As the charity sector continues to change, it is time for us to consider new approaches. I am thinking about the merit of the charitable sector having its own brokerage and wealth management firm. For over 50 years, MD was the brokerage for medical doctors in Canada. It was recently bought out by Scotiacapital. The press release associated with this change indicated that doctors needed a more robust financial solution associated with managing their assets with a financial institution. The Ontario Teachers have also had an independent, collective, pension plan.
It is clear that other professions have benefitted from having a collective financial solution that is sensitive to the particular needs of that profession. If the charitable sector had its own firm, and operated like the Teachers Pension Plan, it could really tackle private equity, accredited investor opportunities as well as allow for easier charity mergers.
As part of this unified model, the brokerage house could set certain time limits such as a 5 year non-redeemable for part, and a three year non redeemable subject to a little larger fee. This does not just have to include direct servive provider charities, many private foundations could also benefit. This level of financial sophistication is not currently available with one, single institution and could benefit us all.
At Link Charity we now manage around $50 million, do our own investing as a board, and we have an 18 year record of averaging better than 8% net income for the donor plans we manage. We would welcome a collaborative brokerage approach that included our investment pool attractive for part of those funds.
I am interested in the recent news from the Ontario NonProfit Network as well as the establishment of the Common Good Retirement Initiative. Both of these initiatives are valuable. It is interesting that the big banks and investment houses have not yet stepped into this space.
I believe the time is now for the charity sector to act together to find one single solution. Link Charity is open to being part of this larger effort. Let’s all come together to make the charity sector stronger.
Link Charity Founder and current Board Chair Harry Houtman has been in the philanthropic charitable world since the mid 1970's. Link Charity started in 1998, and is a registered charity providing valuable service operating as a 'link' between donors and their charities. Link Charity offers service, tools, education, and guidance in gift planning for individuals and for charities. In its latest fiscal, Link Charity provided $10.7 million to 788 charities in Canada.