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How to Select a Charity and Build an Enduring Philanthropic Legacy?

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Leaving a philanthropic legacy is a great way to ensure that your name (or your family’s name) lives on and to make a positive impact on a cause or a community for generations. But how do you choose which charity to support in Canada?

Here are 3 important tips for making that decision, along with a way to generate the desired income for donation purposes, which we hope will help guide you towards making a meaningful decision.

Tip #1: Choosing a Charity is a Unique Personal (or Family) Decision

Make sure you align the cause you wish to support with your (or your family’s) values, interests, and passions.

Does the charitable organization represent you (or your family) in building the future you wish to see? Is the organization a “partner” whose progress you wish to follow and continue to invest in, for the long term? This personal reflection is the first step in deciding which charity will receive your donation.

Tip #2: Not All Charities are the Same

Some charities may have large endowments or reserves to draw on, while others may not and may be vying for your charitable donations. You may gravitate towards a charitable organization of the latter type where you feel your donation is most needed – but you may wish to look at its financial statements to understand its financial effectiveness and/or long-term sustainability.

Further, does the organization have a strong leadership team to bring about positive change? Wear your business hat when assessing your charity of choice just as you would when investing in any “partner” for the long term, especially if your intent is to leave behind a strong philanthropic legacy.

Tip #3: Is the Charity Registered?

In Canada, a “non-profit organization” and a “registered charity” are not necessarily the same thing. Registered charities are often called non-profit organizations, but an organization can be a non-profit without being a registered charity.

Both can operate on a non-profit basis, but charities must be registered and approved by the Canadian Revenue Agency (CRA). Additionally, charities have minimum requirements each year for spending on their activities or giving to qualified donees.

Importantly, only registered charities can issue tax receipts for donations, so you should confirm that your chosen charity is indeed registered if you are interested in making a tax-deductible donation. You can find out if a charity is registered or not on CRA’s website where the information is updated each business day.

Are You Looking for Income to Help You Build an Enduring Philanthropic Legacy?

What if you can build enduring wealth to give to the cause (or causes) closest to your heart? Many high-net-worth individuals and families are interested in charitable donations that can be maintained in perpetuity or for an extended period of time. The good news is that this is attainable.

The income from an income-producing investment portfolio composed of shares in dividend-paying companies with predictable dividends (and even a strong history of dividend increases) can help you achieve this. This stable, consistent cash flow can be used for philanthropic ambitions without the need to withdraw from the initial capital.

For example, say you have a lump sum amount of money that you wish to donate to the charitable organization of your choice, but instead of donating it all at one time you wish to donate a certain percentage each year. You can achieve this by investing the total amount in a dividend-paying investment portfolio which can generate both capital gains and income. Instead of reinvesting the income, it can be withdrawn from the portfolio to fulfill your charitable giving initiatives without encroaching on your initial capital.

Bloom Investment Counsel, Inc. has the experience to help you utilize this dividend investing strategy to build an enduring philanthropic legacy. Established in 1985, Bloom Investment Counsel, Inc. is a Toronto-based boutique investment management firm specialized in providing actively managed, customized Canadian and U.S. dividend-paying portfolios.

We have nearly four decades of experience helping wealthy individuals and families, family offices, foundations, corporations, institutions and trusts generate a total return through capital appreciation and a steady stream of income.

Get in touch with Bloom Investment Counsel, Inc. today to learn more on ways we can help you establish an investment plan that both reflects your time horizon and maximizes your philanthropic impact.

As believers of the importance of giving back ourselves, Bloom Investment Counsel, Inc. is delighted to collaborate directly with your existing trusted professionals, family offices and advisors to facilitate a cohesive and coordinated approach to help you build an enduring philanthropic legacy.

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This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.

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