SPECIAL TO THE GLOBE AND MAIL

PUBLISHED NOVEMBER 20, 2025

I have a friend whose cousin won $1-million recently. When I met the guy last week for the first time, I asked him what he was going to do with the money. He listed a few things and said: “I also gave one-quarter of it to charity. Now I have $999,999.75 left.” Despite his kidding, he does want to make some meaningful gifts.

Giving Tuesday, which was initiated 12 years ago, comes annually and is on Dec. 2 this year. I want to encourage you to be generous. And as you think about how and where to donate, consider taking an investment approach to your giving. That’s right. Make your gifts as though you’re making investments. Here’s what I mean.

Understand your ‘why’

When you invest, you do it with a purpose in mind (saving for retirement or education, for example). When donating, clarity of purpose is better than spontaneity – which is what happens when someone knocks at your door in December looking for donations. (There’s room for some of this type of giving, by the way). What motivates you to give? What experiences in your life shape what you care most about? What role do you want philanthropy to play in your life story (A private act? Modelling generosity for your kids? A way to express your values? A legacy for your family?) I’ll spend more time on this next week.

How fundraisers engage with tomorrow’s donors as a long-term strategy

Donation challenges push charities to change fundraising strategies

Create a giving allocation

Just as your investment portfolio is guided by a strategic asset allocation that reflects your risk tolerance, you should create a strategic giving allocation. This is simply a plan for how you’ll divide your donations among the causes or charitable sectors that matter most to you. It can also change from year to year. If you don’t design an allocation, then the requests you receive might design it for you. Consider these areas for giving, among others: poverty and social services, health and medical research, education, youth development, arts and culture, environment, international aid and development, community and civic organizations, sports and recreation, animal welfare, and faith-based organizations.

Diversify your giving – to a point

After creating a strategic giving allocation, choose the individual charities to support. I have a friend who, last year, gave donations to 45 different charities. The problem is that each charity received a very small amount. In the investment world, you can overdiversify to the point where adding more investments doesn’t reduce risk. In the charitable realm, you can overdiversify so that you’re having no meaningful impact on any one charity’s work. Rather than giving $100 to each of 10 charities, you might consider giving $1,000 to one charity. Consider focusing on two to four primary charities to receive the majority of your charitable dollars in order to anchor your impact. Then, add satellite charities around this. The more dollars you donate, the greater the number of primary charities you can have.

Give for the long-term

Just as long-term investing will compound the value of your portfolio, long-term giving can compound the impact you’re having on a particular cause. Consider making pledges to particular charities that you want to support. Support them for at least three years, if not longer, and let them know what to expect from you in the future by way of these pledges; it helps charities plan. Long-term giving can also create a closer relationship between you and the charity, which will also help you stay informed about the impact you’re having.

Donation challenges push charities to change fundraising strategies

Consider tax-efficient giving

If you take advantage of our tax system when you donate then you’re effectively having the government partner with you in your giving. Consider donating appreciated publicly traded securities rather than cash, since this will eliminate the tax on any capital gain in addition to providing a donation tax credit (or deduction for corporations). Other ideas include: making larger donations if you have large capital gains from the sale of a business, real estate, or other assets; donating flow-through shares; or establishing a donor-advised fund (at your community foundation or another public foundation) to allow for a separation of the timing of your donation and the ultimate distribution to charities you want to support.

Monitor the impact

Have a conversation with the charities you want to support – both before you donate, and after. Before you donate, ask them what problems that they exist to solve, what activities they undertake, the outcomes they aim to produce, and the long-term change they’re working on. Each year after you’ve donated, review their annual reports, ask them to explain the impact they’re having – and speak with program directors, researchers, and front-line staff – not just a marketing team.

Taking this approach will lead to more meaningful giving. Give it a try.

 

Tim Cestnick, FCPA, FCA, CPA(IL), CFP, TEP, is an author, and co-founder and CEO of Our Family Office Inc. He can be reached at tim@ourfamilyoffice.ca

 

Download a copy of this article in pdf here.