The Informed Philanthropic Advisor: Helping Your Client Start a Charity

We know you’re the seasoned specialist when it comes to advising your clients on a range of financial and legal topics, but as we’ve discovered over the course of our The Informed Philanthropic Advisor series, the philanthropic landscape is anything but simple. 

That’s why Bloom Investment Counsel, Inc. has put pen to paper in this new informative series to ensure you can become the best possible partner to your clients when it comes to navigating the often challenging (but very rewarding!) charitable sector.

So you’ve done the legwork—what’s next? If you’ve been following along for the entire series, you know that after you’ve had the often tricky conversation about philanthropy, assisted your client in identifying an organization that aligns with their values, and helped them research to ensure the organization is legitimate, there is still lots of work to be done to properly form and execute the plan. But what if your client is looking to expand their horizons by starting their own charitable endeavour? 

Bloom Has You Covered

Crafting a comprehensive charitable plan to help your client foster their own organization has numerous stipulations and regulations. This installment of the series will take you through some of the most important tips to ensure you can point them in the right direction!

Be sure to catch up on our previous articles, The Informed Philanthropic Advisor: Missing Out on This Conversation with Your Clients? It Could Cost You!, The Informed Philanthropic Advisor: Three Important Signs Your Client Needs Your Help if you haven’t!, and The Informed Philanthropic Advisor: Three Red Flags to Watch for to Ensure a Charity’s Legitimacy if you haven’t!

Charity Planning 101

Perhaps your client has expressed interest in spearheading their own philanthropic endeavour. Whether it’s because they want to make their own mark in the space, or whether they feel there is no pre-existing charity that accomplishes the philanthropic objectives they’re passionate about achieving, this undertaking is undoubtedly both highly rewarding and vastly demanding.

Let’s begin with defining some of the most commonly pondered sector terms and phrases.

What is a Charitable Plan?

A charitable plan is simply a well-defined, carefully thought out process for how your clients will give to philanthropic endeavours. It is the way in which the client will support the cause or charity that means something to them—whether that encompasses giving to a pre-existing charity, or a charitable organization they develop themselves. In either case, there are numerous factors to consider to ensure the execution is smooth and provides an intrinsically meaningful experience.

A charitable plan often encompasses aspects such as the organization to donate to, the amount to give, and how often the client will donate. The answers to these factors depend heavily on your client’s specific situation both financially and personally—including which stage of life they’re in, their income, and their giving objectives. 

The importance of creating a detailed charitable plan should not be underestimated. A comprehensive discussion with your clients to map out all of their personal and financial considerations will help you develop and deploy a strategy that best aligns with the criteria that is deemed important for their charitable vision.

What is the Difference Between a Charity, a Nonprofit, and a Foundation?

So, what organizational entity is right for your client? Let’s start with reviewing three major types of organizations in the giving sector.

What is a Charity?

  • A charity is an organization that must meet strict requirements outlined by Canada Revenue Agency (CRA). 
  • Charities provide programs that meet the charitable activities as outlined by the Canada Revenue Agency’s Charities Directorate. 
  • They are registered and regulated by the CRA and are able to issue tax receipts to donors, and can also apply for funding from various sources.

What is a Nonprofit?

  • Nonprofit organizations are incorporated as legal entities separate from its members and directors. 
  • The distinguishing difference here is that not all nonprofits are registered as a charity with the CRA. 
  • Nonprofits are allowed to earn a profit, but profits are used to further its corporate goals (and not be distributed to shareholders, members or directors).

What is a Foundation?

  • A foundation is a category of registered charities that principally exist to allocate funds to qualified donors. 
  • Canadian foundations can set forth to have a variety of purposes—some exist to provide donations to other charities, while others exist to be a funding branch for another charity. They also may exist to carry on their own charitable activities.
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Which Type of Charitable Entity is Right For Your Client?

The answer to this question hinges on the activities your client wishes to carry out, as well as their overarching objectives. 

If they’re looking to be able to issue tax receipts to donors or provide their own charitable activities, a registered charity may be the way to go. 

On the other hand, if leading a social enterprise with fewer regulatory constraints for earning income from events, a nonprofit may be the path to follow. 

If your client is looking for more flexibility in terms of what their organization can accomplish, a foundation might be the right fit.

Bringing in the Experts

Of course, this landscape is highly intricate and if your client is serious about founding an organization of their own, it’s worth bringing in a true expert. Joanna Bacchus, Toronto-based Strategic Growth Partner, weighs in.

“Charitable planning is a significant undertaking. Just as clients come to advisors, there are times when we as advisors are best to engage outside specialists in the area, even to execute efforts within our specific niche, when the situation is complex (for instance, in the case of a client wanting to commence their own effort),” Joanna suggests.

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Resources to Put You on the Right Track

Joanna also offered up some of the best resources she personally calls upon.

“Toronto-based charity lawyer Mark Blumberg is a true expert and at the top of his field when it comes to all things charitable giving. If I have a client who needs specialized expertise in that area, he is always my first call.

“If you and your client aren’t quite there yet, Mark Blumberg runs two of the best sites out there when it comes to all things charitable giving. Whether you’re just starting out on your philanthropic journey or you’re a seasoned veteran, Charity Data and Smart Giving are highly valuable resources. 

Charity Data gives you the chance to discover charities through filtering by cause, keyword, name, program, category, city, and province—allowing you to efficiently narrow down your search. Smart Giving, on the other hand, provides users with a blog-style format that discusses everything from the best ways to donate to charity, to how to avoid charity scams.”

Three Simple Steps for Starting a Charity in Ontario

  1. Visit a Specialist

While this step is not mandatory, we strongly suggest it as it can make the entire process much smoother and oftentimes, quicker. 

Visiting a specialist in the area of creating a charitable organization, such as Mark Blumberg, ensures that you, the advisor, and your client do not miss any vital steps in a process that has numerous intricate regulations and stipulations. Engaging a true expert in the field will also make the following steps much more streamlined.

  1. Make an Informed Decision About Becoming a Registered Charity

At this step, you’ll be taking a deeper dive into the differences between the three charitable entity types we outline above, and ensure you select the correct organizational type for your goals. 

The CRA has numerous resources to help you make an informed decision, available to you and your client at this stage to ensure you can make an cognizant selection.

  1. Apply for Registration

After you’ve decided (and hopefully, engaged outside experts to aid in the decision making process), it’s time to pull the trigger! 

The CRA also has numerous resources for this stage, such as how to create an application document checklist, how to describe your charitable activities, and finally, how to submit your application.

How Bloom Can Help in the Giving Journey

If you’re seeking further advice, look no further than Bloom Investment Counsel, Inc. We are pleased to work with our clients’ advisors and assist clients to ensure that they have sufficient cash flow from their investments to use for their charitable endeavors.

Building Wealth and Cash Flow

Creating stable, consistent cash flow with your investments is hard. Bloom makes it easier. 

We are your partners in wealth building providing stable, consistent income solutions for your financial peace of mind. Our committed goal is to help ensure your money is working for you, and not the other way around. 

Custom Solutions

Bloom is delighted to work directly with our clients’ attorneys and advisors, including family office  and multifamily clients, providing custom, personalized solutions to help each client reach their unique diversification goals in a manner that best suits them. Continue making an impact in your community, and leave the legwork to us!

Income and Tax Strategies

Bloom is pleased to assist wealthy individuals, foundations, corporations, institutions and trusts in achieving financial independence by drawing upon a myriad of income and tax strategies—skillfully capitalizing on the wealth of returns produced in the form of three major income streams—dividends, capital gains, and interest income. Our methodology has worked for countless clients—we proudly have over 36 years of experience under our belts, and have managed over $2.5 billion in assets.

How to Contact Bloom

Contact Bloom at info@bloominvestmentcounsel.com or visit us at www.bloominvestmentcounsel.com to learn more about the ways in which you can experience financial freedom with multiple, steady, and reliable income streams.


Bloom Investment Counsel, Inc. is a well-established Toronto-based independent, privately-owned boutique investment management firm providing customized, actively managed, Canadian and U.S. dividend-paying portfolios for wealthy individuals, family offices, foundations, corporations, institutions and trusts.

Founded in 1985, Bloom has experience in managing in excess of $2.5B in assets over the years. We believe that generating independent cash flow is central to the success of our clients’ portfolios because it provides capital for the present day, if needed, while continuing to preserve and build wealth for the future.

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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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