Tax incentives are not the main driver for increased giving
Canadian women’s growing share of wealth is prompting them to increase the amount they give to good causes.
A new report from TD Wealth shows that female philanthropy almost tripled in dollar value terms in the decade from 2011 to 2021, rising from $1.5 billion $4.3 billion.
The figure is set to rise further to near $6 billion by 2030 as women inherit an estimated $1 trillion over the next decade with 40% of the growth in total wealth controlled by women between 2020 and 2030 represented by inter-family transfers, such as divorce settlements and inheritances.
While the Trust and Transformation: Canadian Women and Philanthropy report data is based on donations in tax filings, these generous women are not driven by tax incentives, rather by trust which determines how much they give and to whom.
Female philanthropists will conduct due diligence before making donations to ensure that their money is going to an organization with robust governance and gain a strong understanding of its work.
"Before donating, women tend to do more extensive diligence than men. Women seek counsel from family and friends in making charitable giving decisions and they are also influenced by family experiences, social awareness, and growth in financial resources,” said Jo-Anne Ryan, VP of Philanthropic Advisory Services at TD Wealth. “They also volunteer their time as a way to gain a better understanding of the charity's work and establish relationships with key management personnel before providing any financial support.”
Ryan added that women are a vital component in the strength of Canada’s charitable sector.
"Without women, the almost 86,000 Canadian charities would simply not function. Not only do they provide much-needed funding and a cadre of volunteers, but women participating in the sector are increasingly driving systemic change,” she said.
Generational focus
The report found that younger Canadian women tend to be more focused on the future and will prioritize donations to organizations that improve historical and emerging inequities.
Older women are more likely to focus their giving on the charities and causes that their family has always supported.
Overall, mental health, medical research and support, and climate change and environment are the top areas of interest for female philanthropists.
Younger women were also found to be more willing to self-identify as philanthropists, and the emergence of women in leadership positions and as role models has encouraged young women to step forward as volunteers, fundraisers, and funders.
There is also a growing trend in women become ‘social entrepreneurs’ by incorporating doing good into their business plans.
"They are propelled to help others through a sense of social responsibility and a belief that everyone who is able should set aside some time, effort, and personal resources to help build a community that is just and equitable," said Ryan. "Women have a greater capacity to give than ever, and it's important that Canadian charities of all types and sizes demonstrate their relevance and positive impact on those they serve."
Women are more likely to respond to current events and humanitarian crises, such as the negative impact of inflation on housing and food security, and environmental disasters associated with climate change in Canada.
Getting advice
"As women's influence over wealth in Canada continues to increase, it's important to recognize that just as we plan for our financial future and retirement, having a philanthropic plan is equally important," concluded Ryan. "Talking with an advisor to discuss your philanthropic goals and strategies is an essential step toward making a meaningful and lasting impact on the causes you care about - whether it's advice on how philanthropy fits into your overall financial strategy or support establishing a structure to leave a legacy, such as private foundations or donor-advised funds. We always do better with a plan, and this holds true for our philanthropic endeavors as well."
