Your Neighbour to the North: Canadian Resources for US Prospect Researchers

 

Canada and the United States of America are two nations that share many similarities, but also a handful of key differences. Canada’s population is only 10 percent of the U.S. population (35.1 million versus 326.5 million); Canada has a prime minister rather than a president; Canadians measure their driving distances in kilometres rather than miles; and the Canadian dollar is persistently worth less than the U.S. dollar (one “Loonie” is currently worth about 75–76 cents in U.S. currency).

Despite these differences, Canada has always followed in the footsteps of the United States in the world of business and philanthropy, and we continue to look to our neighbours and friends to the south to model the best practices in major gift fundraising.

As a U.S.-based prospect researcher conducting research on a donor or prospect who resides in Canada, you’ll need to be aware of some subtle differences on how we do things north of the border — including the Canadian equivalents of the U.S. resources you’re used to employing in your work.

Public Companies

When researching Canadian prospects, you will undoubtedly be looking at individuals affiliated with publicly traded companies. You’ll find the public filings you usually retrieve via EDGAR (with information on compensation and shareholdings) on two key Canadian websites:

1. SEDAR (System for Electronic Document Analysis and Retrieval)

SEDAR provides access to all the documents that Canadian public companies (those traded on a Canadian stock exchange, primary the Toronto Stock Exchange) are required to file under securities legislation, including:

  • Annual Reports
  • Annual Information Forms
  • Proxy Circulars or Management Information Circulars (the equivalent of the U.S. Form DEF14A)

2. SEDI (System for Electronic Disclosure by Insiders)

SEDI provides a searchable database of all the transactions that company insiders are required to report. An “insider” is defined under Canadian securities legislation as:

  • (a) a director or officer of a reporting issuer
  • (b) a director or officer of a person or company that is itself an insider or subsidiary of a reporting issuer
  • (c) a person or company that has beneficial ownership of, or control or direction over, directly or indirectly, securities of a reporting issuer carrying more than 10 per cent of the voting rights attached to all the reporting issuer’s outstanding voting securities
  • (Source: Securities Act, R.S.O. 1990, c. S.5)

Both sources are easy to search by company or individual name, although the insider transactions reported on SEDI will take some practice to interpret; follow the link to “View Summary Reports” for the most useful view of an individual’s trading history.

Private Companies

Resources for private company data (including estimated annual revenues, number of employees, etc.) is available via a number of resources, and every Canadian prospect researcher has their favorites. Some of the more popular resources include:

If you’re interested in estimating the wealth of an individual with ownership interests in private companies, keep in mind that valuation multiples and rules-of-thumb from the U.S. marketplace are not directly transferrable to Canadian companies and must be discounted. A good analogy is to consider the differences in residential home sale prices across different markets; the busier and more competitive the market, the higher the number of interested buyers and the higher the prices paid. The Canadian market is a smaller one than that in the United States, and a retail business serving the Toronto market, for example, might command a lower price than one serving a larger U.S. urban region. In general, discount the valuation results obtained from applying a U.S. multiple or rule-of-thumb by 10–20 percent; a 15 percent discount is recommended.

Private Foundations

The CRA (Canada Revenue Agency) is the Canadian equivalent of the IRS, and is the governing body that regulates all Canadian foundations. The CRA recognizes three types of registered charities:

  • charitable organizations
  • public foundations
  • private foundations

Further details can be found online on the Canadian government’s website.

The CRA’s Form T3010 is the equivalent of the U.S. Form 990PF, and the CRA maintains a searchable database of charities that provides easy access to these filings. Form T3010s (otherwise known as a “registered charity information return”) must be filed annually by all registered charities and disclose:

  • Description of programs and activities
  • Directors/trustees
  • Financial information – assets, total gifts to qualified donees and other Registered Charities
  • List of Qualified donees (which can be historically incomplete)

Under Canadian legislation, private foundations must make annual disbursements of at least 3.5 percent of the total assets held exceeding $25,000 that are not used in charitable activities or administration.

Grant Connect provides affordable access to a database of over 10,000 Canadian foundations, 550 corporate giving programs and more than 300 government grantors, which you can search by:

  • Name of director/trustee
  • Area(s) of granting interest
  • Awarded grants
  • Geographic region of interest
  • Type of funding

Charitable Giving

You’ll probably want to know what gifts your Canadian prospects have made to other charities. Apart from the usual Google and media searches, there are two information vendors that cater specifically to this need by providing searchable databases of charitable giving.

Prospect Research Online (PRO) offers access to VeriGift, iWave’s own database of charitable gift donations, recipients and donors; and it covers Canadian charitable donations and political donations.

CharityCan is another great option. Donation records are aggregated from Canadian NOZAsearch records, which have been gathered from publicly available websites across the internet and the “gifts to qualified donees” section of the T3010 charity tax filings from the Canada Revenue Agency.

Wealth Screening

Here’s the bad news: The kinds of wealth screening services you employ in the U.S. market just aren’t available in Canada. The relatively small size of the Canadian marketplace and the more stringent privacy legislation is effect in Canada makes it unlikely this will change any time soon.

Here’s the good news: If you’ve identified a need to conduct wealth screening of a large number of Canadian residents, there are still some good options available. The Toronto-based company Environics Analytics offers two good tools that can get you most of the way there.

  • PRIZM is a demographic segmenting tool that classifies your constituents into one of 68 socio-economic groups.
  • WealthScapes provides demographic (neighbourhood-average) financial estimates by drawing on more than 30 resources, including the Bank of Canada, Equifax, Statistics Canada and others. Some of the variables provided include:
    • Household income
    • Discretionary income
    • Neighbourhood net worth
    • Total assets    
    • Total real estate value

Note that getting effective results using both tools requires having current home addresses for your constituents.

Real Estate

Finding reliable resources for real estate values remains a challenge in Canada, as Canadian privacy legislation prohibits information vendors from ascribing ownership of a specific property to an identifiable individual. Your best options remain using the demographic information sources listed above, or determining the values of adjacent or comparable properties. Some free real estate valuation resources for the latter include:

  • www.realtor.ca offers a searchable database of properties for sale, which you can search by postal code or other criteria, for comparable properties.

Taxation

When pursuing philanthropic gifts from Canadian prospects, you’ll need to understand what income tax considerations are available to them. Under Canadian tax legislation, donations of cash, goods, land, or listed securities to a registered charity or other qualified recipients are eligible for a charitable tax credit.

The CRA’s publication P113 covers the tax credits available to Canadians when they make gifts to recipients in the United States.

  1. If a Canadian citizen has U.S. income, they can claim any gifts to U.S. charities that would be allowed on a U.S. return. They can claim the eligible amount of their U.S. gifts up to 75 percent of the net U.S. income reported on their income tax return.
  2. Canadian citizens may be able to claim the eligible amount of their gifts to certain U.S. organizations up to 75 percent of their net world income. They can do this if they live near the border in Canada throughout the year and commute to their principal workplace or business in the United States, and if that employment or business was their main source of income for the year.
  3. Charitable tax credit claims are not restricted to net U.S. income if the gift is to a U.S. college or university at which they or a member of their family is or was enrolled, or if the gift is to a registered university outside Canada that is prescribed to be a university “the student body of which ordinarily includes students from Canada.”

Global Philanthropy and the law firm Blumbergs offer good advice for U.S. Universities applying for Prescribed Foreign University Status in Canada.

With regard to estate giving, for deaths that occur after 2015, donations made by will are no longer deemed to be made by an individual immediately before the individual’s death, but instead by the individual’s estate. The eligible amount of a donation is the FMV of the property at the time it is donated to a qualified recipient. (Visit the Canada Revenue Agency website for more details.)

Media Review

Factiva and Proquest both offer excellent coverage of Canadian media, and a search of all Canadian sources via these tools will capture all public mentions of an individual or company.

Two of the most prominent national newspapers in Canada are the Globe & Mail and the National Post (which incorporates the Financial Post).

Some key regional newspapers include:

Other Resources

All of the resources listed above represent the tip of the iceberg! To really dig deep on Canadian prospect research tools and techniques, consider purchasing “Prospect Research in Canada (Civil Sector Press, 2016),” a comprehensive volume written and edited by the members of the Apra Canada chapter.

For an even deeper dive, consider attending the Apra Canada 2018 Conference on October 17–19, 2018, in Toronto, Ontario. We’d love to see you there!

 


John Hermans has worked in the prospect development field for 19 years. He is currently the director of advancement research for the University of Toronto’s Division of University Advancement, where he manages a team of prospect researchers in support of the University’s $2.4-billion “Boundless” campaign. He is currently treasurer and vice president of Apra Canada.

 

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Looking for more on prospect research? Download the webinar, "Privacy and Prospecting: A Canadian Perspective," led by Sarah J L Anderson, BA, MLIS, University of British Columbia & Tawnia Daughton, BEd, MLIS.

Or, check out the webinar from Chapters Share the Knowledge Webinar: Apra Canada. In this session, Tracey Church, principal, researcher and charitable sector consultant, shares ways to create productive lunch and learns with senior volunteers and leadership, using the "How to think like a Researcher" approach. 

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