Advisors are often asked an important financial planning question by clients when it comes to portfolio longevity: How long will my wealth last into retirement? Do I have enough to live the lifestyle I want well into my golden years? Will my money run out before I pass away, and if not, will I have a nest egg to leave behind for my loved ones? The same kinds of longevity-focused questions are raised when it comes to a family foundation at Canada Gives.
We’re often asked to estimate how long our donor clients’ Foundation accounts (also known as a donor advised fund) will last based on a number of financial assumptions. The simple reason is that our philanthropists are deeply committed to making a major impact in their areas of charitable interest. They want to not only support or work with their preferred charities or non-profit organizations, but are passionate about providing those organizations with a reliable source of funding for as long as possible.
This is one of the key benefits of a Canada Gives Foundation account. It not only offers a philanthropist and their family a tax-effective, administration-free way to give back, but our Client Services team can help to set up long-term gifting agreements that grant funds to one or more qualified donees over time in a very strategic way. That’s particularly beneficial when charities or non-profits establish support programs that require consistent, stable funding—as most do. These kinds of gift agreements also create opportunities to better track the impact of these initiatives over time.
That’s exactly the measurable change that our donor clients hope to create with their work. In addition, gift agreements help philanthropists become more strategic, proactive and less ad hoc in their giving.
Introducing our new Foundation account calculator
Our team is always looking for new ways to innovate and provide the tools that our Foundation families need to enhance their charitable giving. That’s why we developed the new ‘How Long Will My Foundation Last Calculator,’ the latest feature added to our Donor Portal.
The calculator empowers our donor clients to assess various gifting scenarios using several criteria including:
- Their starting foundation size (in dollars)
- The annual rate of return when their Foundation account portfolio is managed over time (either by their advisor or Canada Gives)
- The annual disbursement to charities
The calculator will then estimate the number of years before their Foundation account is fully depleted. Having that timeline in hand allows our philanthropists to establish a grant disbursement plan that aligns with their giving goals. Some may be comfortable spending down their Foundation account in a decade or less. Others may wish to stretch that timeline well into their senior years to maximize the joy they experience from making such a profound difference with their generosity. Others, still, may want to extend the longevity of their Foundation account to pass it along to the next generation, making charitable giving an enduring part of their family legacy long after their passing.
An advantage for financial advisors
The ‘How Long Will My Foundation Last Calculator’ is also an important tool that financial advisors and portfolio managers can leverage to help their philanthropic clients develop structured wealth-management strategies that put charitable giving at the forefront. Doing so helps to put purpose behind clients’ wealth, while delivering flexibility and potentially broadening the scope of available tax and estate planning strategies.
Advisors can use the calculator to estimate necessary portfolio investment returns to keep a Foundation account funded over time. They can then build an investment strategy in accordance with their clients’ philanthropic goals. By helping them create a lasting impact in their lifetime, or to support a legacy of giving for the next generation, the advisor can provide a more comprehensive service offering and deliver wealth-management approaches that fully align with their clients’ change-making objectives.
To learn more about our new calculator feature, contact a member of our Client Services team today.
The Canada Gives Team