Country Reports: North America

Members of the Miller Thomson firm recently attended the annual conference of the Canadian Association of Gift Planners ("CAGP") in Halifax. To close the conference, Frank Minton, a leader in the gift planning field in North America spoke about recent trends in charitable giving. This article shares these trends with you.

There has been an increase in the size of the donations given to charities; however, the percentage of individuals in Canada filing tax returns and claiming donations in their tax returns claiming credits for the charitable donations has decreased from 25.9% of the tax filers in 1990 to 20.9% in 1999.
There has been a significant increase in gifts of listed public securities over the past couple of years. This is not surprising given the very beneficial tax credit available under the Income Tax Act (Canada) in respect of such gifts.
There has been a marked growth in international grant making by American foundations. Under the Internal Revenue Code an American registered charity is permitted to make donations to foreign charities not otherwise registered in the United States. Canadian charities should look to sister or similar charities when fundraising.
There has been a decrease in the use in Canada of the private foundation. This is not surprising given the relatively unattractive environment for private foundations under the Canadian tax legislation.
There has been an increase in "Gift Funds" which are being used in the United States as a replacement for private charities.
There has been a marked increase in the use of "Advised Funds". Such funds are like endowments but they are completed through a community foundation or any other type of charity; they allow a donor to give to the charity and other charities and to provide input and advice in the fund over time.
Investment policies for foundations and endowment funds reflect a total return on an investment type policy which focuses on preserving the funds and the cashflow for the charity. The CAGP would like to see amendments to the Canadian rules which would allow for the implementation of a true "total" return policy form of investing.
There is an increase in the role of the allied professional in planned giving. This is not surprising. As more allied professionals become aware of the role of planned giving in charities and in estate planning, the allied professional can be a useful source of donors for the charity over time.
It continues to be the fact that bequests are the primary source of donor gifts and planned gifts of any significance to charities. Statistics show that most gifts to charities come from wills which have been revised or drafted within five (5) years of the date of death. A subset statistic in this category is that 85% of the gifts which are made to charities through wills are not known to the charity until the death of the individual.
The internet and enhanced computer technology is becoming a more important tool for charitable giving. This trend is expected to continue.

* Susan M. Manwaring is partner and the Chair of the Charities and Not-for-Profit practice group in Miller Thomson LLP, Toronto Canada. She can be reached at 416.595.8583 or smanwari@millerthomson.ca. This article was first published in the Summer 2001 issue of the Miller Thomson LLP Charities and Not-for-Profit Newsletter. The Newsletter is available from the firm.

The International Journal
of Not-for-Profit Law

Volume 4, Issue 1, September 2001

A quarterly publication of the International Center for Not-for-Profit Law

Table of Contents