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Rarely a week goes by that we don't see an announcement of a record gift to a hospital or university.

And it was hard not to be moved by the elderly Nova Scotia couple who, after winning $11-million in a lottery, gave most of it away.

While these kinds of gifts get the headlines, under the surface there are a number of forces transforming the charitable giving landscape.

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The billionaire's challenge

The most widely used measure of charitable giving across countries is donations as a percentage of gross domestic product – using this measure, the United States is more than twice as generous as any other country. By contrast, a recent Statistics Canada report showed our individual charitable giving last year at $8-billion, down for the second consecutive year; this is less than 3 per cent of the U.S. total or roughly a third, on a per capital basis, of what Americans give.

Large-scale giving was brought to the fore by last June's "billionaire's challenge," in which Warren Buffett and Bill Gates led a group of 40 U.S. billionaires in pledging half their fortunes to charity. While they travelled to China for a much publicized dinner with billionaires there, we haven't seen this concept widely embraced in other countries.

In part, that's because the U.S. tradition of visible giving is in sharp contrast to most other countries, rooted in the uniquely American culture of high-profile philanthropy established by early 20th century American tycoons such as John Rockefeller and Andrew Carnegie.

A tradition of quiet giving

Until recently Canada had a tradition of "quiet giving," in which many donors preferred anonymity.

In addition, there was a wide view among charities that Canada's "old money elite" wasn't stepping up to the extent seen in the United States. Indeed, after a record $40-million gift in 2000 to the Hamilton Community Foundation by a woman who had received a windfall after investing in her nephew's tech startup, one editorial writer challenged Canada's Establishment to rise to her example.

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Over the past 10 years, this has all changed. Organizations such as Toronto's Princess Margaret Hospital have innovated with massively successful weekend walks and bike rides. The "make the world a better place" ethos is becoming increasingly more important across all ages – young people especially are looking to work for companies they see as socially responsible.

As part of this change, hospitals and universities across Canada have tapped successful entrepreneurs who've lent their names to causes and to buildings. While a tax change that makes donating securities more attractive contributed to this, there have also been some broader cultural forces at work.

New rules for giving

Corporate giving has been in decline for the past decade, with the result that Canada's growth in charitable giving has been fuelled by "mega-gifts." Marnie Spears heads up KCI, Canada's leading consultancy for philanthropy. We recently discussed four big changes for organizations seeking large gifts.

First, anyone seeking serious money needs a sharp, relevant case. While relationships with donors still matter, you have to demonstrate a compelling need.

Next, Canadians are following U.S. givers in demanding better measurement of the impact of gifts and accountability for results.

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Thirdly, there has been a dramatic evolution in expectations around recognition. More and more today, recognition and visibility for large gifts are givens.

Finally, a new generation of donors has arrived on the scene, from diverse backgrounds and with varying interests. Successful campaigns can no longer rely on tapping into "old money"; rather they need to engage newer donors with different needs and agendas.

And it's not just individual giving that's changed – more and more companies are looking to integrate charitable giving into their corporate brand. The "old boys' club" days of getting a large corporate gift because you golf with the CEO are gone forever.

In industry after industry, the old rules no longer apply and there's a new formula for success. That's obviously true of high-profile businesses such as technology, automobiles and newspapers. And it's equally true when securing large charitable gifts – in this instance as in so many others, either you adapt to today's new reality or you get left behind.

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About the Author
Dan Richards

Dan Richards is a 20-year veteran of the investment industry and a faculty member in the MBA program at the University of Toronto’s Rotman School of Management. He has served as CEO of a major distribution firm with 3,500 financial advisors and is an expert on sentiment among Canadian investors. More

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