Philanthropy still key factor in charitable giving

Although Ottawa’s move to cut the capital gains tax on donations of stocks to charities has clearly helped the sector, it’s not the main reason behind Canadians’ philanthropic decisions, a new survey suggests.

In fact, 97% of those responding to a poll conducted for Scotiabank’s Scotia Private Client Group said their choices are motivated by the charity’s cause, and 94% said their decisions are driven by personal values.

Still, 76% of respondents did identify tax savings as their prime motivator for giving. The study looked at trends in charitable giving among Canadians with assets of more than $250,000.

“Tax savings aren’t the motivator — they are the enabler for people considering charitable donations,” said Malcolm Burrows, head of philanthropic advisory services at the Scotia Private Client Group. “The practical reality is our clients are increasingly integrating tax planning into their philanthropic decisions.”

Sixty-six per cent of those who have established or considered making a legacy gift indicated that a tax reduction was important in determining the size of the assets for their legacy gift.

The assets most presumed to qualify for tax incentives included bequests by will (68%), art (49%), public securities or stocks (45%), charitable remainder trusts (44%), ecological land (41%), life insurance (37%), annuities (31%), and RRSPs or RRIFs (29%).

“The results send an especially powerful message, particularly following the federal government’s favourable tax treatment on gifts of public securities in the May budget,” said Burrows. “Clearly, there is a need for greater awareness among Canadians with respect to the various options available when considering this type of contribution.”

Ipsos Reid surveyed about 1,500 Canadians this past summer. The results are considered accurate within 2.5 percentage points, 19 times out of 20.

Perhaps not by coincidence, Scotia Private Client Group today launched its own public charity, called Aqueduct Foundation.

Established and administered by Scotia, the new foundation enables clients to make the most of their philanthropic gift through the use of donor advised funds, the private client group said in a release.

“Our clients tell us they want a charity that will organize their giving but don’t want limits on what they can donate or what charities they support,” said Burrows. “Now, donors can set up long-term endowments, and also recommend grants of their fund capital to other charities.”

Aqueduct accepts common gifts such as cash, bequests by will, and public securities, which are not subject to capital gains, as well as real estate, private company shares, and employee stock options. Minimum investment is $250,000.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com