As a Canadian I know we rarely tout our achievements. As philanthropic Canadians, we are even more reserved. This may be because of the roots of our giving come from British culture, or how we have created our wealth in the first place. Various studies have reported that 80 percent of our business sector is built by SME’s and the majority of those are family-owned. This means that our philanthropy, both corporate and family, is a reflection of our personal social values (as opposed to an either/or approach to giving – based only on corporate values or on personal values).
Whatever the reason, we are entering an age where we need to be more vocal about how we give, why we give, and where we give to. This is important because as a society, we are currently experiencing the largest inter-generational wealth transfer in North American history. You can read more about this wealth transfer andits implications here.
Boston College recently published the American stats for this wealth transfer, “A Golden Age of Philanthropy Still Beckons, (pdf) and specifically what has been expressed as the anticipated actions of the next generation (those who are about to inherit that wealth). The numbers have been adjusted since the original study in 2007, and even with the recession, the amount of money entering into the marketplace as a direct result of this transfer is going to be $59 trillion.
We were active and mindful of each other during a time of crisis, and that has had a ripple effect throughout our city and the actions we have undertaken. All of these actions: the donation of time (volunteering), talent (professional and expertise sharing), and treasures (financial) play into how we choose to use our wealth and what types of communities we want to create.
When sitting down with your financial adviser, and planning things out for the coming year, social capital management should be considered an embedded part of your financial strategy. This is not just about what charities are you going to give to. It is about the mix of investment tools (insurance, stocks, mutual funds, etc.) that you are using to build and manage your wealth AND about the plan for transitioning this wealth.
Asking questions about what types of investment strategies your adviser is recommending that balance out the need for income growth and your need to support the community, is just as important as evaluating the overall portfolio performance.
Not all social capital management tools are the same, just like not all investment and wealth management firms are the same. I encourage you to take the time to ask your advisors how they will assist you in developing your social capital plan.
With so much of your hard-earned money on the line, and the opportunity to make significant meaningful change in the world, it will be worth having a plan to execute this strategy and engage your children and grandchildren in this process.
Gena is the CEO & Founder of Dexterity Ventures Inc. You can follow her on twitter at@DexterityCon.