All About Estates

Charity v. Benevolence

Last week I received two inquiries from caring colleagues hoping to help individuals in need.  One person had cancer and had lost his business, while the other was a sick child who perhaps could benefit from her own charitable foundation.  As heart-rending as these stories are, neither qualify as “charity”.   Both are forms of benevolence.

Charity and benevolence are confused all the time.  Simply, benevolence is support of an individual (human or, these days, animal) in need; charity provides public benefit and supports defined groups of individuals.  A gift to a registered charity will produce a tax receipt; a gift to a named individual – regardless of the severity of need – will not.

Crowdfunding v. Charity

The lack of a tax receipt does not diminish people’s generosity or faith in direct support of individuals – who are often strangers with a good story.  Witness crowdfunding.  In Canada, the personal donation platform GoFundMe reports similar revenue ($140 million from 1.8 million donors in 2017) as the registered charity platform CanadaHelps.org ($155 million from 417,300 donors in 2017).

Gifts by Will

Benevolence tends to be a spontaneous response to a personal catastrophe, but it may also be expressed through a gift by will.   Think about any fixed amount legacy to a friend, former employee or relative in financial need.  If the testator wants to help future unknown recipients on a personal basis the gift may morph into a charitable purpose: the relief of poverty.

Charities with Benevolence Programs

There are currently 91 registered Canadian charities that include the “benevolence” or “benevolent” in their legal name, which conduct a variety of activities.  For example, the Unison Benevolent Fund “is an assistance program – created and administered for the music community, by the music community – designed to provide discreet relief to music industry professionals in times of crisis.”

A number of charities operate financial aid programs related to their mission.  For example, colleges and universities offer bursaries, which are educational awards based on financial need.  Health organizations, including hospital foundations, have patient support funds.  Religious organizations, such as churches, support “at risk” community members directly.

Direct Individual Benefit

As technology provides the opportunity to “disintermediate” charities by providing direct support to individuals, I predict the pressure on charities to provide direct support to individuals will increase in the future.  Some of this support is evidenced based.  Charities like the Red Cross have come to realize, in certain contexts, that cash via debit cards is more valuable and empowering to the recipient than food and supplies.

About Malcolm Burrows
Malcolm is a philanthropic advisor with 25+ years of experience. He is head, philanthropic advisory services at Scotia Wealth Management and founder of Aqueduct Foundation. malcolm.burrows@scotiawealth.com

0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *