The COVID-19 pandemic has changed everything, including the ways charities can support vulnerable communities who have been hit hardest. Jo-Anne Ryan, VP of Philanthropic Services, TD Wealth, and Executive Director of the Private Giving Foundation, joins Kim Parlee to talk about how charities are adapting and some ways donors can make a big impact right now.
Print Transcript
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- As we all know, COVID-19 has changed everything. But the hardships that some people feel have not been distributed equally. And the social safety nets that support people who need them have also been hit hard, which is a troubling combination. Here to give her take on what is happening with the charitable sector and what certain donors are doing, Jo-Anne Ryan. She's executive director of the Private Giving Foundation and Vice President of Philanthropic Advisory Services at TD Wealth.
Jo-Anne, it's always great to have you here. And I wonder if you could just set the context first. From people I've spoken with, it seems as though what's going on is charities are seeing a demand for their services like never before. And then they're seeing their revenues drop at the same time, which is a bad combination.
- Thanks for having me, Kim. Yes, the charities have been really hit hard by the pandemic, especially the ones that rely on large gatherings of people for events. For galas, golf tournaments, walks, runs, rides. Those events have all been canceled. A couple of them have gone virtual with a little bit of success, but not too much. And yes, the demand for services has increased for a lot of charities, particularly food banks, shelters, any charity helping the homeless. People have lost jobs. And really, the demand for services for a number of charities has really increased. Charities are asking donors, who usually like to support a particular project, to consider donating unrestricted funds so that they have the ability to apply those funds where most needed. And it could be operating cost, and it actually could be salaries to avoid having to lay people off. So it's been tough out there.
- Tell me what you're hearing from donors. I hear the fundraising is down for obvious reasons-- with physical distancing, you can't do stuff-- but I know you deal with so many donors. What do you say?
- Well, some donors are actually doing quite well. In fact, the very wealthy are having trouble spending money during the pandemic because they're stuck at home or at their cottages. And we're seeing a lot of generosity. We're seeing, even with a donor-advised fund program, with the Private Giving Foundation, we're seeing new people, new accounts being opened, people adding to their accounts. We're seeing donors be very thoughtful about their giving. They're giving perhaps to organizations that they have never supported in the past. They recognize that we're in a pandemic, and we're in a crisis. And they definitely want to help.
We're also seeing an increase in donors giving outside of Canada, because this is, as you know, a global pandemic, and they want to help. So we actually-- I worked with one donor that sent money to a hospital foundation in Italy for PPE when they were in desperate need. We have another donor who spends the winters in Florida, and was quite concerned about migrant farm workers and the conditions they were working in, and funded a project to give them clean water, sanitation, and better working environment. So we're working with donors who very, very much care and want to help.
- Can I ask you, and I would expect, I know that many people I've spoken with, we know a lot of time is being spent on making sure that your estate is in place, that your will is up to date. With that, are you seeing more people make sure they're getting something into their will around the charitable giving side?
- Absolutely. So we are working with people who are updating their will, and many of those people want to leave a charitable bequest in their will, which is a great opportunity to really maximize your charitable legacy. We're also seeing people who are designating charities as beneficiaries of registered plans, and that's a great way to offset the tax on those plans when the money comes out. And during the pandemic, we've seen a lot of people use life insurance. And it could be an existing policy that you have that you no longer need. Perhaps you purchased it before you were financially successful, or you had dependents who are no longer dependents. And so you can actually get a valuation done through that policy and donate it to charity. You get a tax receipt for the value, and the charity gets the proceeds of the policy upon your passing. And we've even had some new policies purchased with, in our case, the Private Giving Foundation, as the owner and beneficiary. And you actually get a tax receipt for the premiums that you pay each year. So it's very tax-efficient.
- I know that you and I have spoken before and done some work with that CanadaHelps. And they've got something, I understand, pretty interesting, where you can give to a cause, not just to a specific charity. It's more cause-focused on that side of things.
- Yeah, they do have some cause funds, and we're seeing that popular, especially with millennials. They may not want to align themselves with one specific charity, but they know that they care about the environment, or they care about gender equality, or race. And so they set up these funds where you can make the donation, and CanadaHelps does the research and basically outlines and finds a number of different charities that are doing work in those areas. So it's another alternative in terms of your charitable giving to support a cause, as opposed to a specific charity.
- Jo-Anne, before we let you go, I know you've got three tactics people need to keep in mind if they're listening and they have the money, they've done well in the markets, they may want to think about. But the first one is there's a deadline coming.
- Yeah, December 31 is the deadline, and it's the deadline that you can make a donation that can be claimed in this calendar year. So you need to start planning, that's number one.
If you have appreciated securities, publicly traded securities that have gone up in value, you're always better off donating those securities, because you'll get the tax receipt for the market value, and you will eliminate the capital gains tax. And even if you think there's upside potential with that security, you can always buy it back, and then you've just stepped up your cost to the new market value.
And, finally, consider a donor-advised fund if you're not quite sure what charity to give to. So when you donate to a donor-advised fund, you get the tax receipt up front and then you can decide later. You can thoughtfully plan what that legacy is going to look like, and which charities are going to benefit. So it's a great way to get the tax receipt and buy you some time to determine how you want those funds distributed.
- Jo-Anne, it's always valuable talking to you. Thanks so much.
- Thanks for having me, Kim.
[MUSIC PLAYING]
- As we all know, COVID-19 has changed everything. But the hardships that some people feel have not been distributed equally. And the social safety nets that support people who need them have also been hit hard, which is a troubling combination. Here to give her take on what is happening with the charitable sector and what certain donors are doing, Jo-Anne Ryan. She's executive director of the Private Giving Foundation and Vice President of Philanthropic Advisory Services at TD Wealth.
Jo-Anne, it's always great to have you here. And I wonder if you could just set the context first. From people I've spoken with, it seems as though what's going on is charities are seeing a demand for their services like never before. And then they're seeing their revenues drop at the same time, which is a bad combination.
- Thanks for having me, Kim. Yes, the charities have been really hit hard by the pandemic, especially the ones that rely on large gatherings of people for events. For galas, golf tournaments, walks, runs, rides. Those events have all been canceled. A couple of them have gone virtual with a little bit of success, but not too much. And yes, the demand for services has increased for a lot of charities, particularly food banks, shelters, any charity helping the homeless. People have lost jobs. And really, the demand for services for a number of charities has really increased. Charities are asking donors, who usually like to support a particular project, to consider donating unrestricted funds so that they have the ability to apply those funds where most needed. And it could be operating cost, and it actually could be salaries to avoid having to lay people off. So it's been tough out there.
- Tell me what you're hearing from donors. I hear the fundraising is down for obvious reasons-- with physical distancing, you can't do stuff-- but I know you deal with so many donors. What do you say?
- Well, some donors are actually doing quite well. In fact, the very wealthy are having trouble spending money during the pandemic because they're stuck at home or at their cottages. And we're seeing a lot of generosity. We're seeing, even with a donor-advised fund program, with the Private Giving Foundation, we're seeing new people, new accounts being opened, people adding to their accounts. We're seeing donors be very thoughtful about their giving. They're giving perhaps to organizations that they have never supported in the past. They recognize that we're in a pandemic, and we're in a crisis. And they definitely want to help.
We're also seeing an increase in donors giving outside of Canada, because this is, as you know, a global pandemic, and they want to help. So we actually-- I worked with one donor that sent money to a hospital foundation in Italy for PPE when they were in desperate need. We have another donor who spends the winters in Florida, and was quite concerned about migrant farm workers and the conditions they were working in, and funded a project to give them clean water, sanitation, and better working environment. So we're working with donors who very, very much care and want to help.
- Can I ask you, and I would expect, I know that many people I've spoken with, we know a lot of time is being spent on making sure that your estate is in place, that your will is up to date. With that, are you seeing more people make sure they're getting something into their will around the charitable giving side?
- Absolutely. So we are working with people who are updating their will, and many of those people want to leave a charitable bequest in their will, which is a great opportunity to really maximize your charitable legacy. We're also seeing people who are designating charities as beneficiaries of registered plans, and that's a great way to offset the tax on those plans when the money comes out. And during the pandemic, we've seen a lot of people use life insurance. And it could be an existing policy that you have that you no longer need. Perhaps you purchased it before you were financially successful, or you had dependents who are no longer dependents. And so you can actually get a valuation done through that policy and donate it to charity. You get a tax receipt for the value, and the charity gets the proceeds of the policy upon your passing. And we've even had some new policies purchased with, in our case, the Private Giving Foundation, as the owner and beneficiary. And you actually get a tax receipt for the premiums that you pay each year. So it's very tax-efficient.
- I know that you and I have spoken before and done some work with that CanadaHelps. And they've got something, I understand, pretty interesting, where you can give to a cause, not just to a specific charity. It's more cause-focused on that side of things.
- Yeah, they do have some cause funds, and we're seeing that popular, especially with millennials. They may not want to align themselves with one specific charity, but they know that they care about the environment, or they care about gender equality, or race. And so they set up these funds where you can make the donation, and CanadaHelps does the research and basically outlines and finds a number of different charities that are doing work in those areas. So it's another alternative in terms of your charitable giving to support a cause, as opposed to a specific charity.
- Jo-Anne, before we let you go, I know you've got three tactics people need to keep in mind if they're listening and they have the money, they've done well in the markets, they may want to think about. But the first one is there's a deadline coming.
- Yeah, December 31 is the deadline, and it's the deadline that you can make a donation that can be claimed in this calendar year. So you need to start planning, that's number one.
If you have appreciated securities, publicly traded securities that have gone up in value, you're always better off donating those securities, because you'll get the tax receipt for the market value, and you will eliminate the capital gains tax. And even if you think there's upside potential with that security, you can always buy it back, and then you've just stepped up your cost to the new market value.
And, finally, consider a donor-advised fund if you're not quite sure what charity to give to. So when you donate to a donor-advised fund, you get the tax receipt up front and then you can decide later. You can thoughtfully plan what that legacy is going to look like, and which charities are going to benefit. So it's a great way to get the tax receipt and buy you some time to determine how you want those funds distributed.
- Jo-Anne, it's always valuable talking to you. Thanks so much.
- Thanks for having me, Kim.
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