Combining philanthropy with a broader investing and financial management plan has proven to be a popular option for clients of Mackenzie Investments. Since the creation of the Mackenzie Charitable Giving Program 10 years ago, the number of donor accounts has risen to more than 1,000 and the value of the charitable assets managed by the program has grown to $100-million.
Mackenzie launched the program to respond to the growing number of clients who sought financial advice on how to manage their charitable donations and on how they could implement a long-term philanthropy strategy, says Carol Bezaire, the Toronto-based firm's vice-president, tax, estate and strategic philanthropy.
"The demand for long-term charitable giving was growing," she says. "It was clear that we needed a mechanism to allow advisers and their clients to work together on the charitable giving component and incorporate all of that into clients' overall financial, tax and estate planning."
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. This type of investment is called a donor-advised fund because the donor and the adviser advise on both the investments used for the donated funds and the charities that the donor's foundation account will support.
Having this program provides the client with the opportunity to have their own philanthropic foundation without the cost and complexities of running it.
Donors receive many benefits from managing their charitable giving this way, says Ms. Bezaire.
"It is flexible for donors," she adds. "They can direct us on where they want the money to be flowed every year – and they can choose one or multiple charities."
Other client benefits include the fact that Mackenzie handles all administrative matters, including record-keeping, tax reporting and issuing cheques. In addition, participants can get immediate tax savings with one donation receipt.
Having this support simplifies the charitable giving process for those who find it onerous, Ms. Bezaire says. "It is very helpful for many of our older clients who have been philanthropic all their life," she 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."
Investors can make regular giving a part of their financial plan and watch their philanthropic assets grow over time, as their donations are invested in any of 15 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. They may also want to continue the donations through future generations as part of their estate planning – creating a philanthropic legacy.
Mackenzie expects demand for this type of investment to continue to grow, as the most senior Canadians transfer their wealth to baby boomers.
"Many Canadians want to share their wealth with charitable organizations and support causes they care about," Ms. Bezaire says. "Our Charitable Giving Program gives them the chance to make a stronger and more lasting impact with their generosity."
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