Wealthy clients give to charity because they believe in the value of philanthropy, says a BMO Harris survey, but their advisors think the donations are motivated by tax savings.
The majority (91%) of Canadians with more than $1,000,000 in investable assets have given to charitable causes in the past 12 months, and 74% say they’ve donated up to $10,000.
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More than half (55%) of wealthy people say they’re driven to donate because they’d like to have an impact on their communities. And:
- 32% feel passionate about a cause;
- 23% feel they should share their wealth with others;
- 21% want to reduce taxes.
But when the survey asked advisors about their clients’ motivations, many financial advisors put too much importance on tax savings and creating a family legacy.
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Along with motivations, the report found that affluent Canadians also have hesitations around charitable giving. Among the concerns cited around giving, 43% were worried their gifts might not be used wisely by the receiving organization, and 26% feared receiving an increase in donation requests as a result of their gift.
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Motivations for giving
Financial Advisors | High Net Worth Individuals | |
To impact community/world | 65% | 55% |
Passionate about a cause | 64% | 32% |
To reduce taxes | 63% | 21% |
To give back | 62% | 50% |
Religious or spiritual | 51% | 21% |
To create a family legacy | 34% | 4% |
To start/continue a tradition of family giving | 26% | 18% |
To encourage children/future generations | 21% | 11% |
Were asked by someone | 17% | 14% |
To fulfill an obligation of wealth | 17% | 23% |
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Hesitations for Giving
Financial Advisors | High Net Worth Individuals | |
Haven’t yet explored their philanthropic passions | 49% | 8% |
Lack knowledge or connection to charities | 41% | 10% |
Have no tradition of family giving | 38% | 3% |
Don’t have enough money for heirs | 28% | 6% |
Have not been asked | 26% | 5% |
Think gifts won’t be used wisely | 26% | 43% |
Don’t have enough money for self | 25% | 11% |
Not wealthy enough | 24% | 16% |
Fear an increase in donation requests | 16% | 26% |