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Comets, Prophecies and Legacy

This wonderful view off the docks of the cottage I was at on vacation shows Comet Neowise at the center left, just below the “pan” of the Big Dipper.  This comet has been one of the most spectacular comets of our lifetimes, and it has me thinking about the legacy of one of history’s most famous predictors of comets.

As an incentive to reading this month’s newsletter, look for a bonus close-up of Comet Neowise further down!

As most long-time readers probably know, I’m an avid astronomer and astrophotographer. During the last few weeks, I’ve been in astro-heaven, as one of the best comets of my lifetime has been gracing our skies at dawn and dusk. Our new visitor, Comet c/2020 F3 NEOWISE, made its closest approach to the sun at the beginning of July and is now on its way back to the nether regions of the solar system. If you missed it, don’t worry, it should circle back in another 6800 years!

 

Signs and Portents

For thousands of years, people have seen comets as predictors of the future, or major changes, or times of strife. On the more grosser side, to the Norse, comets were falling bits of the giant Ymir’s skull, which was held in the skies by four dwarves above the earth. “Celestial dandruff”, so to speak. I suppose given that the development of anti-dandruff shampoo was centuries away, their theory was as good a guess as any…

In the year 1066, a comet was believed to have portended the death of King Harold at the battle of Hastings. Greek and Indian astronomers, however, centuries before, had theorized (correctly!) that comets were celestial bodies that appeared periodically. Europe would finally catch up on the science of comets when Newton’s theory of gravity was used by Sir Edmond Halley in the early 1700s to predict the future arrival date of world’s most famous returning comet.  Halley’s comet, as it is now known, turned out to be the comet seen at the battle of Hastings. We will see it on its next loop back around 2061. (If you are impatient, however, you can see bits of Halley’s comets every May during the Eta Aquariid meteor shower or the Orionid meteor shower in October as the earth passes through its debris trail.)

 

Halley’s Comet

Edmond Halley was a fascinating person – he began his career captivated by the moon and, as a contemporary of Newton’s, he was also fascinated by gravity, which led him to study comets. Remarkably, Halley became the publisher of Newton’s Philosophiae Naturalis Principia Mathematica in 1687, which was probably one of the most renowned scientific publications in history.

Beyond his comet interests, he was an inventor. Along with designing an early model of the magnetic compass, Halley also invented a diving bell which used leather tubes and lead-lined barrels to supply fresh air under water. Ironically, one of his other little-known legacies was becoming one of the very first known people to suffer middle-ear trauma from staying underwater for long periods.

On the financial side, in 1693, he also published an article on life annuities and was one of the earliest people to work on actuarial science, the bedrock of the life insurance and pension industries.  (See, astronomy and financial planning are connected if you go back far enough – be still my geeky heart!)

Halley died at the ripe age of 86 in 1742, a remarkable achievement for that era. I think we can certainly state that he went out on the “Long Tail” of his actuarial predictions.

 

Halley’s Legacy

Halley is a fascinating person on so many levels and he’s largely remembered through legacy of the comet he predicted would return every 76 years. His life story is a good reminder to all of us, that a life filled with discovery and variety is a life that is more apt to be remembered through time and history than one without. Rather than fearing comets, as many of his time did, he embraced them with interest, intrigue, and a need to understand them better, as was true of his many other pursuits.

There’s a strong lesson on legacy for you and me in Halley’s life, especially during the year of uncertainty and chaos we’re living through. When you openly embrace curiosity and learning, while exploring the world around you, your legacy will find you naturally. I am certain that had Halley given into fear, his remarkable achievements would never have happened and humanity would have been the poorer for it.

On a more practical level, I can’t help but think there is a lesson in longevity we can learn from Halley, as well. In my nearly two decades of work as a financial planner, I have worked with many long-lived individuals like Halley. In every single case, the octogenarians, nonagenarians and centenarians I have spent time with all have shared Halley’s passion for learning and were willing to put their fears aside to try new things. Those who retain their childhood curiosity about the world around them seem to live the longest.

Halley, despite his lengthy lifespan, passed away before he would see his prediction fulfilled, as his comet did not return until 1758, when he would have been 102 years old. When it did return – in its usual spectacular fashion on Christmas night that year –  his place in history was forever preserved. He knew he wouldn’t live to see it, but wrote that “If it should return, according to our predictions, impartial posterity will not refuse to acknowledge that this was first discovered by an Englishman.”

 

That was a legacy request I think we can safely say is forever fulfilled.

 

Ryan

The information provided is accurate to the best of our knowledge as of the date of publication, but rules and interpretations may change.  This information is general in nature, and is intended for informational purposes only.  For specific situations you should consult the appropriate legal, accounting or tax advisor.

 

This was by far the most specatular image I managed to get of Comet Neowise while on vacation.  Did you know that Comets actually have two different tails – one made of dust (the browny-red part), and another called an “Ion Tail”, where charged particles of gas form a separate tail that is determined by the Sun’s magnetic field?  If you are interested in learning more, you can click through to this Wikipedia Article on the science and history of comets.

Where has the time gone?


This month, I’d like to share with you how much my own life has changed in not just the last few months, but in the last twenty years. The first half of 2020 has many of us reflecting on what is truly important to us, and I hope you enjoy hearing a bit of my sentimental musings as we start the summer season.

 

This July has marked some monumental milestones for me. Bridget and I celebrated 20 years of marriage on July 1, just a few days after our oldest son became old enough to drive. My dad turned 79 the same day, which was pretty good for a guy that six months ago was working hard to stay upright after major heart surgery that no one was sure he would survive. And then there was the last four or five months in lockdown. . . 2020 has certainly managed to be an interesting year.

On the professional side, this July 1 also marks my 18th anniversary as a Financial Planner. If you had asked me in July of 2000 what my life would hold in twenty years, I don’t think I would have managed to get a single aspect correct. Life often sends us down interesting journeys. I would argue that the journeys are actually far, far more interesting than the paths we lay out for ourselves along the way.

Here’s just a few of the many surprises and changes that were in my last 20 years, that I never envisioned on my wedding day:

  1. We had three boys and are less than a decade (we think/hope!) from being empty nesters. My oldest is a fierce defender of equality, with dreams of being an astrophysicist; my middle son is an incredibly talented artist and animator; and our youngest a brilliant creative engineer-in-training. I had no idea that children would turn out to be so inspiring, fascinating and even occasionally aggravating in such cool and interesting ways.

  2.  I helped found a museum dedicated to World War II radar and forged deep friendships with a number of veterans. They have all since passed away, but their memory and learnings will live with me forever. The museum has had its ups and down (www.secretsofradar.com) but has managed to keep veterans’ incredible stories alive for future generations.

  3. I became a financial planner. Strange to say, I never saw it coming – I was a professor and professional musician in 2000. The Harris government’s cuts to arts and education set me down this path – which I have loved more than I ever anticipated! As an “investment guy”, I’ve now lived through three market crashes and recoveries, each of them very different with different underlying causes.

  4. My mom died relatively young of breast cancer. While this was a long, awful and stressful three years for our family, the experience enriched our family’s lives in so many ways. It seems odd that such a sad thing could be so positive…and yet, like many things, this brought us all together in ways we in no way anticipated.

  5. Bridget and I wrote three wills, averaging a new will every four to seven years. They all look very different from one another, too. I never realized how important a statement about my will has become, until life sent us many reminders that our time is precious and fragile on earth.

  6. Our closest friend survived an almost-always fatal heart cancer due to luck, a talented surgeon, and his remarkably positive attitude, and is now back at work. It’s pretty incredible. A couple of days ago, he baked me the best carrot cake of my life for my birthday and drove 3 hours for a socially distant backyard visit.  His COVID hair was a big contrast to his post-chemo baldness at this time last year!  We enjoy every second we get to spend with him, even if it’s been through virtual card games for the last little while until our visit.  His presence was the best birthday gift ever.

Finally, the part that I am the most professionally proud of. Our work at Quiet Legacy has resulted in over $30,000,000 in current and future estate gifts to charity since we founded the firm in 2013. It’s so cool and amazing to think we’ve had that much impact in such a short time.I’m pretty sure the next 20 years will have many other surprises for us as they will for you – I hope sharing some of my own milestones and markers will help encourage you to reflect on your last few years as well as you do your own planning work. One of the great benefits of putting reflective thought into your planning is that while you can’t plan for the unexpected, it can help you out when surprises pop up out of the blue.

As for out of the blue, Bridget and I were planning to be gone this month on our “second honeymoon”, a bucket-list trip to Scotland for our 20th anniversary. That one will likely have to wait a few more years yet – so we’re going to take a week off from July 18 to 25 and travel down the road a bit to a cottage now that restrictions have relaxed. If you need us, I’ll have advisor backups in place. Feel free to reach out to our office through Sarah if you need help.

Have a terrific July!  Bridget and I hope to be sitting near our canoe once again, watching the moon rise, enjoying our third decade together.  It may not be the Isle of Skye like we originally planned – but it is still a pretty awesome place to be.

Ryan

The information provided is accurate to the best of our knowledge as of the date of publication, but rules and interpretations may change.  This information is general in nature, and is intended for informational purposes only.  For specific situations you should consult the appropriate legal, accounting or tax advisor.

What is it that you value?

An Important Note

We write our newsletters several weeks in advance, as we must get a pre-screening required by our regulators on anything we circulate.  I wrote this piece before the abhorrent and tragic events of the last few weeks.  While our article focuses mainly on the Environmental side of the ESG movement in the context of Responsible Investing,  the other two aspects – Social Equality and Governance both speak to the heart of the ongoing protests, and are more relevant than ever.  If you would like to learn more on these other areas of Socially Responsible Investing, drop me a line at ryan@quietlegacy.com , and I’d be happy to share more resources with you.

 

Our youngest  (in the red shirt above), wasn’t always happy to join us on our nature hikes, until a recent experience gave him new perspective.  That got me thinking about how we can better incorporate our value system into our financial planning….

 

One of the great unexpected and joyous moments of the last 90 or so days of isolation has been watching my youngest son Haydn develop into the exact same avid reader that I was at his age. As isolation dragged on, we became increasingly concerned that he would end up tuning himself out watching videos on YouTube, and never heading outdoors. My wife Bridget brilliantly decided to read him the first chapter of Harry Potter – and a monster reader was born!

Over the last three weeks, Haydn has read all seven Harry Potter books, a five-book series by Ric Riordan, and has now started onto the famed Narnia Chronicles by C.S. Lewis. We have to take his books away because otherwise he’d read from dawn to midnight every day.

Still, as happy as we are to have him reading, it is not terribly healthy to do so every waking hour. I finally managed to get him to put his book down by playing the entire Lord of the Rings movie trilogy, suspecting if he had enjoyed the other fantasy series, that he would love this one too. We sat down over the weekend to watch it together. There is something remarkable about taking something you love, and sharing with your child for the first time.

Haydn particularly enjoyed the scenes with Treebeard, the Ent.  If you’ve never seen nor read Lord of the Rings, Ents are living trees, who steward forests and encourage the spread of nature. They also occasionally stomp on the nasty Orcs who try to cut down trees – that was a particularly enjoyable scene for our young son..

 

From Movies to Nature Walks . . .

We managed to channel Haydn’s love of the Ents into encouraging him to get out and join us in birdwatching. As it turns out, our little guy shares my love of photography and also has a keen interest in observing different birds as they have migrated through our backyard and local (still open!) natural areas. With his keen wit, he’s let us know that bird photography is all about the “3 Ds: Determination, Disappointment and Despair”. Despite the latter two Ds, we’re seeing a rekindled love of nature in our son. For the last few days, he’s been outdoors almost all the time, adventuring and reading in the forest behind our house.

We hope that Haydn will grow up sharing our love for the environment and nature, as it is a huge aspect of our lives. I’m encouraged that, even in the midst of our newly isolated lives, we are able to encourage this spark in his life. I hope that next time we are able to venture out into the backcountry to camp that he’ll be chomping at the bit to join us.

For us, as I know it is for many of you, it is extremely important to pass along our cherished values to our kids.

 

Matching your personal values to your financial goals

In our practice, we often talk about the importance of incorporating your personal value system into your financial planning. For Bridget and I a huge part of that revolves around our love of nature. A large majority of my own investments are in Socially Responsible Investments (SRI) that have a mandate to look not only at returns in financial terms, but also at the environmental, social and governance factors of their underlying investments. In the majority of my holdings, for example, I have selected mandates that emphasize environment as one of the primary considerations.

I’m not the only one however – in our practice, one of the greatest trends we have seen is an increasing interest in this area, particularly from our clients who have strong ties to environmental charities.

I was surprised and humbled to have found out last month  that I was named a finalist for the 2020 Wealth Professional Award for Advisor of the Year for Responsible Investments. When the announcement was made, I was very taken aback at receiving a large number of congratulatory emails from colleagues across the country in the industry. I hadn’t realized what a big deal these awards were within our industry. We’re called Quiet Legacy because we like to stay off the radar – I sure wasn’t ready for that kind of attention. However, it was lovely to find out one of our industry partners thought the way we worked with our clients on values-alignment was worthy of a nomination and that the judging panel saw fit to put us on the short list. We’ll find out in September (depending on how the lockdown goes) if we have won.

 

The future of responsible investing

I’m excited to see the progression of responsible investing in Canada.  Responsible investing practices take more than investment returns into account when selecting investment choice. More and more firms across Canada are signing onto the United Nations Sustainable Development Goals, which is a great first step. This framework is designed to provide a minimum standard which ensures that signatories are taking into account 17 different sustainability issues when choosing investments.

Even more exciting are those investment companies that are using their voting privileges to make an impact on particular sectors or companies to improve standards on everything from environmental issues to gender equity on boards and fair treatment of workers. Many will argue that the higher level of involvement and inspection of companies should lead to a better outcome both financially and for society. At the very least,  a recent summary of over 100 academic papers concluded that the extra work and research being done in this area by investment firms does not impact returns and, in some cases, may have helped lead to better results .

A decade or two ago, as a retail investor, it would have been very difficult to have a social impact through investment.  Today, however, even someone with a relatively small portfolio can find ways to align their personal values with their retirement planning. It is a very exciting time as more and more companies come around to this way of thinking. Today, anyone, not just large institutional investors, has more ability than ever to ensure that their investment portfolio can take an active, positive approach on many societal and environmental issues.

 

Make Treebeard (and Haydn) Happy

If you haven’t looked at your own portfolio lately, it might be time to start asking yourself if your own personal values are incorporated in your investment decisions. In our house, we’re hoping that our love for the environment will be  one of many values that our kids will inherit from us  – in more ways than one.  We feel pretty good knowing our values and our investments are well aligned.

I think Treebeard would be happy too.

Ryan

The information provided is accurate to the best of our knowledge as of the date of publication, but rules and interpretations may change.  This information is general in nature, and is intended for informational purposes only.  For specific situations you should consult the appropriate legal, accounting or tax advisor.

 

Wisdom of a generation

It’s been a crazy couple of months – we hope you and your family are holding up well.  We are looking forward to when we can see many of you again in person.  In the meantime, Quiet Legacy continues to be open and available via video chat or telephone to meet your needs.  Drop us a line at 226 884 5545 or ryan@quietlegacy.com if we can be of help!

 

 

I think that April 2020 will likely go down in history as one of the longest, most bizarre months of any of our lifetimes. Here at Quiet Legacy, although an essential business, we’ve been operating remotely now for over forty days, and as strange as things have been, we’ve been largely successful in adapting to our new normal, although our staffing has increased to a few extra family members, young children, and at least one dog.

I won’t lie, it has been difficult in the last few weeks to think what would be an appropriate topic for our newsletter for May – especially one that didn’t require mentioning the virus-which-shall-not-be-named. As our current crazy state of life grinds on, I find that for the first time in a long, long while, I’ve found myself strangely speechless.

In the midst of this, Sarah Morkin, our extraordinary Operations Director and I have been blown away by the incredible generosity of our communities, on a national and local scale, as well as within our client practice. We reached out to see how our clients who are in isolation are holding up, and in the process, we had many folks offer to pitch in to help if we learned of anyone in their neighbourhood that needed help. Our community has once again showed us why we love working with you so very, very much.

As Sarah and I spoke about this, and many other moments of kindness and community, she relayed how this situation reminded her so much of her grandmother, and how her community came together in hard times. We suddenly realized that Sarah’s grandmother’s story was the perfect thing to share with you this month. I hope you will be as inspired as I was to hear this in Sarah’s own words.

Ryan

 

“Individually we are one drop. Together we are an ocean.”
– Ryūnosuke Akutagawa

 

I wish to share with you the wisdom of my Grandmother (she is the young girl pictured above on the far left) and the lessons she shared with me before her passing. It is a story about community coming together to empower one another through terrible times. For me, it is also a parable as to how local charities and non-profits need our support now more than ever. It is through these groups that we can connect with each other in meaningful ways and change the course of a young life, as my Grandma was lucky to experience.

In the spring of 2012, I had graduated from college and started looking for work. While trying to find full-time work in my field of study, I was working as a waitress at a breakfast diner, with shifts that were from Friday to Sunday. Very graciously, my Grandma hired me for one day a week at minimum wage, to help her with cleaning and organizing. It was a great way to spend time with her regularly, while helping to stay on top of her innate ability to collect more things than her one-bedroom apartment could reasonably contain.

While I never meant to insult her with my organizing, I just never understood why she would need to hoard an abundance of paper, books, journals, linens, clothing, and kitchen supplies. As I moved from room to room, I would find money in her freezer, cherished family pictures hidden inside her notebooks and some of the most remarkable heirlooms tucked away in an inconspicuous box that could have been mistakenly destined for the trash.

One day, while cleaning her kitchen, we struck up a conversation that led to an insight on her life that I’d never been privy to before. The conversation started when I asked her why she was keeping so many red glasses in her kitchen, if she never intended to use them. On the top of her kitchen cupboard was a grand collection of various red glass ornaments. Goblets, candlesticks, pitchers, plates, bowls, all of which were dull and dusty. Some were gifts from her wedding and some were miss-matched one-off’s, collected from the shelves of her local Bibles for Mission, to which she was considered a frequent flyer. No matter where they came from, they were important to her and aside from my dusting, they were not to be moved. But on this day, as a joke, I brought two down, washed them well and poured us some cranberry juice to go with our lunch. She thought it was ridiculous, but you could tell she was secretly getting a kick out of it. Suddenly and unexpectedly, she began to open up to me.

“You see Sari, it was very different times back when I was young. We didn’t have all the new kinds of entertainment you have now. I was born in 1934 and by that time, my parents already had four kids to support and a farm that was struggling to keep afloat. There was a terrible drought in Saskatchewan and the great depression was hitting everyone hard. We’d didn’t have very much at all, but what I do remember fondly is the red stained glass window on our front door. The sun would come through that window and turn the whole room red. It was beautiful. That’s why I keep those silly things… it reminds me of home.”

Instantly, I had a lump in my throat for ever teasing her about them, for now my intentions were to immediately take them all down for a proper wash so that they’d sparkle for her. It never occurred to me that something collecting dust in the far reaches of her kitchen might symbolize such an intimate memory. Blaming the ignorance of my youth, I asked her what else she missed about her home.

“I miss my family”, she said. “I never fully understood the sacrifices they made to support our home and the community. So many people were losing family farms and struggling to put food on the table. Everyone worked so hard just to provide the bare minimum to survive.”

“My older brothers and sisters put their own money towards my weekly vocal lessons. My mother would stretch our food as far as she could, then make extra portions and it was my job to delivery it over to the neighbors. There were many neighbors sharing with one another, whatever they could spare. Extra potatoes, a loaf of bread, sugar and canned preserves would all be shared with families on our street, through our church and the local social clubs. We had such a strong bond with each other because we came together with kindness and generosity. Loss within one family was felt amongst all of us and it became a comradery that lifted everyone. It was something of a miracle that came from a very troubling time.”

That day I cleaned all the red glass decorations and left her apartment feeling a deeper connection in our relationship. For most of my life, we didn’t get into the details of her childhood. I knew that she’d been a professional singer, but the extent of those details were very vague. She wasn’t one to boast about herself and any personal details of her life before she started a family would only come up when prompted. Much of my memories of her was sharing a love of “The Sound of Music”, going to vocal lessons together, attending her choir’s concerts and being under constant scrutiny for bad posture and dining etiquette.

I would later learn that it was The Princess Patricia Club (PPC) of Regina that sponsored the furthering of her vocal lessons. After graduating high school, she became a member of the CBC radio choir singers and was featured regularly on the Trans Canada Live Show each Friday night. In September of 1955 she was granted scholarships from the PPC and the Lions Club, as well as a grant from the Canadian Council for the Arts, to study music in England at the Royal Conservatory of Music. She was the first student to ever earn 100% on a teaching exam, or any exam up to that date.

 

 

In October of 1959 she left to continue her studies in West Berlin, Germany. There she received scholarship and sang with the West Berlin Opera. She would go on to tour Europe for several years. In Neuchâtel, Switzerland, she was awarded with the key to the city. She would later go on to teach as a professor of music at the University of Bowling Green, Ohio, and sing in front of none other than Martin Luther King Jr.

 

 

I believe it is fair to say that her life’s accomplishments might not have been possible if it wasn’t for the support of her local non-profits and the charities that supported her in her time of need. These groups gathered people together to break bread, provide social support and host opportunities for awards, grants and scholarships. They invested in the youth of their communities and changed the course of many lives, forever. These groups were all funded by the collective contributions of a community and government alike. They recognized the value of investing in tomorrow by aiding those afflicted with hardship today.

This generosity is the key to our success amid times of social distancing and flattening the curve of this pandemic. I invite you all to think of that charity that is near to your heart and find a way to help their cause, in whatever way you can. These organizations are ones who support the next generation of leaders, artists, scientists, farmers, healthcare workers, educators and essential workers that will ensure a brighter tomorrow. Now, more than ever, we must realize how important these roles are to our society.

In our office, we see daily the impact our local organizations are making in our community, and now, more than ever they need our help. While many of our organizations are on the front lines – like healthcare, food banks and shelters–there are many other organizations that need our help as well. Our arts, culture and educational organizations have ground to a halt. Hopefully, if we can dig deep, and sacrifice for our common good, these organizations will be able to help another talented young woman find her way in life well into the future.

 

Sarah

The information provided is accurate to the best of our knowledge as of the date of publication, but rules and interpretations may change.  This information is general in nature, and is intended for informational purposes only.  For specific situations you should consult the appropriate legal, accounting or tax advisor.

 

If you haven’t had a chance yet, you can pick up a copy of Ryan’s Book Driven by Purpose from the website www.drivenbypurpose.ca, at Oxford Books in London Ontario, or on Apple Books, Kobo or Kindle.

How History shows us we will be OK.

What a crazy month it has been…

One of my strongest childhood memories is from 1984, the year I turned 10 years old. I had spent the weekend obsessively playing a video game on my brand-new Commodore 64 computer, in all of its 8-bit glory. I don’t remember what the actual game was today – only that it had a monster-like character, and that night, when I went to bed, I had an intense and vivid nightmare in which the monsters from the game were coming down the highway that entered my small town.

I woke up in a panic, drenched in sweat, and immediately looked out my bedroom window. Other than a single car travelling at 2 a.m. down the highway the better part of a kilometer across the field, all was still. No monsters in sight.

That didn’t matter to me though – I bundled myself up in my covers, buried myself so no monsters would see me, and huddled sleeplessly in the cocoon I had created for my own security. I think it took me nearly a year before I could fall asleep without being cocooned. Regardless of the irrationality of my own thoughts, the reptilian part of my brain had activated, and I believed that the monsters would come as soon as my eyes were closed.

Thirty-six years later, I sit here today with that image in my mind. In 1984, HIV had just been isolated for the first time and definitively connected to the AIDS epidemic. It is hard to imagine today, with HIV being a serious, but treatable condition, but back then, many people lived in irrational fear about even coming into contact with an HIV-positive person. Three years later, in 1987, princess Diana took the hand of a HIV-positive patient in a well-publicized moment of compassion, shocking a world in which even the nurses wore gloves when making physical contact with AIDS patients. Such fear, with the hindsight of three-and-a-half decades, seems incredible to us today.

And yet…. here we are today with COVID-19*  affecting stock markets. I can’t help to think back to the parallels to my 10-year-old self, and the world’s initial fear of HIV.

After this week of bad news, I’m sure we would all want to hide in our respective cocoons. That is, ultimately, how our brains react to uncertain news.

write this note after one of the most tumultuous weeks in investment history and certainly the most challenging week in over a decade by just about any measurement. Markets around the world have dropped 30 to 35% around the world and I am sure they will continue to gyrate for some time. Ultimately, as much as we would like to say that markets behave rationally, the truth is that when faced with the unknown, markets behave like the humans who run them. Sometime reptile brains take over and, like my 10-year-old self, they behave irrationally and fearfully. Ultimately, markets do poorly when the future is uncertain.

There is no doubt in my mind, the events of the last couple of weeks ultimately come from a place of fear. That said, I see many positive things going on. Governments around the world are taking steps to stop the spread of COVID-19 and inject financial liquidity into their respective countries – including a massive $82 Billion package announced today in Canada. Like every other pandemic, it’s hard to put a value on businesses when the impact is uncertain. One thing is clear, however, pandemics do not last forever and, more importantly, historically, those who stay invested, and those who add to their investments during the bottoming of stock markets, have the potential to do the better in the long term.

If your time horizon for your investments is long term, don’t stress about current events. While we can’t predict what the future holds for COVID-19, historically, markets impacted by unusual events have recovered.

In any market downturn, if you have a long-term investment horizon, staying invested has been by far the best strategy. Often, when markets rebound, they do it suddenly and trying to time the markets is nearly impossible. Missing just a few of the up days can mean a significantly longer recovery period for your investments.

Be smart: play the long game and stick to your investment strategy. Depending on your risk profile, you may consider moving some extra funds into the market in times like these. Again, we can’t predict the future – but the past suggests that moving money into bear markets in stages way over the next little while (to avoid the day-to-day volatility) has the potential to help grow your wealth.

One of my favourite books is a terrific thing to pick up and read in the midst of all of this: The Ascent of Money by Niall Ferguson, a UK historian. Ferguson covers over 1000 years of investment history, putting market swings in a much bigger context than anyone else I have read. If you find yourself isolated at home, it’s a very entertaining and informative read.  Amongst other things, you’ll learn about the Dutch Tulip investment bubble, and the Medici family, who basically invented the bond market, and used the fortune they made to patronize the arts and music.  One family member even became the Pope. The Ascent of Money is a fantastic read for all of us as we shelter at home in the next few weeks.  I’ve even started re-reading it myself this week.

If you don’t have time for a lengthy book, you can also read this great short article by GLC asset management with contains a fantastic graph of the last 70 years of the bull and bear markets to give context to the many market ups-and-downs of the past.

 

In the meantime, if you are a client, feel free call me if you have any questions on your investments. We’re trying to be in regular contact with everyone we work with to provide information and updates, but as you can imagine, it’s a big job.  We will never be too busy to talk, so by all means call us.

If you aren’t one of our investment clients, live here in Ontario,  and you haven’t heard from your investment folks, I’d be more than happy to chat with you and take a look at where you stand in the bigger picture.

 

We’re here when you need us.

Ryan

PS – Like everyone else, at Quiet Legacy we are all primarily working from home for the forseable future, but our business phones still route directly to myself and Sarah, and its business as usual for the most part thanks to the wonders of the digital era.  We’re still shipping copies of Driven By Purpose, if you are bored and would like something to read after you are done reading The Ascent of Money.   The only activity we’ve fully stopped doing for now is public talks for Charities.    Grab us as always at (226) 884 5545.

* I am very sorry to mention COVID-19 by name.  I feel like every single company I have ever done business with has sent me an email with word in the subject line. . .

The information provided is accurate to the best of our knowledge as of the date of publication, but rules and interpretations may change.  This information is general in nature, and is intended for informational purposes only.  For specific situations you should consult the appropriate legal, accounting or tax advisor.

Mid-Month Special Edition – How History shows us we will be OK.

 

One of my strongest childhood memories is from 1984, the year I turned 10 years old. I had spent the weekend obsessively playing a video game on my brand-new Commodore 64 computer, in all of its 8-bit glory. I don’t remember what the actual game was today – only that it had a monster-like character, and that night, when I went to bed, I had an intense and vivid nightmare in which the monsters from the game were coming down the highway that entered my small town.

I woke up in a panic, drenched in sweat, and immediately looked out my bedroom window. Other than a single car travelling at 2 a.m. down the highway the better part of a kilometer across the field, all was still. No monsters in sight.

That didn’t matter to me though – I bundled myself up in my covers, buried myself so no monsters would see me, and huddled sleeplessly in the cocoon I had created for my own security. I think it took me nearly a year before I could fall asleep without being cocooned. Regardless of the irrationality of my own thoughts, the reptilian part of my brain had activated, and I believed that the monsters would come as soon as my eyes were closed.

Thirty-six years later, I sit here today with that image in my mind. In 1984, HIV had just been isolated for the first time and definitively connected to the AIDS epidemic. It is hard to imagine today, with HIV being a serious, but treatable condition, but back then, many people lived in irrational fear about even coming into contact with an HIV-positive person. Three years later, in 1987, princess Diana took the hand of a HIV-positive patient in a well-publicized moment of compassion, shocking a world in which even the nurses wore gloves when making physical contact with AIDS patients. Such fear, with the hindsight of three-and-a-half decades, seems incredible to us today.

And yet…. here we are today with COVID-19*  affecting stock markets. I can’t help to think back to the parallels to my 10-year-old self, and the world’s initial fear of HIV.

After this week of bad news, I’m sure we would all want to hide in our respective cocoons. That is, ultimately, how our brains react to uncertain news.

I write this note after one of the most tumultuous weeks in investment history and certainly the most challenging week in over a decade by just about any measurement. Markets around the world have dropped 30 to 35% around the world and I am sure they will continue to gyrate for some time. Ultimately, as much as we would like to say that markets behave rationally, the truth is that when faced with the unknown, markets behave like the humans who run them. Sometime reptile brains take over and, like my 10-year-old self, they behave irrationally and fearfully. Ultimately, markets do poorly when the future is uncertain.

There is no doubt in my mind, the events of the last couple of weeks ultimately come from a place of fear. That said, I see many positive things going on. Governments around the world are taking steps to stop the spread of COVID-19 and inject financial liquidity into their respective countries – including a massive $82 Billion package announced today in Canada. Like every other pandemic, it’s hard to put a value on businesses when the impact is uncertain. One thing is clear, however, pandemics do not last forever and, more importantly, historically, those who stay invested, and those who add to their investments during the bottoming of stock markets, have the potential to do the better in the long term.

If your time horizon for your investments is long term, don’t stress about current events. While we can’t predict what the future holds for COVID-19, historically, markets impacted by unusual events have recovered.

In any market downturn, if you have a long-term investment horizon, staying invested has been by far the best strategy. Often, when markets rebound, they do it suddenly and trying to time the markets is nearly impossible. Missing just a few of the up days can mean a significantly longer recovery period for your investments.

Be smart: play the long game and stick to your investment strategy. Depending on your risk profile, you may consider moving some extra funds into the market in times like these. Again, we can’t predict the future – but the past suggests that moving money into bear markets in stages way over the next little while (to avoid the day-to-day volatility) has the potential to help grow your wealth.

One of my favourite books is a terrific thing to pick up and read in the midst of all of this: The Ascent of Money by Niall Ferguson, a UK historian. Ferguson covers over 1000 years of investment history, putting market swings in a much bigger context than anyone else I have read. If you find yourself isolated at home, it’s a very entertaining and informative read.  Amongst other things, you’ll learn about the Dutch Tulip investment bubble, and the Medici family, who basically invented the bond market, and used the fortune they made to patronize the arts and music.  One family member even became the Pope. The Ascent of Money is a fantastic read for all of us as we shelter at home in the next few weeks.  I’ve even started re-reading it myself this week.

If you don’t have time for a lengthy book, you can also read this great short article by GLC asset management with contains a fantastic graph of the last 70 years of the bull and bear markets to give context to the many market ups-and-downs of the past.

In the meantime, if you are a client, feel free call me if you have any questions on your investments. We’re trying to be in regular contact with everyone we work with to provide information and updates, but as you can imagine, it’s a big job.  We will never be too busy to talk, so by all means call us.

If you aren’t one of our investment clients, live here in Ontario,  and you haven’t heard from your investment folks, I’d be more than happy to chat with you and take a look at where you stand in the bigger picture.

We’re here when you need us.

 

Ryan

 

PS – Like everyone else, at Quiet Legacy we are all primarily working from home for the forseable future, but our business phones still route directly to myself and Sarah, and its business as usual for the most part thanks to the wonders of the digital era.  We’re still shipping copies of Driven By Purpose, if you are bored and would like something to read after you are done reading The Ascent of Money.   The only activity we’ve fully stopped doing for now is public talks for Charities.    Grab us as always at (226) 884 5545.

* I am very sorry to mention COVID-19 by name.  I feel like every single company I have ever done business with has sent me an email with word in the subject line. . .

The information provided is accurate to the best of our knowledge as of the date of publication, but rules and interpretations may change.  This information is general in nature, and is intended for informational purposes only.  For specific situations you should consult the appropriate legal, accounting or tax advisor.

The gladiator who upstaged the queen and Prince

Long-time readers might remember my newsletter from a few years ago where I told the tale of the queen and Prince who squandered their estates by not having wills. This month, I’m going to tell you the fairy tale of a gladiator, and how he upstaged them all with a fantastic estate plan.  If you haven’t read the original article, you can find it here or in Chapter 7 of my book Driven By Purpose.

 

Once upon a time – or more precisely about 103 years ago – a little boy was born in Amsterdam, New York, to the parents of poor immigrants from Belarus. His name was Izzy and his life was difficult, to say the least. His father was a ragman who collected and sold scraps and an alcoholic. He beat Izzy and his six sisters. Any money his father made went to buying more booze. Izzy longed for a better life.

When life was bad at home, Izzy would remember the poem he’d read to his class called “The Red Robin of Spring.” His classmates had applauded him after his reading, and it brought a smile to his heart. The warmth and joy of that moment would carry him through many challenging days while he worked to help support his family at far too young an age.   In high school, Izzy would find similar joy performing in plays. So much joy, in fact, he became determined to find a way to change his life. Later, Izzy would say that “acting is the most direct way of escaping reality, and in my case, it was a means of escaping a drab and dismal background.”

Because he had no money to his name, going to school for acting seemed impossible. Filled with burning passion, Izzy talked his way into the dean’s office at St. Lawrence University and convinced the dean to loan him money to pursue a degree. He worked two jobs, as a janitor and a gardener, to pay back his loan and he won a scholarship to study drama. It was not an easy life, but it was much better than the one he had known.

Living on the margins as a young actor was tough, and so Izzy often had no money. His friend from acting school, Betty, would later comment that she was shocked to discover that he once had himself arrested and put in jail so he could have a place to stay because he had no money to afford rent. Betty later gave him her uncle’s old coat to help him make it through the winter – for which Izzy was thrilled and grateful.

When the war came in 1941, Izzy joined the Navy, and served in communications until 1944. After the war, he returned to the USA and began his career in acting. Izzy decided it was time to change his very Jewish name to something more anglicized – and it (sadly) opened more opportunities. He went on to be the leading man in many Hollywood productions, including his best-known film, in which he played the most famous gladiator in history – Spartacus. This role was so famous, he stole the movie’s most iconic line, “I am Spartacus” for the title of his autobiography.

That’s right – Izzy became Kirk Douglas. He passed away just a few days ago.

 

A need to repay

I had to chuckle at some of the headlines that came out shortly after Kirk’s death. An incredibly charitable man, he never forgot the poverty and marginal life he came from and his estate plans involved giving away almost all his fortune to charitable causes. A day or two after his death, the internet was filled with headlines that missed the point by a wide margin. Here are a couple of my (misleading) favourites:

“Kirk Douglas snubs son Michael and other children, donates most of his $80M fortune to Charity”
(meaww.com, Feb. 23, 2020)

“Kirk Douglas’ 61M fortune given mostly to charity, none went to son Michael Douglas”
(foxnews.com, Feb. 23, 2020)

A few articles, however,  talked about Kirk and his wife Anne’s long history of philanthropy, a cause that their children also support.  His son Michael – also deeply charitable – is worth an estimated $300 Million himself.  I suspect it is fair to guess that he won’t be missing out after all.

Kirk and Anne created their charitable foundation –  the Douglas Foundation – in 1964, making it one of the very first charitable endeavours by Hollywood royalty. The foundation focuses on children’s healthcare and alleviating child poverty. As well, it offers a university scholarship program for underprivileged students. During their lifetime, the Douglas family donated tens of millions to the foundation and now, at Kirk’s death, they’ve donated even more.

Like so many people I’ve worked with, Kirk Douglas’s passion for philanthropy was driven by an overwhelming need to give back and lift up those who are in the same position of need he was as a youth. As he himself once said, “Sometimes, the thing that ties you down sets you free.” I can’t think of a better way to sum up his thoughts on philanthropy.

 

The contrast between the gladiator, the queen, and Prince

Unlike other famous celebrities such as Aretha Franklin and Prince, Kirk Douglas seized the opportunity to plan his estate and ensure his legacy is one his family will be proud of for generations. Today, only a few weeks after his death, word is spreading that he will make a huge impact, particularly for vulnerable youth. Meanwhile after nearly four years in litigation, both Prince’s and Aretha Franklin’s estates continue to slowly wind their way through the courts.  What an incredibly stark contrast –  I’d say the gladiator has once again shown royalty the right way to live — and to die.

 

We will remember you Izzy.  Like Spartacus, you can rest easy knowing that  all of the children you’ve spent your life helping will now know the freedom of which you dreamed.

Ryan

PS – Remember Izzy’s friend Betty?  You probably know her better by her stage name – Lauren Bacall.

Not all heroes wear capes…

If you’ve been waiting to read Driven By Purpose in e-book format, it is now available on AppleAmazon and Kobo!  Your best quality and fastest source for a physical book is still to buy from us directly at www.drivenbypurpose.ca, or borrow a copy from the London Public Library.

 

 

A few days ago, my good friend Zack called to ask if I’d mind doing some babysitting for him. While that may not sound too unusual, it might amuse you to know that Zack is 48 and his son is a teenager, well past the age where he needs supervision. It was, in fact, Zack himself who I was to babysit after he’d been sedated for a minor dental procedure. Ultimately, I agreed – partly due to our long friendship and, more importantly, as he promised I could record any half-conscious conversation he attempted to have with me as he woke up. I’m not sure he knew what he’d agreed to …

Much like my assistance to Zack, the last few weeks have been a strong reminder of the importance that caregivers play in our lives. My dad recently had some fairly significant surgery. My sister and I spent much of the last two months assisting him as he recovered in the small rural community where I grew up. My sister – with two months of banked vacation – took much of the heavy lifting on her shoulders this time. She essentially moved in with dad for nearly a month. We were fortunate that she had the flexibility with her work and was able to work remotely as well. Not all families are as fortunate to have the ability to continue to have income while providing care.

Caregiving can be a heavy burden, both financially and physically. As long-time readers might recall, February 13th marks the fourth anniversary of my mom’s death. My dad spent nearly three years caring for my mom as her health declined throughout her cancer’s progression. Were it not for St. Joseph’s Hospice, I don’t think dad would have been around for us to take care of. Hospice, thankfully, was able to take on the heavy-duty care my mom needed, relieving dad who, like many caregivers, put his own health and welfare aside in order to look after mom. Almost all of us will become a caregiver at some point in our lives and even more of us will find ourselves in a situation where we need some help making it through a day.

Caregiving has an unfair cost structure

Quality caregiving is often cheaper than acute hospital care. Despite this, precious few resources are available through provincial healthcare. Some limited nursing and other supports are available for home care, but the majority of services have to be paid out of pocket or performed by friends and family.

As an excellent example of this, when my mom was in hospice, one of the statistics that always blew my mind was that OHIP only covers about half the cost of a hospice stay. The other half is raised through fundraising. This is despite evidence that palliative care in a hospital setting runs upwards of $760-1100 per day, compared to $460 per day in hospice. A hospital stay is 239% more expensive to fully fund than a hospice stay. Unlike in hospital settings, OHIP covers only the direct patient care costs at hospice. Other overheads such as food, facility costs, etc., are not paid. Fortunately, the province has been working to create more hospice beds, but the burden still mainly falls on local fundraising efforts to build and implement facilities.

Hidden costs are even more important

Beyond all that are the expenses paid by a caregiver, who may be driving longer distances than usual, eating out more often, or covering incidentals. While each expense is tiny, the overall price can be in the thousands – and most caregivers, providing out of love, rarely ask for reimbursement. We do what we do as a sign of love – but as the saying goes, love ain’t always cheap!

In my experience, the price is more often paid by those who perform the role of caregiver to a loved one, rather than by the person in need of care. One relative of mine retired three years early to look after her mom and aunt. Since she had a pension plan that provided 2% per year of service, it meant that she took a 6% hit on her pension for the rest of her life. Over her lifetime, that meant a cost of hundreds of thousands of dollars.

As a financial planner, one of the most interesting, and seldom discussed, parts of caregiving is the “hidden” costs. We often think of costs in terms of facility or nursing costs, but these numbers are only part of the story. As important as these costs are (which are often the costs covered by long-term care or other health insurances), they can pale in comparison to other hidden expenses.

Caregiver compensation can be fraught with issues

Unfortunately, providing your personal caregiver with compensation can get challenging. While compensation for incurred expenses is tax-free, any payment to cover the time of your caregiver is taxable income for them. This is why many family members do not charge for their services – voluntary gifts made to family members while alive or through your will are tax free in most situations.

Additionally, there is an inherent potential for conflict-of-interest challenges if you decide to name a caregiver as a beneficiary of your estate. Many lawsuits have ended in the courts with allegations that the caregiver unduly influenced the ill person to provide them compensation. It is not just individuals who have to be aware of the conflict-of-interest potential. Imagine the potential for conflict-of-interest for a charity that is providing caregiving support, but is also asking for donations to be able to support their programs. These organizations almost always have strict policies and procedures in place to ensure that vulnerable patients are not placed in a difficult situation.

Planning for caregiving isn’t just about you – its about those around you

For those of us in the sandwich years, when taking care of our elders and our children, it is very important to understand and realize the hidden costs of providing care. Caregiving can have a major impact on our retirement and even our own health. If, like my sister and myself, you see yourself providing care for someone, it’s best to talk to your financial planner sooner rather than later to see what impact caregiving may have on your own plans.

On my end of things, I’m thrilled to report that my dad is doing exceptionally well and is on the mend despite a few challenges along the way. I also managed to get Zack home from his surgery in one piece, despite a moment when he tried really hard to knock out a few more teeth by tripping up a set of stairs. Nevertheless, it’s probably best for all of us that I didn’t go into healthcare as a profession!

All the best – and remember, March 2nd is the 2019 RRSP contribution deadline for readers below the age of 71.

Ryan

My son and Superman

How the lessons we teach stick for life

This year during the holidays, my wife Bridget and I realized that we have reached a stage where very soon, we are going to be the two shortest people in the house. Our two older sons are now well over six feet tall and soon will surpass me in height and tower over their mom. It just a matter of time until our youngest will hit his growth spurt as he turns 10 this year. We stopped to wonder where the last 15 years have gone, and realized in another 15, there is a good chance that we will be spending Christmas with grandchildren.

We reminisced about when our kids were toddlers – it’s hard to imagine that they were ever so small. That said, it’s the experiences they had at such a young age that make them into the kind, considerate and caring young men the are now.

The lessons we teach stick for life.

When my oldest son Brennan was four years old, we went shopping at the mall a few days before Christmas. Four is the age where your child is still filled with wonder and longing, and yet still holds their parents in the highest regards. It is a magical age, where you watch your little one grow and interact with the world around them in the most enjoyable ways. As a parent, few ages are more fun.

There is a dark side to having a four-year-old, however. It is when you make your first real parenting mistakes that you come to regret. I’m not sure what possessed me to think that a trip, days before Christmas, with an excited four-year-old, to a place in which every single storefront was essentially the modern version of the wicked witch’s gingerbread cottage from Hansel and Gretel was a good idea. Every store in that mall was designed to lure children in so parents would be forced to spend gobs of money on toys in order to leave with happy children.

My nightmare parenting moment began when Brennan was taken by the siren call of a two-foot tall Superman action figure, that cost $25, in the window of one such store. He absolutely begged me to buy it for him. When I gently said no, he had a breakdown of near epic proportions that only a four-year-old, days from Christmas, could pull in a highly public place.

Once he finally calmed down, realizing that there was no way in heck I was going to buy him the toy, I saw this as a great opportunity to teach him about saving money and working towards a goal. I told him that he could buy it himself, if he worked to earn money and saved enough. Strangely, this seemed to settle him right down. He asked me what he could do, and we set him up with small chores around the house for which he could earn 25 cents each.

January flew buy and our little capitalist became quite the household helper. He’d put dishes away. He’d vacuum a floor. He’d ask to go visit his grandfather since “Papa would give him money.” By the beginning of March, Brennan had accumulated the $25 to buy his beloved toy.

Together, we excitedly drove to the mall with a small zip-lock bag of his money, which he was very proud to have earned by working. We walked into the mall…

…and the store was gone.  Yep.  Closed down, out of business, and gone for good, along with the really super cool Superman toy.

it was an epic parenting fail.  All that was left was a heart-broken four-year-old with $25.

Our saving grace was that Zellers in the mall was having a massive toy sale and Brennan was able to grab a pile of discounted Diego the explorer toys with his $25. He left the mall relatively happy, albeit somewhat bitter that a toy store had gone out of business. On my part, I was just thankful that he wasn’t mad at me for making him work for something only to have it be gone forever.

That said, over a decade later, my son has become a chronic saver; he works hard to put money away. Despite the early disappointment, he has developed a mindset for saving that is going to be a huge asset for life. Likewise, his brothers both do the same – in fact, our middle son, Liam, recently managed to save up $500 by the age of 13 to purchase a specialized drawing tablet for his animation work. He’s immensely proud of his accomplishment, as are we.

We’ve also realized that it’s not just that lessons learned at a young age about saving, but its also many other things as well. Our kids have become compassionate and generous young men. Part of that learning was from having them give away some of their toys each year at Christmas to a local women and children’s shelter. While that was a tough thing for them to do at the age of four or five, it helped open their eyes to the world around them and to the fact that sometimes others have greater need than they do.

Who were your inspirations?

I would love to hear from you, our readers, as to who inspired you to become a saver or a giver at a young age and how that inspired the way you look at the world today. If we have enough people, I’d love to put together a newsletter sharing your stories later this year.

Drop me a line at ryan@quietlegacy.com with your stories. And, who knows? Maybe together we can help write the sequel to Driven By Purpose with stories about people who have inspired us in our lives.

All the best for the new decade!

Ryan

The information provided is accurate to the best of our knowledge as of the date of publication, but rules and interpretations may change.  This information is general in nature, and is intended for informational purposes only.  For specific situations you should consult the appropriate legal, accounting or tax advisor.

How to avoid a degree of misunderstanding in your holiday gifts.

 

As we come to the end of the year, I always like to share an interesting story of a charitable gift.  Normally, we tell the story of someone we have worked with over the last number of years, but this time we’re going to share with you the story of Peter Allard, a wealthy lawyer and philanthropist who, in 2015, donated $30 million to the University of British Columbia.  In return, as part of the Gift Agreement, UBC agreed to permanently name the Faculty of Law after him, and “exclusively use ‘Peter A. Allard School of Law’” on all degrees issued by the Peter. A. Allard School of Law in the future.  Prior to this, Mr. Allard had donated over $11 million towards the construction of the law school’s building as well, which is also named after him.

At first, everything went smoothly. Any law degrees issued by the School of Law bore Peter Allard’s name, as per the agreement. However, as is the case at many universities, many graduate degrees are not awarded on a department level, but instead from the Graduate Studies department. In UBC’s case, this happens to include both Master and PhD degrees, which, unfortunately, was not clearly understood by Mr. Allard at the time of his gift.

About a year after the gift, Mr. Allard expressed his concern that his name was not on these “outside” law degrees, and felt they should be, in light of the wording of his gift agreement. The university countered that the degrees in question were not, in fact, issued by the Peter. A. Allard School of Law and felt as such they should not be printing his name on the degrees. The parties attempted to mediate on the matter and eventually talks broke down.

This past September, the whole matter landed in arbitration. The arbiter, after reviewing the case, found on behalf of UBC and indicated that the wording of Mr. Allard’s agreement was essentially requiring his name on any item that previously said, “Faculty of Law”.  Since the degrees in question had never been granted by the Faculty of Law, but instead the Faculty of Graduate Studies, the gift agreement did not require UBC to name him on the degree certificates. The arbiter went on further, to indicate that the issue was that Mr. Allard had an honest good faith belief that the degrees in question were issued by the Faculty of Law, but never verified this belief prior to signing the agreement. It was a difficult pill to swallow, and Mr. Allard has appealed this ruling to the BC Supreme Court. It will be interesting to see if the court chooses to rule on this matter.

Much of the media coverage on this case has largely been unsympathetic to Mr. Allard, with many stories and headlines implying that the matter revolved around his ego, rather than the wording of the gift agreement. I’m not sure this matter has helped Mr. Allard’s brand going forward, but time will tell.

For the many people that we work with, who would rather keep the lights on for someone in need, rather than put their own name in lights, Mr. Allard’s story has some strong learning moments.  While our clients may not have $40 million to donate, a gift agreement can be a key way to ensure that donor wishes are able to be met.
The donors that I have worked with over the many years of my practice all have had very legitimate concerns about how their money will be used and for what purposes. Gifts won’t happen if these donor concerns are not sufficiently addressed. Additionally, it is important that charities are upfront and very clear about what they can and cannot do. A well written gift agreement is a blessing for both the giver and the receiver – but it is important that both parties fully understand the donor’s intent, and not just make assumption.

The importance of a gift agreement for large gifts

 

Larger gifts (say over $25,000), normally come with some kind of gift agreement between the donor and the charity. A well written agreement ensures that both parties are “on the same page” in terms of understanding where the donation will be directed, and what terms and conditions may apply. It is very important to realize that in order to receive a charitable donation receipt, the donor must relinquish all control over the funds. Even more important, is to realize that both parties will be irrevocably bound to the terms of the gift agreement after the gift is made. Neither the charity nor the donor can change the purpose of the gift afterwards, without a court intervention, known as a Cy-Pres application. The gift agreement can be legally enforced by the donor if the charity fails to hold up its side of the bargain, although, in the case of Mr. Allard, the donor might not like the eventual legal ruling, or the costs required to bring it to court. That said, it does provide a measure of security to the donor to know that the gift will go to its intended purpose.

Ryan’s Rules for happy gifting

I have a few basic rules that I think every gift agreement should address or contain to ensure everything goes smoothly for all parties: 1) Clearly name the intent of the gift in as plain and simple language as possible. 2) If timeframes are involved, clearly specify them in terms of years/months. 3) Have a “parachute” clause where the purpose of the gift can be changed if the reason for the gift no longer exists or is relevant. This clause should have an agreed method for determining what the next closest purpose would be. 4) Clearly state any “do not go there” restrictions that you might wish to have in place. 5) As a donor, be open to wording to help give reasonable flexibility to the charity. 6) As a charity, be open to wording to help ensure the donor’s intent can be fully realizedand spend extra time to ensure you truly are on the same page. In my experience, (5) and (6) are perhaps the most important parts of the agreement. Clearly, Mr. Allard and UBC needed better communication at the outset. I’m sure the reputational damage and risk to both parties is something that could have been avoided with clear communication at a much earlier date.

One gift that keeps on giving…

 

For us here at Quiet Legacy, our greatest gift has always been our time we spend with you. I’m pleased to say that since 2012, we have been involved in about $30 million in total gifts from the clients we have worked with. That’s an astounding number, and it is the single most important metric we use to measure the success of our financial planning practice. Together, we’ve helped our communities do remarkable things. I look forward to doing even more as we start the next decade. We owe it all to our remarkable clients who continue to connect us with others for whom community and philanthropy are key personal values. In the meantime, if you haven’t done so already, I hope you will pick up a copy of my new book, Driven By Purpose (www.drivenbypurpose.ca), and be inspired to make the world a warmer and kinder place.

All the best this holiday season to you and your family – thank you for your readership, and your generosity to the many wonderful organizations and causes that you support each year.

Ryan

 

The information provided is accurate to the best of our knowledge as of the date of publication, but rules and interpretations may change.  This information is general in nature, and is intended for informational purposes only.  For specific situations you should consult the appropriate legal, accounting or tax advisor.