Articles & Cases
Gift Planning - A Licensed Profession, By Mark Blumberg and Ken Ramsay
September 20, 2005
Will the next frontier for the Canadian Association of Gift Planners (CAGP) be the licensing of Gift Planners to raise the level of professionalism and protect the public?
The CAGP has been around for more than a decade and has made great strides in advancing the profession of gift planning in Canada. Its annual educational conference, parallel and now formal association with the Banff Centre courses, government relations initiatives, strong grass roots Round Table organizations and its forum for dialogue in the sector have done much to develop professional standards of practice. However, the time is coming for CAGP to do much more.
The original Board of CAGP understood the need for the fledgling organization to have a strong statement of ethical conduct to be adopted by all members. The main focus was and is to this day the relationships between the donor, the organization and the Gift Planner. “Ethics” is always a vital topic of discussion when members get together.
The current CAGP by-laws provide for all members of CAGP to abide by CAGP’s Standards of Professional and Ethical Practice and “professional practices of their respective professional fields”. The Ethics and Standards Committee can recommend and the Board of Directors by a 2/3 majority can vote to remove a member from CAGP for actions inconsistent with the CAGP’s Standards of Professional and Ethical Practice.
It is enlightening, however, to consider what is missing.
The challenging and sensitive job of Gift Planning lacks any required formal training or accreditation. Whereas, CAGP and other groups supply considerable educational opportunities within the sector, there is no mandated testing or certification of Gift Planners, nor supervised compliance of performance with even the ethical standards of CAGP, AFP, AHP or other fundraising associations. The Association of Fundraising Professionals (AFP) has developed a voluntary certification program, CFRE and ACFRE, which are supported and acknowledged by AHP and CAGP. This certification program encompasses all areas of fundraising and does not focus on testing neither the complexities of Gift Planning nor the sensitive area of competency of older donors. Most importantly, it is voluntary and not a pre-requisite to working as a Gift Planner.
Comparisons to other industries are perhaps more appropriate. The insurance business is the closest parallel to Gift Planning. Both offer financial and estate instruments; both offer financial and estate advice; both can work with the elderly, the vulnerable and the unsophisticated; the decisions made can greatly affect the quality of life of the client/donor. If we continue the comparison further, what standards, requirements and practices does the insurance industry mandate? There is comprehensive testing and accreditation; there is frequent, formal continuing education; there are stringent liability safeguards for professionals and companies; there are clear standards of practice as well as standard contracts, advertising and promotion parameters; there are compliance, complaint and license revocation procedures. Gift Planning, on the other hand, is virtually regulation free even though the two businesses are so similar in nature. The insurance business is heavily regulated and the total burden of regulation is carried by the industry itself! Self-regulation!
There is a continuum in terms of self-regulation of a profession. On the one extreme, there is no regulation and on the other, there is legal exclusivity to practice a certain profession and only members of such profession can practice that profession. An example of an unregulated profession is paralegals; whereas, an example of a heavily regulated profession is lawyers. In between, there are other models such as a voluntary association with ethical standards and education like the CAGP, or a profession with a certification mark like the AFP, or as we will discuss below, there can be provincial legislation with substantial penalties prohibiting the use of a particular designation without preventing a person from practicing a profession.
Regulation of professions in Canada is the responsibility of the provincial and territorial governments, not the federal government. In order to effectively regulate or restrict the practice of a profession in a particular province or territory, an organization requires legislation in that province or territory. That legislation could either provide that someone cannot call himself or herself a “Gift Planner” or provide gift planning services or it could just restrict a person from using a designation like ‘Certified Gift Planner’. Such legislation could provide substantial penalties for violating such legislation. It is complicated and expensive to regulate a profession in this way across Canada.
Another less expensive and more popular method of regulation is by the use of a federal certification mark or designation. Although it does not have the teeth of provincial legislation it can be a cost-effective method of self-regulation. For example, if one wanted to have exclusivity for the name ‘Certified Gift Planner’ then one can obtain a certification mark, which is similar to a trade mark and which would, in theory, prevent someone without the required accreditations from using the designation ‘Certified Gift Planner’ across Canada.
In terms of emerging trends, Gift Planning has and will become more complex in the coming years following the lead of all financial planning disciplines. Diverse gift vehicles and detailed gift arrangements will become commonplace; more co-operative work with the so-called “allied professionals” will evolve. Standards of professional practice will become more challenging. Along with progressive technical demands, will come the increased sensitivity of working with an older, more vulnerable part of the population. Already “Eldercare”, is an extensive certificate course for financial planning professionals that focus on questions of clarity, understanding and competency. There undoubtedly will be tremendous pressure on the Gift Planner to address these developing areas.
At the same time, there is a growing demand for more scrutiny in the not-for-profit sector. All of society’s institutions and industries are being questioned and challenged to provide more transparency and accountability to consumers, regulators and governments and not-for-profits will be included in this pervasive trend. Abuses will happen in Gift Planning and the knowledge of such abuses will exacerbate this trend. It will no longer be acceptable to say, “We are only fundraising”. The lines between “fundraising”, “gift planning” and “financial planning” are blurring rapidly. This conjoining is inevitable.
Self-regulation can protect the public from unqualified, incompetent or unethical Gift Planners. Groups with a stake in regulation include the public, employers, government, the profession, other donor advisors or “allied professionals”, and the individual Gift Planner. A certification program will assist in protecting the public, promoting the gift planning profession and improving the stature of Gift Planners.
Other industries have been in very similar situations. Two quick examples include Home Inspectors and paralegals.
In Ontario, anyone can call themselves a ‘home inspector’ irrespective of experience and knowledge. Some Ontario home inspectors were concerned with this situation and created the Ontario Association of Home Inspectors or OAHI. In 1994, by provincial statute, OAHI was given exclusivity in Ontario to use the designation “Registered Home Inspector” or RHI. No one can call themselves a “Registered Home Inspector” in Ontario unless approved by OAHI. No one in Ontario is prevented from being a ‘home inspector’; however, a person holding the designation RHI must have completed certain minimum training and/or have certain minimum experience. OAHI also has a code of conduct and educational programs. For consumers and real estate professionals a home inspector with an RHI designation ensures a certain level of competence and recourse.
Paralegals have half-heartedly attempted to self-regulate in Ontario over the last 30 years. Attorney General Michael Bryant and the Ontario government have expressed impatience with the failed attempts at self-regulation and the Ontario government is proposing that independent paralegals be regulated by the Law Society of Upper Canada, which many paralegals consider to be their nemesis, as the Law Society of Upper Canada has been pushing for a crackdown on paralegals for the unauthorized practice of law. Many paralegals are attempting to prevent the regulation which may impose requirements as to education and character, mandatory insurance and licensing exams and which will prevent some paralegals from practicing in Ontario. There are many paralegals who wish that their profession had worked harder for self-regulation when they had the chance. They could have crafted their own self-regulation rather than having it forced on them by provincial legislation with a regulator that some would consider hostile to their interests.
The question remains, what are we as a group of Gift Planning professionals going to do about it?
It may be too expensive to adopt the full self-regulatory model in each province and territory; however, as the CAGP already has a code of ethics, educational programs and tremendous expertise in the gift planning area, it is feasible to have a federal certification mark which would be the next logical step in defining the gift planning profession in Canada. At some point in some provinces with a large number of “Certified Gift Planners” it may make sense to start the process of obtaining self-regulating legislation in those provinces.
CAGP has a wonderful opportunity to take a bold leadership position in the Gift Planning profession. If we accept the argument that regulation of the profession is inevitable, if we acknowledge that no government appointed regulator wants to nor has the resources to regulate the profession, if we observe the National Committee on Planned Giving in the United States, already studying the issue, we will see that CAGP is in the best position to initiate self-regulation of Gift Planning in Canada, complete with testing, licensing or accreditation, and standardization of practice and contracts. This move would be a radical re-definition of CAGP and a new direction with many unanswered questions. However, such a new direction comes with many benefits.
CAGP would position itself as a required or preferred affiliation for anyone in the profession. Its mark of accreditation/licensing would be a valuable asset in leading the industry to achieve the high standards of professional, ethical practice that are necessary!
The next ten years in Gift Planning will see dramatic changes in the way the profession is practiced in Canada. There are increasing pressures to formalize our profession and we can react in various ways. We can do nothing or merely pay lip service to these increasing pressures. We can let other industries encroach on Gift Planning and provide regulatory framework probably without a thorough knowledge of the unique context in which we operate. Or, we can take the initiative now to ascertain what regulatory framework is warranted and begin the process to make Gift Planning a licensed profession.
Mark Blumberg is a partner at the firm of Blumberg Segal LLP in Toronto (www.blumbergs.ca). Mark works primarily in the areas of corporate law, non-profits and charities, and estate planning. Mark is involved with a number of non-profits and charities and has a special interest in the gift planning area.
Ken Ramsay is President of Legacy Leaders Inc. (www.legacyleaders.com) and the founding Chair of the Canadian Association of Gift Planners.