Limiting client conversations about philanthropy to tax savings is “cold” but also counterproductive, says a leading industry voice, pointing to a need for more comprehensive charitable giving plans.
“These financial advisors are going to be talking to the top 10% or 15% of people with wealth in Canada, the prime donors, and they are not necessarily doing it the right way,” says John Hallward, founder and chairman of Giv3. “The tax savings, tax minimizations strategies – these wealthy Canadians already know they are going to get a tax receipt. What they really want to have is a meaningful conversation.”
Having that holistic approach with the client and the family helps to foster that message of giving and caring for others – something that can be passed along down through the generations.
“I want to involve their children in the act of giving – so the conversation is really about values and making a difference. Don’t talk to me about tax savings – that is so crass, so cold and so calculated. And frankly it misses the boat,” says Hallward. “It’s cheaper for me not to give anything than it is to get a tax credit, because I only get half the dollar I gave. It’s not about that – it’s about making a difference and giving back; and that’s what we need financial advisors to appreciate: that you’re having the wrong conversation.”
It is a fear that money donated is money lost – which isn’t true, says Hallward, who is also global director of new product development innovation with Ipsos ASI.
“I think these financial advisors are scared that they are going to have these conversations with their clients and they are going to give away money, and they’ll have less business,” he says. “But the research proves that to be wrong.”
If you talk to your client and get to understand their values, you actually build a stronger relationship with your client, Hallward argues.
“You get to meet the other members of the family; you get to meet the next generation – and by the way, they are going to be donating money with or without you, so you might as well get to know them ,” he adds.