Press Release
How to live forever: It's not as hard as you think
November 12, 2003 Ottawa Citizen ~ E1 Charitable Giving Insert
When Elizabeth Orton and Michael Cox donate to charity they want their gifts to last forever, rather than for a year or two. The Community Foundation of Ottawa is among local organizations that make it possible.
Nick Carrigall, The Ottawa Citizen
Elizabeth Orton and Michael Cox with their two daughters
The 15-year-old foundation is an independent centre for community philanthropy that serves as a resource for addressing issues and connecting donors with granting opportunities. Its role is to attract and manage a growing endowment, the invested earnings of which provide grants used to enhance the quality of life for charities in the region.
The foundation gratefully accepts donations of cash, stocks and real estate, as well as bequests from wills. Non-cash assets are immediately liquidated and placed in an investment portfolio. Four and a half per cent of the money earned by the fund is disbursed annually to charity and 1.5 per cent is for administration fees. The remainder is returned to donors' capital to protect it against inflation and grow the pot of money.
To date, Ms. Orton and Mr. Cox, the parents of two young children, have donated about $3,500; once their pool of money reaches $5,000 - likely within two years - the foundation will begin disbursing 4.5 per cent of its earnings every year to charity.
"We like the philosophy that our gift is there permanently," says Ms. Orton, who is manager of member services for the Community Foundations of Canada, an umbrella group for local organizations such as Ottawa's community foundation. "The interest it earns will be given out forever. It will go and on, rather than being given out in one year."
The couple has yet to determine where their donations will end up and may leave that in the hands of the foundation "because they have a good grasp on the needs of the community," says Ms. Orton.
Bibi Patel, director of development and donor services for the foundation says the organization has $66 million in total assets and over the past 10 years has earned an average return of about 10 per cent. In the past year, more than 90 per cent of new gifts were in the form of cash. In 2002, the foundation gave out $3.8 million worth of grants. Beneficiaries of donors' largesse include a variety of charitable organizations involved with education, health care, environment, arts and culture and social services, says Ms. Patel. For example, financial aid has been given to a local mission to help purchase hospital beds to provide complete palliative care services to the homeless and money from the foundation was recently used to implement a new technology-mentoring program that will enable Inuit women to take advantage of e-learning opportunities. Donors such as Ms. Orton and Mr. Cox can let the foundation decide where their money will go or they can specify that it is used in a specific area, such as literacy but leave it up to the foundation to decide which charitable organization gets their donation. Or, or they can request that it be channelled to a specific organization such as the Canadian Cancer Society.
Donors include individuals, families, clubs, corporations and other charities. "The Community Foundation makes it possible for people of modest means to participate as well as helping the wealthy," says Ms. Patel, noting that many who wish to honour or memorialize a loved one choose to set up a permanent fund in a person's name within the foundation.
The foundation can assist people who want to enjoy the tax saving advantages of charitable contributions in a particular year but are not certain which charities they would like to support, says Ms. Patel.
"They can establish a fund quickly, obtain a tax receipt for the contributed amount and then take their time deciding where to focus their giving from the fund. The knowledge and experience of community foundation staff can be tapped to help with these decisions, which can be made over the course of months or years." Ms. Patel says many charities, including other foundations, place their endowment funds with the Community Foundation of Ottawa to ensure their future financial viability, preserve their endowments in perpetuity and benefit from ongoing professional endowment management expertise. Other organizations that set up endowments include universities and hospitals, she says.
Another way Ottawa residents can give gifts in perpetuity is through Leave a Legacy, an initiative which encourages people to use their wills and estate plans to donate money to charity. The unique community-based program helps put money into the coffers of a variety of not-for-profit groups, which raise funds for causes such as health care, education and the environment.
Leave a Legacy began in central Ohio in 1996 and has spread into more than 80 communities across North America. In Eastern Ontario and Western Quebec, Leave a Legacy is being spearheaded by the Canadian Association of Gift Planners with the support of the Community Foundation of Ottawa. "If you have lived a full and happy life and would like to consider giving something back, Leave a Legacy speaks to you," says Boyd McBride, past chair of the area Leave a Legacy program.
"Legacy gifts are a painless way to make an enormous difference," says McBride, who is also national director of SOS Children's Villages Canada, an international agency that cares for orphaned and abandoned children. "Your donation will not affect your current lifestyle but will make a big difference for charity. It is a win-win situation."
According to Leave a Legacy, statistics released about 10 years ago showed that 3.5 million Canadians were expected to die between 1990 and 2010, leaving an unprecedented $1 trillion to their families and the community. About two million will die without a will, effectively losing the ability to control the distribution of their assets to their chosen beneficiaries. The Leave a Legacy program aims to encourage Canadians to draw up wills and while they're at it, consider leaving a portion of their assets to charity. McBride encourages people to will money to charity only after they are certain the needs of their families are met. "Talk to your lawyer, your family and your financial planner. At that point you will come to the right answer concerning what you are comfortable doing for the broader community," says McBride, noting that in recent years, the average bequest to Canadian charities has been around $20,000, in many cases donated by people of modest means.
People who decide to will money to charities can do it in several ways. Easiest, says McBride, is to make a simple notation in a will, specifying exactly how much should be left and where it should go. Prospective donors can also purchase a life insurance policy and make the charity of their choice the beneficiary, or they can set up a trust.
If you want your bequest to go to a specific office and be used in a specific manner, state in your will that you are leaving a gift to the Red Cross, Ottawa Division, rather than simply the Red Cross. And state clearly that your donation to the Canadian Cancer Society is to be used in a specific way, such as for breast cancer research.
Leave a Legacy is aimed at older people who might be interested in leaving money behind for a charity. But organizers also hope to interest younger people who will be around for years to come and would consider earmarking gifts to not-for-profit groups when they draw up or amend their wills.
Estates that earmark money for charity are usually eligible for a tax benefit. For more information contact your favourite charity or discuss your options with your lawyer or financial planner. For information about the Community Foundation of Ottawa, call (613) 236-1616 or on the Web go to: www.communityfoundationottawa.ca
