The Freedom of Flexible Philanthropy
Donor-Advised Gifting Funds
When a healthy tax refund and an inheritance left Bert and Sue Johnson* with extra money in their chequing account, they wanted to use it to do some good in the world. They were excited about giving to charity, but they were so busy they didn’t immediately have the time to decide how and where they wanted to donate. The Johnsons’ financial advisor suggested the possibility of a private foundation or a donor-advised fund but having never dealt with distributing a large donation, the couple felt out of their depth. When a relative mentioned using Abundance Canada’s services to manage their charitable giving, Sue and Bert called our offices for more information.
A Flexible Giving Solution
When I met with them in my office, Bert and Sue explained that they would like to transfer monies to a gifting fund right away but needed more time to make sure they chose the right recipient for their donation. As a busy couple balancing successful careers and family life, the Johnsons didn’t have a lot of margin in their lives to manage complex details for their charitable giving. They were very pleased to learn that our Flexible Gifting Fund (a donor advised fund (DAF)) would give them the flexibility they were seeking, and that we would take care of the details, so they could focus on the fun of being generous.
A DAF is a popular alternative to setting up a private or family foundation. Donors establish their DAF with an initial charitable deposit and receive an immediate donation tax receipt. With Abundance Canada, donors can recommend where money from the fund is distributed to charities over time.
The Johnsons liked that they wouldn’t be locked into making any hasty decisions about where to give. They could even supplement their initial deposit with regular cash contributions or by donating in-kind appreciated securities from a non-registered investment account. Over the coming months and years, they would be able to recommend which organizations they wanted to give to, how much they wanted to give to each one, and when they wanted to make their gift. The Flexible Gifting Fund with Abundance Canada was just what they were looking for.
Flexibility for Future Giving
Bert and Sue started their gifting fund as a practical reflection of their gratitude for the financial windfall they had received; they wanted it to have an enduring impact on the world around them. The Johnsons immediately set aside the money that they wanted to give away and together we created a customized giving plan. They were grateful for a solution that worked with their current needs, but Bert and Sue also found themselves thinking of the future. What if their preferred charities and financial position changed? Would their giving plan be able to grow with them as they got older?
I was happy to assure them that as their outlook and needs change, the gifting fund will flex to keep up with their plans. Sue and Bert would be able to make deposits into the account whenever money was abundant, and like the initial gift, they could take their time to decide where and when to give. They could add new charities or change the allocation of their giving at any time. Furthermore, they could invest the money in their gifting fund through Abundance’s Income and/or Equity investment pool options in the hopes of amplifying their giving even more. When we finished our conversation, the Johnsons were quite excited to get their giving started. It was a joy to set up their gifting fund.
The Freedom to Give Their Own way
At first, Bert and Sue were concerned that giving through their gifting fund might feel impersonal, however they soon discovered it not only made their giving easy but it allowed them as much interaction as they wanted. They hand-delivered the cheques from their fund directly to two of the charities they were excited to support and had a chance to honour and nurture the relationships they had developed with those organizations. At the same time, their gifting fund also allowed them to make an anonymous donation to a charity where Bert sat on the board of directors. They really appreciated the freedom to decide how to give each gift.
A few months after we set up their gifting fund, Bert and Sue called and asked to meet with me again. They were having a ball being generous together. Both the fund and Abundance Canada were a great fit. However, they were concerned that while their gifting fund helped them to give during their lifetime, their generosity would end when they passed away. So, Bert and Sue decided to complement their DAF with a structured charitable gift through their will.
It is a joy to help people like the Johnsons get creative with their generosity, and I love the flexibility and personal participation they get with an Abundance gifting fund. Are you looking for a flexible gifting solution that can grow with you? Why not explore setting up your own Flexible Gifting Fund today.
*Pseudonym used to protect client privacy
Contributed by Marlow Gingerich
Gift Planning Consultant