Strategic Generosity with Adam Malcolm

TRANSCRIPT:

“We are people in the arts who are overwhelmingly empathic. Overwhelmingly, people who care. We tend to be ones who give, give, give. We got to remember, you know, you can't pour from an empty cup.”

Let's talk about how to be strategic in your generosity. I'm Heather Kelly, and this is an episode of High Five where I bring a guest to give us an insight or inspiration or, piece of information that helps arts leaders and creative entrepreneurs do the work we do. And be who we want to be in the world. And with me today is Adam Malcolm, who is a financial planner that's focused on helping people go from successful to being generous. Welcome, Adam.

Hello. Thanks for having me, Heather. It's good to be here.

You have a couple of tips for us on how to be strategic with your generosity.

I do. Over to you. Yeah. So the first one, and I think this is one that a lot of people neglect is that you have to be generous to yourself first.

We're people in the arts who are overwhelmingly empathic, overwhelmingly people who care. We tend to be ones who give, give, give. We got to remember, you know, you can't pour from an empty cup. So it's as simple as that, as that first tip is to be generous to yourself.

What would be the next thing that you would advise people in their strategic generosity? Well, I think the word strategic is right in it is to actually be strategic in your planning. You know, I think that a lot of times most people they approach financial planning from a perspective of, really basically and graphing situation or, calculator.

You know, if I save X for y amount of years, I'll be left with Z. And that's all I kind of really need to worry about. It goes beyond that to the point of goal planning, ideation to the point of strategy. So it is really that idea of being strategic and understanding. That level of it. A lot of times, creative entrepreneur is as an example, you know, our lives are not in linear lines, right? I was an artist. I'm still an entrepreneur and a business owner. So traditional advice, you know, save this much money for this amount of time may not be relevant. If you go in situations where your business goes in certain cycles. So a very easy strategy for that as an example, would be something like a percentage based savings plan. You save a percentage during times when lean and then a larger percentage when times are fat, so to speak. That's great. And it's a little different from the advice of 10% no matter what. Right. That actually is much more dynamic.

And you also spoke about like creative entrepreneurs. It feels a bit like a business, right? It is a business.

Yes. That's a very important thing to note is, you know, you are a business and you should think like a business, right? One of the things that traditional business owners, are advised on, and I encourage even creative business owners to think about, is what we call exit planning. So you're going to have an exit from your business.

At some point you will either sell the business potentially if it is salable. And you need to start thinking like that in terms of, okay, well, what do I need to be doing now to effect that sale down the line, especially because, you know, on average, business owners have 75 to 80% of their entire net worth in that business.

Think about all of the, the money and the time, everything that you put into it. Wouldn't you like to see something from that? If it's if it's possible. But on the other side, you know, even if your plan is to have this forever, well, then your exit is estate planning, and you still need to be thinking of what that looks like.

You don't get to choose that. There's no exit involved. Life will sometimes make that choice for you, and it's important to plan around that. Yeah, that's a really good point and planning ahead for that. What would your next step be? I can't tell you the amount of times that I see people being overwhelmingly generous with cash, and I love that.

Cash is a fantastic way to give. It is also the single probably worst way that you can give. There are so many other, you know, methods, strategies and tax advantages to doing things like donating of securities as an example or donating of life insurance policies. Yes. By the way, you can donate a life insurance policy. This is the first time you're ever hearing about this.

So going back to my previous point about thinking strategically is think strategically about how you're going to give not just, you know, where you're going to give, who you're going to give to. Just really think of all of those different elements. And that also is is community and arts and also family. Right. How what would you advise on that?

You know why when it comes to family, some of my favorite client families are ones who give as a family and over whelming Lee. They use a vehicle which is called a donor advised fund. Very simple way to think about a donor advised fund, sometimes called a DAF, is it's basically a very simplified version of a foundation.

You know what you think, Foundation I get it. You think huge charitable vehicle, multiple millions. You think of the monopoly man, right? You think of that old school philanthropist with a capital P, but a donor advised fund is much more approachable, and it doesn't require multiple millions to do. But when you're talking about a family, the benefit is you can have a structure where, say, grandma, grandpa, or mom and dad can fund the donor advised fund, but then the entire family can sit around the dinner table and decide, well, who do we want to support in the arts this year?

The other great benefit of the donor advised fund is that it survives. After you do so, you can basically bequest that maybe you're the donor advisor while you're alive. Then your kids take over afterwards, and then they become the primary donor advisor and then their kids do. So I love using that. And I have one myself as an example.

And that's exactly how I think of it, is that in my situation, I don't have kids and I don't ever plan on having kids, but I have this vehicle set up that when I pass on, there are people in this case, the Toronto Foundation, which is our community foundation in the city, who will further my legacy for arts and culture that is so powerful.

And what's really bringing is this strategic generosity unlocking abundance in the arts, in community and for yourself. Great note to end on. Thank you so much. Thank you. Where can people find you? LinkedIn is the big one these days. Although I am going to be relaunching a newsletter relatively soon. So you can also send me an email at my first name drop my last name at IG dot CA.

Stay tuned for another episode of High Five next week. Thanks so much for being here. Thank you.