Philanthropy practised by Canadian women is on the rise. As a financial advisor, you can play a strategic role in this trend by being aware of high net-worth women clients’ personal values and by understanding the level of due diligence these clients seek.
Women are less likely to write a cheque to a charity than men are, says Jo-Anne Ryan, vice president, philanthropic advisory services, with TD Waterhouse Canada Inc., the brokerage arm of Toronto-Dominion Bank (TD).”Relationships are important to [women],” Ryan says, noting that many women who are considering a philanthropic gift will volunteer with a charity first as a means of getting to know the people who work there and how the charity operates.
Ryan cites Time, Treasure, Talent: Canadian Women and Philanthropy, a report based on research conducted for TD by Investor Economics Ltd. of Toronto. According to the report, Canadian women controlled about $1.1 trillion of household financial assets at the end of 2012. That figure is likely to reach $3 trillion by 2020. And women’s growing philanthropic activity means a large portion of that wealth will be directed toward charitable causes.
In short, says Ryan, it’s time to look at women as philanthropists and ensure that they get the planning they need. Changes are needed in the way advisors relate to women clients and in the way advisors view their books of business.
The TD report confirms the long-held view that women approach financial decision-making differently than men. “A lot of men don’t want to know what women want to know,” says Mary Tidlund of Canmore, Alta., a former oil and gas CEO who runs the Mary A. Tidlund Charitable Foundation and helps to design and fund education and health-related projects around the world.
“It takes time to talk to women,” says Tidlund. For example, women usually will conduct more due diligence before and after making a charitable gift. Women typically will take the time to review financial statements and seek discussions with board members, management and volunteers. Women also will review their philanthropic plan regularly to measure its impact.
That’s where advisors come in. Women are looking for sources of qualified, objective advice that can assist them in developing their giving strategies, Ryan says. You should create financial plans that include charitable giving. All clients want to know that they have enough to live on; then, they can see what they can give to charity in an effective manner.
The TD/Investor Economics research found that while tax-efficient giving is important, it is not the main determinant in philanthropic giving.
You should have an understanding of several techniques for charitable giving, One of the most common techniques is to set up a private charitable foundation or give via a donor-advised fund in a private giving foundation, such as the foundation run by TD and other financial services institutions. (Most financial services institutions will set up a donor-advised fund for clients.)
Other strategies include: charitable remainder trusts; charitable gift annuities; life insurance; certified cultural property (works of art and other culturally significant items); securities; and bequests.
For women, the choice of charity can be very personal. It might involve a charity that directs money for research into a disease that has touched the client’s family. Or the strategy may mean giving back to the client’s community through a local charity.
Women clients often want to involve their families in the choice of charity, as well as involve family members in ongoing giving as a way of passing on family values. For you, this characteristic can present an opportunity to form relationships with your client and her family members.
Strengthening these relationships also means showing support to your clients, says Susan Latremoille, director of wealth management with the Latremoille Group, in Toronto, which operates under the Richardson GMP Ltd. banner.
As an advisor, you should “walk the walk,” Latremoille says, by showing your own philanthropic stripes. Attend an event put on by your client’s favourite charity, volunteer or indicate that you support certain charities.
Helping your clients discover their passions and donate wisely inevitably will mean part of the assets in your book will go to the intended charity. And it would be a mistake to balk at providing strategic philanthropic advice for fear it will create a drain on your assets, says Latremoille: “As a trusted advisor, you are supposed to be thinking of your client’s interest, not your own. [If you discourage philanthropy], sooner or later the client will see through that and move elsewhere.”
Ask your clients about their investments, estate plans and insurance. “Philanthropy is just another part of the puzzle,” Latremoille says. It’s not the charitable cause that takes time, she adds; it’s providing the proper giving structure.
Some women look for strategic advice during important life transitions, such as divorce or the sale of a business. Ruth Mandel, a business owner in Toronto, worked to protect her assets in the wake of her divorce. She also had a greater goal in mind: directing her own charitable-giving strategy.
Mandel has established a donor-advised fund with TD’s Private Giving Foundation. Mandel, a motorcycle enthusiast, found a way to link her passion with her philanthropy. She provides the Tidlund Foundation with funding for motorcycles used by local medical workers and educators in Africa.
Mandel’s case suggests another way you can play a role in assisting women philanthropists, says Latremoille: “Help them discover their passion.”
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