The OAF Blog

2013 Federal Budget – Application to Charities

March 22, 2013


The 2013 Federal Budget contains a number of items that will be of interest to charities. The government references a continued dialogue with the charitable sector on measures that can increase the number of Canadians making donations. Initiatives promoted by the charitable sector, such as the ‘stretch tax credit’ or capital gains tax relief on donations of private company shares or real estate were not included. Many of the recommendations contained in the Report of the Standing Committee on Finance – Tax Incentives for Charitable Giving in Canada (February 2013) remain just that - recommendations.

That said, there are measures of interest – a good summary is found in the Charities and Not-for-Profit Newsletter published by Miller, Thomson, a Toronto law firm.


Canada Cultural Investment Fund: Endowment Incentives Component

For large charities, extremely positive news in the Budget – the $10 million limit on matching funding through the Endowment Incentives Component of the Canada Cultural Investment Fund is being increased to $15 million for the life of the program ( 2015.)

Economic Action Plan 2013 announces that the Endowment Incentive component of the Canada Cultural Investment Fund will increase to a maximum benefit of $15 million over the life of the program, an increase of 50 per cent. The Endowment Incentives Component of the Canada Cultural Investment Fund helps promote corporate philanthropy and private investment in the arts by providing government grants to match private sector donations.

Starting in 2013, the amount of funding an arts organization can benefit from, over the life of the program, will increase from a maximum of $10 million to $15 million, an increase of 50 per cent. This will help ensure that large arts organizations such as the National Ballet of Canada, the Orchestre symphonique de Montreal, the Banff Centre and the Stratford Festival can continue to demonstrate leadership in building private sector support, while maintaining access to the program for small- and medium sized arts organizations. With this program adjustment, the Government of Canada is taking concrete steps to help ensure that Canada’s arts and culture sector contributes to a strong economy, with arts organizations becoming more resilient and self-sustaining through the continued support of the private sector



The Diversity of Private Philanthropy

March 04, 2013

People of all means give time, and money to support an art form, artists and organizations important to them. That desire to contribute can be lifelong, and is a process that evolves from being a volunteer, to financial support and ultimately a bequest or legacy gift. The process of determining how support moves from time, talent to treasure is a process that is personal and unique to every person or family.

We are approached by individuals who would like to make a long term gift to support the arts, encourage new artists (scholarship or award) or a particular organization. Charitable gifts can be implemented through a variety of structures. We try to begin the conversation to discover:

  • Would you like your gift to have an immediate financial impact or take a form that supports financially over time?
  • Will this be your gift or one that involves your family?
  • Is your gift to be made now, or in future as part of your estate plan?


The Immediate Gift

For an immediate financial contribution, a cheque or donation of securities is easily accomplished and is tax effective (particularly securities donations) and is gratefully received by the organization. A gift that will benefit over time requires thought and planning, often requiring the involvement of your legal and tax advisors. Charitable gifts are tax effective and where possible, try to implement a gift that is most beneficial to your personal tax status.


Specific Purpose

If you wish to retain a degree of influence or control over how your gift will be used, more complex documentation is a requirement. This will happen where you want to restrict the use of your financial gift for a particular purpose or time period. The arts organization you support may have a particular financial need (capital campaign, new production, outreach program) that aligns with your goals. In any situation, it is wise to talk with the organization about your desire to support and learn what can best help the organization meet their arts mission, whether in the short or long term.

As an example, should you decide to make an endowed gift, your intent is to create an income stream for the arts organization and the principal is to remain intact. That can be in ‘perpetuity’ – one way to think is to see this as a gift lasting 100 years or longer. Or, the principal could be held for a fixed period, say 10 or 15 years, during which income and/or some of the principal is paid out. At the end of the time period, the organization benefits from a stable source of funding and perhaps a final capital gift.


Honouring a Family Member

In the situation of honouring a family member, considering the benefits of an award or scholarship can be very meaningful to the person and family member – whose personal legacy lives on through supporting future generations of artists.


Important Considerations

When making a gift to an arts organization, It is important to understand the organizations’ financial position – your desire to make a long term gift could be counter-productive if the organization is struggling to meet the financial demands of current programs. An arts organization whose operating income covers expenses, may be delighted to receive a long term endowed gift, where the income provides flexibility for planning, adapting and a source of extra income to support their arts mission. You will want to know if the organization has the capacity or access to expertise (such as the OAF) to effectively manage an endowment, or long term fund. Will an endowed gift meet the current or first priorities of the arts organization ? Discussions like this can help you clarify if your long term gift will be of greatest value, today and in future to the mission of the arts organization.

It is always a good idea to consider the contingencies – what would I like to happen to my gift in the event – the organization ceases to exist, or the program it supports comes to an end. Everything has its own life span and having the ability to re-direct to related artistic causes means your gift will continue.


For every person wanting to support the arts financially, there are many options that exist to meet your goal or which can be tailored to your financial situation and the goals you and your family have. Making an informed decision is most important, whether the gift is one time and immediate or one that will last a generation.



Creating a rapport with your Donors

January 28, 2013

Whether you are the Executive Director, Artistic Director, Development Manager or Board member, if you are actively involved in the administration of an arts organization, it is likely that you get involved in conversations with donors – individuals and families whose time and financial support help sustain your organization and its programs. Some people have a natural gift for establishing a personal rapport and building a trust relationship with people, greatly enabling conversations where the expected outcome is new or additional financial contributions. Most of us struggle, to some degree with parts of this process.


Bristol Stragegy Group Report

A short report I came across from the Bristol Strategy Group (2010) illustrates the art of holding conversations that build trust between two people in a clear and simple way.

Establishing a relationship involves listening to the other person – it is much more important than what we say in a conversation. There are three quite simple questions to incorporate into a conversation with your donor:

  • “What do you want to achieve?”  - described as the ‘success’ question to learn what motivates your donor; 


  • “What do you want to avoid?” -  deepen your perspective on donor motivation by learning what the donor wants to ‘avoid’ –  What don’t they want to happen if they support you,  for example, your organization and programming no longer exist; 


  • “What helps you decide what charities to support?” – allow you to learn what your donor’s expectations are for service, recognition.


The article suggests that using the three questions changes a conversation to one of respectful interest focusing on the donor and their reasons for giving/wanting to support your organization. Going into a conversation, you will be rightly proud to speak about your arts organizations’ mission, programs and challenges for success. It is important to begin by understanding what your prospective (or current) funder wants to support, what motivates them to give and what their expectations are by providing their financial support.



Prior to starting a conversation, you should be clear on what you want to accomplish at your meeting. In building a successful donor relationship, prepare by learning as much as you can about the donor before the meeting starts. When you meet, focus on listening – what are you hearing, which may differ from the words your prospect/supporter actually uses. Does that help you understand if this is a strong prospect, and can you meet their expectations? You hope to come away with knowledge that helps you build a strong and enduring relationship with a donor – they will become an advocate of your arts organization. Your time is precious, and the questions can create a positive atmosphere where both parties may find out - ‘we aren’t right for each other’. Not everyone will say ‘yes’…..


The Three Questions

Using the three questions creates an opportunity for an informative dialogue that lets the prospect know you are personally interested in them. The approach is equally applicable with current donors as you try to deepen current levels of support. Donors may respond differently to the ‘success’ and ‘avoid’ questions and using both can give you a deeper insight into their beliefs. The last question will help you learn what the donor expects from you in return for their financial support.

The questions described in the article are simple and can be used by anyone in your organization – they are easy to ask, and people like to respond. You are keeping the focus on them and not you, allowing you to learn important information about the profile of the donor, while quickly building a trust relationship with that person.





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