By Leanne Kaufman
Many Canadians have charitable intentions. In my role, we are seeing a significant increase in clients wanting to learn more about how they can be strategic in their charitable giving in life and in their estates. They not only want to develop a philanthropic strategy, but they are also interested in using a variety of charitable structures to allow them to see their charitable impact today and elongated across generations.
In addition to direct gifts to charity, clients are increasingly turning to options like donor-advised funds (DAFs), private foundations, and even charitable remainder trusts to leave their legacy. These giving vehicles offer more ways to streamline their giving over a longer period, and with potentially positive tax implications.
Canadians want to give
A couple of years ago, RBC Royal Trust commissioned an Ipsos survey on estate planning. From that survey we learned that Canadians are prioritizing charitable giving, are open to diverse strategies of how and when to give and that there’s a notable interest in philanthropy among younger Canadians.
When Canadians are in the moment of creating their Wills, many are choosing to give. Some may have clear and defined charitable intentions but most would benefit from help with planning their giving strategy most effectively.
While giving directly to a charity continues to be the most well-known option, indirect giving vehicles, which offer a variety of managed philanthropic options for potential donors, are becoming increasingly popular as they allow donors to build a philanthropic strategy for their own legacy, and that of their family.
Some of the most common giving vehicles
Donor-advised funds
From what we are hearing when talking to our clients, DAFs are one of the most popular indirect giving vehicles because they offer peace of mind that their charitable intentions and legacy will be carried out according to their wishes, all while being professionally administered.
When a donor chooses to give through a DAF, they can submit grant recommendations through their advisor to the public foundation for the charities they would like to support. Donations into a DAF can be in the form of money or other types of assets, such as publicly traded shares or life insurance. DAFs allow the donor the flexibility to customize their giving for the immediate, interim and longer term — meaning the funds can be distributed to specific charities based on the donors’ grant recommendation legacy wishes.
Donors like DAFs because of their flexibility and the ease with which an individual, family or estate can establish and contribute to one without the time or costs that a private foundation requires. DAFs can be established at a public foundation, which takes care of the administration over the fund’s lifetime. Donors can also contribute to the fund as often as they choose after the initial donation, including in tandem to planned direct gifts in life or bequeathed in their Will.
Donors appreciate DAFs as a giving strategy because they can continue to have conversations with their charities of choice about what programs they want their funds to support. Because passions can change over time, they also have the continued ability to define where their donations go, without having to change their Will or incur legal costs to do so. It’s as simple as updating their charitable recommendations with their investment advisor or with the public foundation directly.
Private foundations
Private foundations are perhaps more well-known than DAFs and have always been a popular choice for high-net-worth and affluent families. Although they may require more hands-on administration by donors, private foundations offer a way to create a family legacy through charitable giving now and into the future, but perhaps in a more bespoke and customized way than a DAF may typically offer.
Families or individuals typically create private foundations with larger gifts, with the option to add to the foundation at any time. They give donors control over how their money is distributed without the need to undertake charitable work directly, and they can be administered by the donors themselves or with a third-party organization.
Charitable remainder trusts
A third solution for indirect giving is the charitable remainder trust. These giving vehicles allow the income generated on the capital of a donation to be used throughout a person’s lifetime, while providing for the residual interest from the trust upon death to be designated to a specific charity or charities. Instead of a board of directors (like a private foundation), the trust decision-makers are the named trustees, or their successors over time.
Talk to your donors
Ultimately, Canadians want to give, and they have a wealth of choices for doing so. Chances are your donors are open to having conversations about legacy giving and strategic philanthropy. They may be open to learning more about how they can include DAFs or private foundations in their charitable planning and how they can include your charity as a grantee recipient within that existing DAF or private foundation. This gives charities an enormous opportunity to engage with donors to help them to plan for and potentially elongate their philanthropic impact and legacy. Consider finding out what the programmatic interest is for donors and targeting conversations to customize giving and impact of their gift. These conversations will help your donors customize their plan to fulfil their intentions and support your charity further.
Leanne Kaufman is the President and CEO of the Royal Trust Corporation of Canada and The Royal Trust Company. She writes this column exclusively for each issue of Foundation Magazine. RBC Royal Trust refers to either or both of the Royal Trust Corporation of Canada and or The Royal Trust Company. RBC Royal Trust and RBC Wealth Management are business segments of the Royal Bank of Canada. Please click this link www.rbc.com/legal/ for further information on the entities that are member companies of RBC Wealth Management. The Companies and the Royal Bank of Canada do not endorse or recommend any information, content or services offered on any third-party website. The content in this publication is provided for general information only and is not intended to provide any advice or endorse/recommend the content contained in the publication. Readers should consult their own professional advisor when planning to implement a strategy to ensure that individual circumstances have been considered properly and it is based on the latest available information. ®/TM Trademark(s) of Royal Bank of Canada. RBC and Royal Trust are registered trademarks of Royal Bank of Canada. Used under license. © Royal Bank of Canada 2025. All rights reserved.
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