EP14 Turning Wealth into Impact through Strategic Philanthropy: Malcolm Burrows, Aqueduct Foundation

Speakers

Speaker 1: Matt Knight

Speaker 2: Malcolm Burrows

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Matt Knight  00:00

Today we're going dive into what happens when a family can channel a billion dollar Foundation to support its legacy plan. We'll hear a little bit more about this. We'll dive into a bit of a conversation today with Malcolm Burrows. Welcome to Table Talk here. We really look at the stories of business, families. We look at the journeys, and guests that we bring on the show share real stories behind succession, governance, leadership, strategy and, today, philanthropy. I'm Matt Knight, your host and executive director at the Alberta business Family Institute. 

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I'm going to start with kind of a little bit of an overview of the landscape before we dive in with Malcolm. So giving is sliding across Canada 11 years in a row, it's dipping down. Every single year, people are donating less than they have before. The bright spot is donations from Canadians under 25 are on the rise. This group is the only one growing their charitable giving right now and then. So what business families are already about 55% of charitable giving across Canada, but they're already kind of, you know, under the radar, in terms of their impact and in terms of their ability to support change and support social movements. So if you run or advise a family enterprise, a lot of these things and a lot of your choices around giving matters. 

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Our guest today, spent over 35 years turning choices into impact. Malcolm's, the co-founder or the founder and executive director of Aqueduct Foundation, Canada's 13th largest Foundation. They have over a billion dollars in assets, and more importantly, they've actually deployed 900 million already granted to charities around Canada. So with this, this is this experience. He's helped tons of entrepreneurs and business families turn wealth into purpose. So welcome Malcolm. Let's dive in. 

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Malcolm Burrows  01:59

Thanks, Matt. Great to be here. 

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Matt Knight  02:01

Thank you so much. So before we kind of get into the specifics, tell us a little bit about your journey. How do you come into work at this intersection of philanthropy and family business? 

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Malcolm Burrows  02:12

It's been quite a journey. I'm a charity guy, so I've been in this space for many years, starting out in 1990 and what my first job, when I got into the space - I was working at the University of Toronto - was I was thrown into setting up this brand new program. It was the gift planning program, or Planned Giving Program. And all of a sudden, although my background wasn't in planning, it wasn't in law, wasn't in in accounting and tax, all of a sudden, I was exposed to this new world of bringing together the looking at people's wealth and helping them transition it so looking at exceptional gifts, greater complexity. And so right from the beginning of my career, I was exposed to this, and this was an area that was really taking off.

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 And so over the years, I worked for 14 years, I worked in community based charities. And I, my official employer is Scotia Wealth Management. I'm head of philanthropic advisory services, but my primary focus has been Aqueduct Foundation. So the shift and the journey was really about looking at gaps, trying to figure out work with particularly wealth creators. Work with families. Work with - because for me, the whole family enterprise world is underserved in this area. So moving to a place that I was working with donors in the community, from a charity side to working really donor or client side was a big shift to solve problems and to help people. Think about their philanthropy, think about their community impact, but it's a very practical issue when your wealth is tied up in in the family business. So that's that's become a lot of my focus is trying to figure out, how do we successfully transition wealth, but then look at the impact in the community.

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Matt Knight  04:27

Nice. So was that kind of the inspiration for aqueduct to really transform that family enterprise space into a foundational or charitable giving arm?

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Malcolm Burrows  04:38

Very much. So yeah, and the image of an aqueduct is a water carrying bridge and so on. We use, sort of an old Roman aqueduct as kind of our primary metaphor. And why an aqueduct? Well, we're deliberately -  we were the first foundation that said we're thinking about. How to transition wealth, as opposed to just be a dam. So we're not a dam, we're a bridge. And we're typically involved with large donations, what we call exceptional donations, from wealth where there's a gap that needs to be bridged, needs to be gotten over. And that can be a timing gap, it can be a technical gap. It can be a lack of clarity initially, because one of the challenges of giving is that at one end of the process you need to make a decision, because there's tax implication, there's transactional you know, you could be selling a business or something like that, or trying to figure out how to transition it within the family to the next generation. All of those are gaps that are technical issues. How do we work through that to free up funds on the other side with the family still being involved, fully involved, fully engaged, and how do we sort of break that process down? So that's one of the things that we've done that, and we deliberately focused on this as a different model that had planning embedded, but also significant philanthropic flexibility at the other end as well.

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Matt Knight  06:13

Nice. We'll dive into some of those tactics or processes in a second before we go there. And I don't know if you can disclose specifics or anything like that, but, but can you take me back to kind of the first check that you helped write with the business family, and maybe talk about some of the impact that that might have made?

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Malcolm Burrows  06:34

Absolutely so there's, there's a number of different things. I actually think back to, to my first job at the University of Toronto, working with a noted business family, and it was less than it was less. It was a significant seven figure donation. What I found so incredibly moving and was a great insight, because sometimes we get excessively focused on the technical details. We're working with other advisors and we're diving into tax considerations and things like that. And we were working with two generations. We had a founder who had recently lost his wife. He was in his mid 70s, he had adult children that were active in their business, and there was so that whole transition process, getting them involved, getting articulating what they were interested in, and they were leading a project at the university. 

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But what stuck with me forever was we had a little public event, and then the family, the father of the family, got up and shared a few words, and he was so overcome by emotion, he started to cry in public. It was at a very raw and true moment, but it spoke to just how the philanthropy, the family philanthropy, was informed by their life experience, by the loss of his wife, by this really, this desire to give back and working through all the mechanics to get there. Sometimes we forget about this incredibly heartfelt, emotional act of values being expressed in the community. And that always stuck with me, the importance of biography, the importance of people in giving, not just as a source of money, not just as a technical exercise, but really as an expression of who they are in the larger public space. 

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Matt Knight  08:49

Yeah, that's got to be a pretty big gift for you, to be able to, you know, be around that, and experience part of that emotion, you know, in your day to day job.

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Malcolm Burrows  08:57

and that it candidly, it's one of those things that years later. It's always what I've kind of looked for. It's what I've tried to say. I you know, we don't necessarily say, you know, tell me about your deep emotions up front. It's something that's revealed in the process. But I always want to help clients get there.

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Matt Knight  09:18

Yeah, so let's maybe transition to that. So, you know, a lot of our listeners are family businesses. Let's maybe get deeper into, you know what? What some of this means, kind of that, that foundations or philanthropy, 101, almost. So let's maybe start, start with the basics. What options do business families have when they want to get more strategic with their giving?

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Malcolm Burrows  09:39

Certainly. So I'll start with the baseline, because I think most business families do give. They're involved in their community, they're rooted, they're employers, they're and but there's often a sense the conversation that I have so often is this sense of being reactive. They're being asked all the time. They're, you know. They're feeling a little overwhelmed. They're giving directly. And I think the families who do it really well, often start to make choices and say, This is what we believe in, this is what we focus on. And often we'll have a mission through their business, and that's partly a management plan as well, to reduce the noise. And as I always say, say No nicely. 

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But the next stage related to this is actually looking at - because I encourage and support that direct giving, I think it's essential, but often reaching towards some sort of philanthropic or charitable structure, and that's what foundations represent. And so I often sort of differentiate that there's two pockets that you can give from. There's the cash flow pocket, and it's often giving out of the business income on an ongoing basis, out of the business, but it could be personally as well. But there's also the asset pocket, or the wealth pocket, and that's something that most people don't give much thought to, because very simply, assets are what we live in. It's what when it's a family business, it's what we live on, and so the unlocking that value. 

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But there's all sorts of very practical issues, the major donations, the really transformative donations that end up in the community, come from the asset pocket, and that's where people reach to foundations. And there's two kind of classic foundation models, the traditional private foundations, where you have your own separate legal entity. It's a registered charity. It's called Private that just means that the source of funding comes from a single, related source, family, typically, or an individual or a couple, but also means that the family is on the board. So that's sort of one classic model. This has been a tremendous growth area in Canada, particularly over the last 15 years.

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Matt Knight  12:10

And then just to back up, so not to take it away from Canada. But so an example of that would be something like the bill and me, or Bill and Melinda Gates Foundation, any kind of prominent ones in Canada. You can think of as a good example for people to think about.

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Malcolm Burrows  12:23

Oh, very much so. And this is, this is a worldwide phenomenon. It's as business values get up there, and there's, there's so many in Alberta that have, for example, just extraordinary business families that have their own foundations. And it's going and it's also something that goes back years. You look at, you know, two historical examples: Max Bell foundation in Calgary, the Muttart Foundation in Edmonton, are both 70 year old foundations, both of those are successful business, family stories that have had a huge, huge impact on the community. But there's so many modern examples as well. It's, it's, it's become an essential part of our charitable sector, in a way that it wasn't 20 years ago. 

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Matt Knight  13:21

And then the second alternative uses. So the private family foundation is kind of the one, the one main option.

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Malcolm Burrows  13:27

So looking at it in terms of - because traditional giving is you, you, I'll simplify and say, You give a check and it goes to the charity. The charity runs with it. It's a direct model, the actual ongoing involvement. So there's that it's essentially a self directed form of giving. Private foundation is sort of the classic model, but where we've seen tremendous growth, and this is what aqueduct does, is that we have donor advised funds. 

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So it's a single - we're a single public foundation. We have about 700 individual donor advised funds, and they, in some ways, mimic what a private foundation does. In some ways, we can actually do much, much more than a private foundation, partly because from day one you have an expert staff. We know how to issue tax receipts. We know how to - we do grant research. We give millions of dollars, actually over $100 million out the door each year. And so our model is providing that high level of service and support from both the planning side of things as well as the giving side of things as well, which is really important. 

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So it's - but the key message here is it's the family, the founding donor, that is really it's their wishes. So. Our short mission statement is we facilitate personal philanthropy. It's not a community based model, because there's wonderful, wonderful community foundations across Canada, over 200 of them. Our model is, is really working with the individuals about what they would like to do in the community and help get it, getting through the planning barriers and and crafting and putting together a strategic plan for impact as our donors clients define it.

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Matt Knight  15:32

So in the research for this, I kind of found three different models. So there's the DAFs, which I'm glad you explained a little bit better than that acronym. So those donor advised funds, and then we talked about the private foundation. And then there's also something that came up around a corporate foundation. What's the difference between kind of a corporate foundation and a private foundation for charity? 

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Malcolm Burrows  15:51

Right? And a corporate foundation goes back to that first direct giving model so often, and this is a very common model in Canada, is a corporation will set up their own foundation and use it as sort of a separate giving structure. Typically, it's actually a private foundation, so the single source of funding, but it can also have a whole public dimension. So sometimes it's get encourage customers to give, suppliers to give. There can be events around it. So it can be a hub of community as well as that giving. But it came from sort of, it often has a symbol. It shares a name with the family business as well. Or, you know, even public companies have this as well, becoming their giving arm, and it's actually a separate charity, but typically it's funded on an annual basis.

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Matt Knight  16:54

Okay? So that's kind of the main difference between the corporate and the private ones. Is just the funding model? 

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Malcolm Burrows  17:00

That's right, and and many private ones, it's really interesting as well that a lot of business families working with one business family that have had their foundation for over 25 years, and now they're transitioning. So they're they're selling off major assets, transitioning to the next generation. And so what was a couple million dollars a year, very significant, but it was coming out of income and going straight into the community, all of a sudden, became a couple 100 million dollars. And there's more to come. Because slowly, but slowly, they're transitioning, and they're using the foundation as it's a primary family goal, but it's also, frankly, a very practical transition tool as well. 

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Matt Knight  17:51

Yeah and then also, in kind of some of the research, you wrote an article a little while ago, and you basically had this, you know, the main message of that was, DAFs are not trusts. What does that mean? Can you go into that a little bit deeper? For me.

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Malcolm Burrows  18:06

Exactly the and this is, this is a bit of a policy wonk kind of idea. But one of the things about donor advised funds, that is, so they've been a growth area. They're not their category, and each Foundation has a different sort of philosophy and approach, but there's been the idea is that a donor is providing advice about where it's going to go. So it's actually essentially an unrestricted fund that's owned by a host Foundation, like Aqueduct Foundation, and it's not legally restricted, because if it was legally restricted and we had to follow every single one of the donors, wishes or recommendations, then it would be a trust and it but it would. And with a trust, it triggers all sorts of legal requirements, and it looks like certainty, but in our world, what we're doing is really about alignment, is making sure that the donors wishes are aligned with the foundation's wishes. So we it's not so much a permission model, but you can support anything that Aqueduct can support. 

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And so sometimes lawyers look at this and say, but what if Aqueduct decides to say, no, what if Aqueduct decides to deny it? And that's - it's not our model. If anything, we're the ones that say, well, actually, you can go further here. Did you know you can give to, you know, municipalities we can support, so we're more solution providers so it but we're not legally obliged to follow those instructions. So it's a very high trust relationship, but it works exceptionally well because. It stems from a service and alignment mentality, but it's a subtlety.

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Matt Knight  20:05

No, that makes sense. So next, so if a business family is thinking of getting into their own foundation or a DAF or, I don't know if you call them DAFs in the industry, but.

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Malcolm Burrows  20:17

I love spelling it out, donors, guys, funds, I find that it sounds too sort of almost gimmicky when we call them.

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Matt Knight  20:26

That makes sense, too. But So what's kind of the minimum, kind of like commitment, whether it's, you know, kind of that that mind share, that number of people involved, or a financial amount that they need to get into that space? 

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Malcolm Burrows  20:40

A wonderful question, and it depends on the foundation. So some foundations really look at donor advised funds as a way to get people into a slightly higher level of philanthropy and encourage and support them. But their entry level might be $10,000 and I know people that have had community, daft community foundations, and it's taken them five, six years to get to that $10,000 ice. 

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That's not our model. Our model is looking at exceptional giving. So in our model, we started a minimum of 100,000, moved to two sort of focus of 250,000 but we have Donor Advised Funds of over $100 million so the notion and so we think that in order to have something in between, essentially a charitable entity. In between, there has to be enough money, there has to be enough complexity. It's not a matter just of having a savings account that builds up over time. It can be useful. But our philosophy is to really bring together that wealth planning with the community philanthropy. So we're looking at larger events and more significant sums. 

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Matt Knight  22:04

That makes sense, okay? And then, I don't know if this is a real life scenario, either, but say you're at a, you know, going on vacation, or at a cocktail party or something like that, and you meet someone who's talking about a foundation that they're starting, what's kind of the biggest myth or biggest concern that you would have with that type of a, you know? Oh, yeah, I'm starting a foundation, like, like, what would you dig into first there.

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Malcolm Burrows  22:24

Right. It's there's so many different reasons and backgrounds. One of the great myths and and we hear this through the incredible families that have shared and their stories through Table Talk, is there's often an assumption that I think is completely wrong. Often family foundations, whether the donor advised funds or private foundation, are sold based on the myth that'll bring family harmony and I and the idea is that this isn't about us. This is about the community. This will bring out. This will bring us together. It'll raise us to a higher level. This is, and sometimes it's a success or entity for a family business, if there's a company sale or something like that. 

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And I always, and this is, I always say, do it for the philanthropy, there's some good planning reasons, and there may be an i There's nothing better than a family that comes together around a foundation of philanthropy. But don't think of foundation is somehow going to, you know, sprinkle magic pixie dust and make everybody happy and get along. There's and so I find that there's a lot of false rhetoric in this space and so I, I often will speak out against that. Sometimes I feel like a skunk at a garden party saying it. But nonetheless, well, that's a perfect one.

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Matt Knight  23:55

And that was kind of the next section I was going to go into. Is more about, you know, business families are really value driven so kind of getting into, you know, away from the dollars and into these values. So when you look at, you know, business families, often they have, you know, a goal around their their legacy, or their values, or their their dynasty, or whatever you want to call it, how do they how does structured giving, or a charitable giving or some sort of a foundation help with that family name and help get them closer to those values or that legacy piece. 

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Malcolm Burrows  24:30

No, I think that that's really important because it is part of that overall family governance structure. And it provides another table, often an extension of a current table to sit around. I'm a big structure person. The other thing is that I often sort of caution people about is don't go away on a single retreat and come back with mission, vision and values and think you're going to have a great foundation. Uh, it's important to have that North Star, but it's also important to look at, how do people come to the table, who? How are decisions made? Is this, you know, are, how are grants initiated? For example, is there particular priorities? Do you have a budget? 

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I'm a huge believer in making sure that there's reasons for all members of the family to come to the table, and that translates into the structure of discretionary granting budgets. So for example, G2 or G3 has a budget, and they can choose any charities they want. You'd like them to share, but they don't have to come to the family table and ask for permission. And I find that there's often this, this vision that everybody's going to be there, and everybody agrees. Well, A, they don't show up. B, they feel, you know, they feel like the decisions are already made. This really allows them to explore and express their interests. And it also becomes that source of dialog and positivity. 

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So it's not fighting over money. So basic structural governance like that is so valuable. And just doing and even having, you know, so different types of money, different types of grants, to me, is really important as an extension of family governance,

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Matt Knight  26:31

Yeah, and that's, I think, how you open, that was key. It's, you know, the strategic planning, or what you know, or starting a foundation, or whatever it is, is not a it's not an event. It's a process, and it takes a lot of time and effort.

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Malcolm Burrows  26:45

And anybody that runs a business. I mean, I had - back to when I founded Aqueduct. I mean, it's, I'm an entrepreneur in this space, and I had an idea, but, my goodness, you know, 20 years later, it's, it's a radically different entity, not it's still grounded in sort of the original idea, but the business plan, the problem solving, the team, building the capacity, all of those things apply to foundations as well. 

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Matt Knight  27:15

Yeah, one of my other questions in that area you hit on already was more about the, you know, is philanthropy a way of fixing sibling relationships or family relationships. And I think you already kind of not, you know, took that one off the table and that it is not and it is going to, you know, it's not just something that's going to fix this. It's going to require, you know, again, more work and that family to come together, really, to meet their goals.

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Malcolm Burrows  27:37

And, well, it's interesting. One more story related to that, because I had an interesting situation a number of years ago where a father literally set up a foundation in the will and with a tough family dynamic, and left the three kids who weren't talking to each other, who were on different continents as the over to you, kids. I'm in the great beyond you figure it out. And the way we ended up doing it was literally dividing it up into three separate pots. And what was so lovely about it is over time, because we reduced the conflict around granting decisions and charitable activities, and each of them, in their own way of being quite wonderful philanthropists. And increasingly, as well, they started to find areas of shared interest. But it started not by being forced together. It started through the separation. And then they so it's a, you know, it's, it's a process, and, you know, family dynamics are complex, but that was a place where, you know, real progress is made in terms of those family relationships because of the separate together. 

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Matt Knight  28:56

Yeah, okay, and we'll get into governance in a little bit too. But any other kind of quick tips around how you can avoid the philanthropy side or the charity side becoming almost like a new area for family struggles or power dynamics.

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Malcolm Burrows  29:12

I think that I mean having, I try and sort of build up from the bottom with, you know, strong roles and responsibilities, strong structure, as I said, and also looking at it much like you would with the business plan, is looking in achievable increments, again, sort of the mission, vision and values, kind of forever. There's often this kind of rhetoric around philanthropy, and I think bringing a business discipline to it, in the sense that in four or five years, this is what we will focus on. 

You know, again, in another recent situation, with a number of situations working with next generation leaders that are leading foundations, or in that Aqueduct sense, the donor advised funds, and they're stepping forward. It's giving them space and helping with that transition, so not trying to do it all at once, making sure that there's clarity over the next five years or so. That makes it real, and it also reduces, frankly, moments of big debate, big debate and big tension, and everybody sees sort of the action, and you create sort of the bones of the organization and the capacity, much as you would with a private with a family business.

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Matt Knight  30:40

okay? And is that I think you, I think this actually came from another article you wrote, but is that what you call, like your one pager, strategic giving plan, or is that something a little bit different?

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Malcolm Burrows  30:49

It's, it's, it's related to this, but making sure that it's, it's not just purely directional, but making sure that over the next five years, this, what we're going to focus on. This is how decisions are going to be made. This is how grants are going to be initiated. This is how we're going to evaluate and but looking at it on a five year basis, because then you can review, and it also allows for, you know, is, is the family members that are involved? Are they going to be still involved? So putting timetables on this is very, very helpful, because one of the biggest sources of ongoing tension is kind of that never, never plan. 

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And so the same sort of succession challenges that can exist in a family enterprise gets pushed out or extended to the Family Foundation, because it's often really important for I mean, it means so much to the wealth creators to be involved. But there's also, you know, that ongoing agency and community participation, so breaking it down to figure out that transition piece, to me, is really important and not letting it sort of turn into blow up events, but sort of you almost schedule, sort of moments of transition and planning, and I find that that is that often really resonates with people. 

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Matt Knight  32:16

Ok, Nice, so what was going to go into a couple other kind of, not geeky things, but more the strategy and tax and impact side of things. What's, you know, aside from, I know you talked about, kind of your annual giving dollars and things like that. Aside from that, what's some of your, you know, kind of favorite impact or impact measures, or ways to measure impact for these business families or for these funds?

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Malcolm Burrows  32:40

So I'm that. I'm somebody who takes time to build this up over time, and so we always look through the lens of this personal philanthropy, what do you want to achieve? And I find the philanthropy industry is often very almost kind of judgmental or ideological about what impact looks like. But if I'm dealing with a family who's you know has really strong faith and is really involved with their church and related missions or something like that, the impact for them will look entirely different than somebody who you know wants to work on, you know, let's say social service issues or food security in the in in sort of an urban setting. So each one, I think, needs to build up from what is, what is the value set, what are the goals of the family, as opposed to this objective measure. 

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Because we also do in our world, we don't just do granting, we do programs and things like that, and each program will end up having its own sort of impact measure. For example, we run some fairly significant community based scholarships. So going to a particular community and going to the students and saying, Where would you like to go for your post secondary education, and looking at it as opposed to an institution based one, like going to a university, you have to be accepted. This turns it around. So you can go to a small town, or one case, we're dealing with kids coming out of the family child welfare system. So these are programs that you have to analyze and determine over time, much like you'd sort of figure out what success looks like. So, I'm going to give the lawyers answers and say it depends.

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Matt Knight  34:45

Yep, that makes sense. Kind of, it's kind of expecting that as well. But in family business as well, there's this huge concept around either familyness or adjacency, where you know, if you take the family and the business and put them together. You know, one plus one is equal to more than two. And if you take one, if you take one of those two away, you know, the family or the business, you know it's going to have an impact to the value or the the you know, the harmony in that situation, in some cases, is, do you see philanthropy as fitting into that, or is it like a third part of the equation. Is it a multiplier?

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Malcolm Burrows  35:23

Yeah, I do think it's a multiplier, but I think it's a third part of the equation, and I think it's one of the tension points in family philanthropy as well. Is it about public benefit to the community, or is it about family and so back to this idea of family foundations as a place of family to sort of bring family harmony, or table for family harmony. And often decisions will be made that really limits community impact, because you're trying to make sure that everybody is on board, and that's valid. I mean, these are families, but figuring out, one of the things that I like to talk about with donors and clients is really saying, where do you want to put the emphasis? How much is about family harmony and how much is about impact? And that may change over time as well.

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Matt Knight  36:18

Okay, so we're going to dive into governance right away. Before we get there, I'm gonna try something brand new. So you're the first, the first guest who's gonna do it. We're gonna do a bit of a lightning round. So I'm gonna do five quick questions, super quick answers. You don't even, you can't even explain them any more than that. So first one:

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Matt Knight  36:35

Endowment or spend down. 

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Malcolm Burrows  36:37

Spend down. 

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Matt Knight  36:38

Okay, biggest charitable myth in one sentence,

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Malcolm Burrows  36:43

Family Harmony.

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Matt Knight  36:44

Okay, favorite under the radar charity that you admire or have given to personally

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Malcolm Burrows  36:53

fascinating startup called madeiro, international startup,

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Matt Knight  36:58

impact investing, fad or future?

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Malcolm Burrows  37:02

Both 

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Matt Knight  37:03

Okay, and then one philanthropy buzzword you'd like to get rid of forever,

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Malcolm Burrows  37:12

probably strategic philanthropy, even though I used it earlier, okay,

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Matt Knight  37:19

so back into governance. So we talked a little bit about that board model and how there needs to be governance in this philanthropy process. What works best for families in that philanthropy side of things, in a foundation side, should it kind of be independent? Should it be part of the operating board? Should be part of the family council? What's the best practice there?

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Malcolm Burrows  37:40

It will depend on - I often look through lens of age and stage of both the business, where the family's at, as well as the foundation. And so I think each of those locations make sense. My bias is more towards the family. It's sort of back to sort of that, that Venn diagram that you were, you were sketching out of family and business and philanthropy, I would say that it's probably closer to family. Philanthropy is probably closer to the family, you know, because of the and often those values are expressed in the business, of course, but it's, it's often grounded in the family and the family experience, and there's often a desire for that ongoing, sort of ongoing participation as well. 

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Matt Knight  38:36

Yeah. No, that makes sense. So you talked earlier about how you know, kind of the donor advised funds that you have, and some of the things you're doing at Aqueduct is sometimes a really good, almost learning experience for those next gen leaders as they're coming up. And, you know, we talk a lot about, you know, training and education for owners and for family business members. What kind of opportunities are there in these in the charitable side to kind of build capacity within the family system.

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Malcolm Burrows  39:03

There's a lot, and again, it's sort of done on a family by family basis, but figuring out sort of, it's, it's, you know, working side by side, developing sort of granting systems and approaches, putting together programs. I like to do things, not theoretically, but through action. It's about implementation. I think people learn experientially, and so creating that direction, and having people dive in and giving them enough autonomy to implement. So it's back to this notion of, sort of, could be granting budgets, but it could be around individual programs as well. And it's wonderful working with family businesses where, you know, we'll end up working with, you know, one case, we have three, three brothers, and. And, but one leads on it. This is and, but they're all there in council, but just as in a family business, they have different responsibilities. It's true in the philanthropy side as well. 

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Matt Knight  40:14

And is that kind of the model that you use to get away from, almost like divided interest. So if one or two siblings or one or one or two parents or whatever it looks like, you know, really want to give to, you know, climate change, and the other one really wants to give to animal welfare or something like that. Like, how do you bring them together? How do you keep that peace? 

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Malcolm Burrows  40:31

It's, again, it goes back to autonomy. And I said, it's not a one or the other. Let's not set up conflicts around this. Is that. So I use a classic sort of pie chart, saying these, this is money that we're going to make decisions on together. This is money that we can make decisions about autonomously. And so that way it's not just a battle of all or nothing, because the all or nothing battles are zero sum in terms of, I think that that family connection and long term functionality.

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Matt Knight  41:09

So going a little bit further, kind of like zooming out into more, kind of overall trends and what things are looking like. I talked a little bit in the opening about how this is the 11th year in a row that giving is down in Canada. Does this worry you? What do you think's going on? 

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Malcolm Burrows  41:25

It does worry me, but I'll tell you, classic case of what we focus our energies on, through Aqueduct Foundation is really focusing on these exceptional donations from wealth. So where we specialize is large donations that have complexity, and that other there's 86,000 charities in the country, most of them, it's a hockey stick distribution. They're small volunteer ones that are doing amazing work. There's larger institutional ones, but there's not much infrastructure. For example, we've become specialists in the nation's leader in the donation of private company shares to charity. It's technically complex. The tax rules are a little tricky, but it's where family wealth is, and how do you ensure that you can get that tax savings that you can transition to the next generation, those sorts of things. 

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That's where we've specialized. We think that these very large donations that reflect the total net worth of a family, and so that's why we're seeing, I mean, we're seeing donations, if anything, our big growth area, not numerically, because there's only so many of them, but our big growth area is 100 plus million dollar donations, and they're often in the form of private company shares. We're seeing, you know, we're having discussions about billion dollar plus donations, because this represents the value of companies, and in certain situations, how do you get them in? You can't actually give those shares and get a tax receipt to a private foundation, because there's tax rules against non arm's length transactions. You can go to a public foundation like Aqueduct. 

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So it's where we've tried to sort of align ourselves with business owners, looking at that bridging process to free up and in some cases, the money, you know, comes in as a private, private company share donation to Aqueduct, and we're a patient shareholder. We monetize, but then goes out to a private foundation in the community. We work with one philanthropist business owner here in Alberta, and they are the largest, they have a private foundation and the largest philanthropic funder in their area. And in behind, they have an Aqueduct Fund, and the estate plan is to get a few 100 million dollars into the private foundation, but they need to go over our bridge to get there.

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Matt Knight  44:10

Okay, it's an interesting angle, a pretty interesting, like strategic approach that families can take that way. So the other kind of intro thing that we talked about was with Gen Z, or the under 20 fives, being the only growing segment in charitable giving. How do you kind of earn the trust of those individuals to build what you're doing? And why do you think that is?

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Malcolm Burrows  44:34

I think it's about giving them space and respect. Is that really understanding because there can be intergenerational conflict. Different generations see the world and experience the world in very different ways. They see the problems of the world in very different ways as well, and that's why I'm a big believer in ensuring that they have autonomy that they can express. Own wishes, and allow that to be a learning experience. Because I think I have this fundamental belief that people are naturally generous. They want to give, they want to connect, and it's, it's, it's good for them, and so it's far better to stimulate that generosity impulse and let people learn through doing. And that's the way to really inspire and engage and create capacity for the next generation coming along and saying, Yeah, we don't support that. Give them a space. Give them their own room. And I, I've learned so much from working with the Gen Z donors, let's say, because they have a different worldview and experience than me. And it's, it's that kind of learning, intergenerational learning, I think it's really important.

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Matt Knight  46:01

Yeah, yeah. And their impact, or the impact of that generation, is only going to grow. 

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Malcolm Burrows  46:06

It's that, oh, yeah, exactly.

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Matt Knight  46:09

So maybe try not to put on my professor hat too much here, but a little bit of a starter kit, or almost some questions for you, you know. So a family with, you know, kind of 10 million net worth says, Hey, should we do a foundation? Should we do a DAF? Should we do an XYZ? Where do they start?

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Malcolm Burrows  46:30

I always say, tell me what you want to achieve. I was saying it's important to look at structure, but I think one of the worst sort of planning cliches is doing an either or sort of thing. You have this or you have that. I always start with, what do you want to achieve? What's your timing? Who do you want to be involved? And I always look at it as fit for purpose. So one of the things that we do at Aqueduct, for example, is say it's not donor advised funded Aqueduct Foundation or a private foundation, it could be this is a great place to start. This is a great place. There's lower entry point. We want to get the family involved. We want to start giving. We want to get to know you. We want to know this space better. And we like working with knowledgeable people in this space, but we reserve the right at a certain point in the future to have our own private foundation. It's not or it can be and so looking at it from that perspective and saying, What would you like to accomplish? And also, how involved do you want to be as well? How much sort of administration do you want? How much learning? So I always approach it from that perspective, as opposed to, you know, I think it's a really empty and unhelpful planning approach to set up donor advised funds versus private foundations or corporate for that matter as well. There's often a blend.

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Matt Knight  48:07

So it's kind of a good kind of like things they should think about before they start to get kind of more strategic in that giving, what about, you know, what's the biggest mistake that you see in that first year? Like, what? What's something that they need to avoid?

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Malcolm Burrows  48:20

To slightly flip that around is if people give, there's not going to be a mistake, because you look at it as a process. You look at that as experiential. You don't have to have all the answers at once. And if you're giving, and there's likely to be good organizations. There may be some less good organizations, but to me, it's all about again, trying to be too perfect all at once, trying to have all the answer back to this mission, vision and values paradigm, that and then leaping into very large donations, I far prefer sort of building up a community knowledge capacity understanding, because it keeps everybody learns, and it keeps the stakes lower, and it avoids major mistakes. 

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Matt Knight  49:16

Yeah, and that's one thing I think business families are really good at, is the not waiting until it's perfect, especially when, when it comes to community impact, they're, they're trying to make the community better all the time. So I think that's kind of the one, maybe the one thing for them that they could maybe be advice to avoid, is don't wait. But I don't see many, many business families doing that anyways.

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Malcolm Burrows  49:35

That's a wonderful way of articulating it, is, just do it. You know, and don't make excuses. Don't create castles in the air. Do it.

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Matt Knight  49:45

yep, and let great be the enemy of good, or whatever that cliche is. So maybe fast forward 10 years, it'd be what like 2035 which is kind of scary to think about. Now, how do you see like technology and AI? Transparency and policy and politics. How is that changing the family, philanthropy space right now? What do you think is going to happen?

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Malcolm Burrows  50:09

I think that it will continue. I view those things largely as tools, and I think that there's going to be efficiency, there's going to be more knowledge, but there's often this presumption that philanthropy should be entirely data driven, that it's all just about getting the right key performance indicators, and we'll figure out sort of whether this is a good grant or a bad grant. And I think data is important, but also those relationships of trust with organizations that you're working with. This is your, you know, a people business. It's a values based business. 

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So I think there's tremendous efficiencies, there's much greater data knowledge. I'm very excited. My team's very excited about the more data and the better systems that we have, the more flexibility and personalization we have. So we see it as a tool for personalization and a tool for pushing down and getting pushed down, sort of routine administration. So you can focus on the key things, the important things, but I think fundamentally, it's about those trusts and relationships. It's about the underlying volunteer action out in the community. That's that, we shouldn't lose that through technology.

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Matt Knight  51:37

No man, it's one of those like, it's almost the opposite of what we expect, where, you know, the bigger that data set gets, or the you know, the more and more AI and big data impacts it, the more individualized things are able to become, which is pretty, pretty amazing.

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Malcolm Burrows  51:51

Absolutely, and people giving from their heart and connecting with their heart. So.

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Matt Knight  51:56

 yeah, so kind of, one of my only common questions in this podcast throughout has been, you know, looking for kind of a book or an educational experience that you've gone through that's kind of had the biggest impact in your personal or professional life that you'd like to pass on to other business families and advisors.

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Malcolm Burrows  52:14

 Because I knew this one was coming, wonderful book. I'm a bit of a historian. I love the history of philanthropy. I like understanding where foundations come from and their experience. There's a great book called The Foundation by Joel Fleshman, who is an American writer. It's about 10 years old or so at this point, maybe 15, and I'm showing my age, but it's it's terrific in terms of both critical look at what foundations could be doing better, but also that context of where they came from, American examples, I think there's and but I've also, I've been very involved in the sector. 

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As an educator, I taught at Banff, the Banff center, a philanthropy course for 12 years. I think looking for those sorts of opportunities. There's great organizations like philanthropic foundations Canada. There's, you know, local groups like social venture partner groups as well, that local, local you know, business people are coming together to give and to learn from each other and know about their environment. So I'm I again, back to I'm a big reader, but I'm also somebody who's very experiential. I like that, like that exchange,

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Matt Knight  53:36

Awesome. So before we wrap up, any questions you had, anything you hoped we would dive into that we didn't?

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Malcolm Burrows  53:45

No. You've done a great job, Matt, this has just been a wonderful conversation. And as I said, I really admire your work at ABFI, and just the dialog you're having, I've so much appreciated the stories of the entrepreneurs, business owners, family enterprises, that you've shared through this platform. I've learned a ton, and it's helped me see my world really deepened and enriched my own world as well. 

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Matt Knight  54:18

Yeah, that's awesome. And the interesting connection here that I didn't make earlier, that I maybe should have, but, you know, ABFI wouldn't actually be around, and this podcast wouldn't exist if it wasn't for, you know, three families who, you know, whether through foundations or or elsewise, helped start ABFI, you know, over 20 years ago. So the, you know, that's kind of that, that impact of, you know, this planned giving, or however it was set up, is still having this impact today, as we go through and tell these stories of these business families as that original intent was.

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Malcolm Burrows  54:51

And if I was to do a final word that connected into that, is that I think that entrepreneurial experience, I'm a big. Believer in foundations, because I think healthy societies have multiple sources of good. I mean, government's fine and good and all the rest of it, but we need to have multiple sources of innovation, of good. And in the social space, ABFI and its founding story, and the wonderful philanthropists behind it is very much a story of seeing an unmet need, of stepping in, providing funding, and this would not exist. You would not exist, if it wasn't for this and the community of support around it. So I really see that philanthropy is also a really innovative force for change and in society as well. 

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Matt Knight  55:47

Awesome. No, that's a great way to end. So Malcolm, thank you very much for kind of sharing your experience on foundations you know, helping me dive into kind of purpose and policy and the family dynamics that involve in the philanthropy side that, you know, continue to work within the family businesses and the business families that we work with. 

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You know, I really enjoyed getting into both some of those technical elements, but also a lot of those emotional side of things, which you know you kind of mentioned at the beginning, has been one of the most impactful things, things for you over your career. So thank you very much again. Everyone listening today, if you enjoyed the conversation we've had, you know, both around those donor declines, and you know, both that and that growing impact of the Gen Z generation and the influence that they're going to have in the future. You know, maybe this is the time for you to rethink your giving. Maybe this is the time for you to become a little bit more strategic, you know, please. You know, check out some of those resources that we talked about, maybe think a little bit more about some of those dynamics. 

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And I think the biggest thing that we took from today, or at least one of the biggest things I took, which, you know, I don't think any of the business families are doing but, but don't wait. Figure out how you can make that impact. Figure out how you can grow to make that impact that you want to see in the future. 

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So if you like this conversation today, please follow Table Talk on all those streaming platforms and YouTube. You know, please share it with your friends and families and kids and foundations, whatever that might look like. And you know, if you have any questions, please connect with myself or with Malcolm. We'll put kind of our LinkedIn things in the bio as we close this off in the show notes, but thank you so much for your time today. Malcolm, I very much enjoyed the conversation, 

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Malcolm Burrows  57:25

As did I thanks, Matt..

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