The Baron family farm is close to the Manitoba town of Carberry in more ways than one.
The farm is located right on the edge of the town, halfway between Brandon and Portage la Prairie, and the Barons have called it home since their grandparents homesteaded here in the 1930s.
That makes some very deep roots. The family all went to school here, they made friends here, and across the generations they have volunteered in all sorts of community groups here.
Doug Baron has farmed this land all his life, and in the early 1990s, his close community ties prompted him to work with other local residents to establish the Carberry and Area Community Foundation.
At the time the area was worried about the long-term sustainability of their community, says Baron. Local service clubs were finding it harder to attract volunteers and to hit the fundraising targets needed to keep the lights on in the recreation centre and other community facilities.
If Carberry was going to succeed with its long-term goals, it was clear someone had to find new ways to make more local dollars circulate through the community. But who would do it? And how?
“You could raise the money to build something, but you could never seem to raise the money to maintain it,” Baron says. “And costs for everything were going up.”
A community survey ultimately recommended establishing the foundation, which was launched in 1996.
Those familiar with how these models work know what followed. The organization became a place for local residents to donate, and, operating under the endowment model, it became the primary grant-making public charity in the community.
And it continues to do that work today, dispersing grants for everything from expansion of the fire hall, to museum and community hall upgrades, and much, much more.
Today, Carberry’s foundation is one of 55 in Manitoba, home to approximately one quarter of all foundations in Canada.
In all, 191 are represented by the Community Foundations of Canada (CFC) whose network collectively stewards combined assets of more than $5.8 billion, putting hundreds of millions back into communities.
Each foundation has its compelling stories of local philanthropy at work, and how big a difference they’re making in people’s lives. But there’s another story too. Included among the many families, businesses and industries that support them are the names of Canadian farmers with special bonds to their communities, often forged over decades.
Look, for instance, at the Henry S. Varley Fund for Rural Life administered by the Community Foundation of Lethbridge and Southwestern Alberta. The fund was established by local rancher Bill Long in memory of the uncle, Henry Stewart Varley, who took the boy in on his ranch southeast of Pincher Creek after Long’s parents died.
Uncle Henry raised Herefords and the ranch prospered. And when Varley died in 1990, Long took over the operation and grew the family business.
Then in 2013, Long established a scholarship program for agricultural technology students at Lethbridge College through his estate. And he further honoured his uncle and the Varley family by making a generous bequest to the foundation to set up the Fund for Rural Life, which will give ongoing support to projects for sustaining rural Alberta communities.
Another foundation gift from a farmer made national headlines a decade ago. This time it was local teacher, librarian and farmer Verna Averill who astonished her small town by donating $1 million to the Minnedosa and Area Foundation.
Her donation tripled the assets of the community foundation, enabled annual grants to increase from $10,000 to $60,000, and led to the creation of a new scholarship.
Those are but a few examples of the open wallets in the Canadian farm community that are supporting community foundations and so many more of the philanthropic activities that make rural Canada tick.
Community foundations are a major force, says Paul Nazareth, vice-president of education and development with the Canadian Association of Gift Planners (CAGP). He calls them “a key partner.”
But philanthropy still comes down to each individual making a decision to find a way to accomplish something good with their charitable dollars.
It’s a process Nazareth has another phrase for. He calls it “the conversation of the heart.”
These are conversations, Nazareth says, in which you figure out why you want to donate money by helping you identify what you feel most connected to, and what matters most.
“How” to donate is an equally important, yet entirely different process, helped by a vital separate conversation with your own professional advisors.
Canadians don’t donate their money to charity because they’ll gain financially. They donate so they can help something good happen. Still, a well-informed, strategic giving plan, backed up with legal, estate-planning, and financial advice, is a way to “give smarter” and can reduce taxes paid, too.
The key thing to remember is that Canada has a charitable tax credit system offering one of the most generous tax incentives in the world for charitable giving, Nazareth says. Advisors can, for instance, reduce your worries about the impact your giving might have on the family overall by identifying assets which the family can actually gift right away, enabling them to take advantage of tax benefits and actually boost income.
The way our tax and estate law is set up, Nazareth says, it’s often possible to give to a charity yet also free up money in life and in your estate at the same time.
It can also unite your family around a set of core values.
Darren Pries-Klassen, CEO with Abundance Canada, a public foundation that helps Canadians achieve their generosity goals by connecting them with charities in areas they care about, finds that when families have conversations about what charities to support, values are what rise to the top.
“A lot of the clients that we work with have grown up in homes where generosity comes out of church groups, or they have been very engaged in local communities or volunteered a great deal of their time,” Pries-Klassen says.
“There is already a culture of generosity.”
So that leaves the question: When should you start?
Often, a change in life circumstances, such as when retiring or when planning your estate, means you’re dealing with the complexities of taxes, so it can also be a good to consider charitable giving as part of an overall financial plan.
With so many options available for giving, Pries-Klassen always tells clients to give careful thought to how their gift suits their unique situation.
“If a person wants to simply donate some cash or write a cheque to a charity, that can be fairly straightforward,” he says. It’s when people start giving larger amounts or start giving assets, consultation with advisors such as accountants or tax lawyers becomes so important.
The same also applies to individuals who already have complicated tax strategies to plan around, i.e. farmers.
After all, there are multiple ways to give. You can, for instance, establish your own private foundation, sometimes referred to as a family foundation, although setting up a private foundation does come with legal costs and annual accounting requirements, and you must set up a board of directors.
An option is to set up a family foundation through a public foundation, said Pries-Klassen. The community foundations mentioned earlier in this article can be templates.
“Then you’re benefiting from the fact the public foundation has already established itself,” Pries-Klassen says. “Really what you’re doing is setting up a particular fund within the larger umbrella of that particular foundation.”
Another option is to name charities as beneficiaries in your will, as either a percentage of your estate, or by naming a specific amount or specific asset. Again, that’s where it’s important to have conversations within the family so there are no surprises.
Donating a life insurance policy is another option, as is donating publicly traded securities. In fact, the latter can take advantage of generous tax incentives.
“If you have an appreciated stock or security that’s publicly traded, you can donate that to charity and you can receive a charitable receipt for the full value of the gift,” Pries-Klassen explains. “By donating publicly traded securities, the taxes owing on the capital gains are waived. Then you can use the charitable receipt to offset other taxes that are owing.”
Another option to look at is donating registered accounts such as Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs).
“But, again, it’s important that a person check with their advisor to see whether or not that’s the right thing to do for their situation,” Pries-Klassen says.
With 86,000 charities in Canada there’s a lot of choice, maybe even a bewildering choice. Still, by identifying your values and by building on your personal connections to the causes these charities they support, it should be possible to identify a charity that you can trust to deliver the goods.
The Canada Revenue Agency website lists charities and has a search engine that can help identify nearby charities based on your postal code. The site can also help identify charities that people may not have been aware existed, or did not recognize initially as a charity.
One very well-known charitable organization widely supported in the farm community is the Canadian Foodgrains Bank (CFB), to which farmers contribute crops or cash, perhaps in memory or honour of an individual, or via a growing project or gift of shares.
A more recently established foundation is the FarmSafe Foundation, a registered charity of the Canadian Agricultural Safety Association (CASA), again supported by farms and agricultural businesses that value the work it supports in farm safety awareness, education and training.
And it’s not just dollars that get donated either; the gift of time from volunteers who support these organizations with key skills and experience is a part of critical giving, too.
“Philanthropy takes many different shapes and forms,” says Cindy Lindsay, director of learning for Community Foundations of Canada, an organization making concerted efforts to better understand rural philanthropy, and the motivations and influences on people’s giving throughout rural Canada.
Without question, rural communities have a longstanding history of helping one another, Lindsay says.
“There is this culture of volunteerism, a culture of giving back, whether it’s through clubs or through faith-based groups, or helping neighbours. It’s very much about who we are.”
Also self-evident is that a sense of place matters to those living there, and thus the ability to “give where you live” is important to those with long standing ties to communities.
Yet rural Canada is also challenged in multiple ways when it comes to philanthropy. Many small towns and villages across the country face the same kinds of struggle Baron describes in Carberry, from demographic changes that result in fewer people with time to volunteer, to less money circulating through small town economies as populations decline or shift. In some places, there are actually relatively few charitable groups or qualified donees to donate money to. Or, where there are organizations still working hard on behalf of their communities, they tend to be the ones “having to do it all,” says Lindsay.
Larger national charities campaign for donations, too, having an impact on where people end up giving money.
In response to all these factors, one of the things foundations are now doing is getting more involved in activities related to local economic development, and finding ways to invest in supporting ventures, such as helping to finance community bonds or support co-working spaces for startups to spur business development.
So, while courting economic or business development may not fit within CRA rules, community foundations are identifying this as an area of need in rural communities, and finding innovative ways to invest differently and be more directly engaged with these initiatives.
“There are some great things that are starting to bubble up in rural communities on ways we could invest differently,” Lindsay says.
Meanwhile, this is all happening against a backdrop of an aging generation of boomers transferring significant assets and intergenerational wealth to children. There will be plenty of decision-making going on as to why and how to go about charitable giving.
Says Lindsay: “We’re just really wanting to stress that they have these conversations, and to think about charitable giving.”