 0.9% and Newfoundland and Labrador dipped 0.2%.

But both of those provinces posted hefty increases in the amounts donated, rising by 10.5% and 6.9%, respectively. At least 20% of tax-filers claimed a charitable donation in each province, with Manitoba topping the list, with 28% of filers claiming a donation.

Alberta saw the largest increase in donations: a rise of 21.1% in value over 2004. Nova Scotia and Manitoba posted the next largest increases, at 18.5% and 17.7%, respectively.

Despite only 11% of tax-filers claiming a donation in Nunavut, the territory can boast the highest median donation ($400), a distinction it has held since 2000. The most generous city was Abbotsford, B.C., with a median donation of $560, followed by Toronto with a median of $350.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com

(11/23/06)

Steven Lamb