Mikestrathdee’s Blog


It is a gift, but is it charitable?
April 27, 2011, 3:32 pm
Filed under: Charitable Giving

Originally published in Christian Week Ontario, May 2011 Your Money column

People who attend church regularly donate significantly more money than the general population, studies show.

But not all “gifts” are eligible for a charitable receipt.

To understand the difference, we need to distinguish between charitable gifts, which are receiptable, and donations which Canada Revenue Agency (CRA) views as private benevolence, where the donor controls the use or specifies a person or family to receive the funds. No tax receipts can be issued for private benevolence. Here are some examples of gifts that donors can’t get a charitable receipt for:

  • Designating a gift to pay the tuition of a child, grandchild or some other relative at a Christian high school or college. This is private benevolence.
  • Donations designated for camp staff salary. Young people who serve as counsellors or in other summer camp positions may only receive only a small honorarium for the season’s work. Some donors want to give a camp a gift so a particular individual can receive a higher honorarium. A camp can’t issue a receipt for that gift.

Congregations are becoming more aware of the rules around what is and isn’t charitable, says Milly Siderius, manager of stewardship services for the Canadian Council of Christian Charities. “It’s moving, which is really good.”

At the same time, “We’ve still got a lot of work to do” in increasing awareness, she said.

Other things that are not always well understood:

  • Donations of services are not eligible for a charitable receipt.
  • Reimbursement of expenses. Some people who buy supplies for a program at their church are willing to accept a charitable receipt for the value of the out of pocket expenses. CRA strongly encourages churches not to give receipts, but to issue cheques for the documented expense.
  • Renting space to a church for meetings, youth group gatherings or other events. A church issuing a gift receipt in lieu of payment is offside of CRA rules. If the owner of the space truly wants to make a donation, an exchange of cheques is necessary.
  • You can’t make a profit from a charitable donation. As thousands of Canadians are now learning to their sorrow, the leveraged donations of medical supplies and other goods that were all the rage a few years back are now leading to massive tax reassessments, penalties and lawsuits against financial advisors and lawyers who promoted or blessed these shenanigans.

Flow-through shares are the latest example of an abused gifting vehicle. At time of this writing, the fate of the 2011 federal budget is an open question. But regardless of who is in charge of our government this fall, it’s likely that proposed changes around gifts of flow-through shares will become law. This type of gifting had become flavour of the month. Ottawa is cracking down because some organizations were approaching charities, offering to match buyers and sellers, and valuing donations up front, when the true value of the shares wouldn’t be known til later.

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Higher fees the price paid for not learning about investing
January 21, 2011, 10:17 pm
Filed under: Investing

published in the January 2011 issue of Christian Week Ontario, Your Money column

 

How can I avoid paying such high fees on my investments?

This question is increasingly common at financial literacy seminars.

Canadians are not that financially literate. We also pay some of the highest mutual fund fees in the world.

Getting a better understanding of your investments, and whether you are getting good value for money invested, would be a great New Years’ resolution. It will have lasting impact on your financial future.

Excessive mutual fund fees are the price we pay for  not educating ourselves about investing. We pay too much because we naively expect someone else to look out for our best interests.

Ratings agency Standard & Poor’s regularly studies how actively managed mutual funds perform compared to the index for various fund categories. (An index is a measurement of the ups and downs of a particular market by monitoring a group of securities over time).

S&P gives failing grades to the mutual fund industry.

In the first three months of 2010, six out of every 10 Canadian equity funds did worse than their index. The same results were found for funds made up of smaller and medium sized companies (Canadian Small/Mid Cap equity, in industry jargon).

Some types of mutual funds did better than their index during the period studied. But over a longer period of time, the poor record of most mutual funds looks even worse.

In the three and five year periods ending March 31, 2010, only 10.9 per cent and 3.3 per cent of actively managed Canadian equity funds  did better than the S&P/TSX Composite Index.

The picture isn’t much different for actively managed foreign mutual funds. Less than one in 10 International equity or U.S. equity funds did better than their respective indexes, S&P found.

Author John Lawrence Reynolds’ “The Skeptical Investor – How to Grow and Protect Your Retirement Savings” is a good start for people who haven’t thought much about the fees they are paying, and what possible alternatives might be.

For people who have a bit more understanding how the markets work, there are lots of places to go for ideas.

Two of my favourites are the Money Smarts blog, www.moneysmartsblog.com/, and Money Sense magazine.

Mike Holman, a Toronto-based writer who pens the MoneySmart blog, worked in financial services for several decades. His blog combines articles written from his own experience and links to insightful pieces on various topics related to investing and personal finance from a number of other blogs and websites.

Money Sense magazine, and its www.moneysense.ca website, provide lots of ideas of cost-effective ways to invest.  For people who want to deal with a stock broker or set up their own self-directed account, their “couch potato” approach is worth considering.

For people with smaller portfolios, at least one major bank offers e-series index funds that are much less expensive than regular mutual funds. But you won’t find it prominently advertised, as other products make them bigger profits.

Another alternative is to hire a fee-only financial planner to evaluate where you are at and what a suitable investment mix would be for your age and stage of life. More on that in my next column.



Is your church financially healthy?
January 21, 2011, 10:10 pm
Filed under: Charitable Giving

Is your church financially healthy?  – published in Christian Week Ontario, September, 2010

It’s not just about whether your congregation meets its annual budget. A church’s financial health speaks to its vision, whether it recognizes and acts on the spiritual importance of being intentional around money, and if it helps you wrestle with practical financial issues in your life.

Barbara Fullerton, a stewardship educator for the United Church of Canada, investigated congregational financial best practices in her doctor of ministry dissertation at Wesley Theological Seminary.  Fullerton studied giving trends in thousands of United Church congregations over a six year period, from 1998 through 2003.

She found a connection between increased giving levels and a number of intentional stewardship development habits.

“If the congregation is clear about who they are as a community of faith and their reason for being and explains this well, people will be excited about that mission and will more likely commit to it their gifts of time, talent and financial support, if explicitly invited to do so,” Fullerton wrote.

She found strong “links between increased generosity and lifting up stewardship in worship on a regular basis, preferably every Sunday.”

Other research suggests that what Fullerton, who is of Lutheran background, discovered in her United Church study is applicable in other churches, be they mainline or evangelical. A Lilly Endowment study found that denominational differences in individual giving are generated “almost entirely by the giving of the most committed members within each denomination.”

Annual financial response (pledge) campaigns are an important tool that most churches avoid Fullerton’s research shows.  Healthy churches were twice as likely to have annual campaigns as average congregations. Others suggest that people who pledge give twice as much as those who don’t make a commitment.

Sadly, some churches try these and abandon them after a year or two, missing out on positive change that could occur if the effort lasted a few years longer.

Thanking donors is an important strategy used by healthy churches. Something as simple as including thank-you notes with year-end tax receipts can make a big difference, Fullerton writes.

Pre-authorized remittance or electronic transfer programs for giving are also useful. Fullerton found that donations from people who give electronically are higher than from average givers, often half as much again in each calendar year.

A strong focus on personal spirituality is common to the healthiest churches. Fullerton discovered that churches with growing generosity are more likely to offer Bible study opportunities.

And the healthier a church is, the more likely to provide opportunities for personal finance training that can benefit everyone.  Churches that are growing in the numbers of people attending, number of givers and amounts of money coming in are more than twice as likely to offer personal finance or budgeting training as other congregations. Coincidence? Not likely.

Fullerton’s research will be incorporated in a revised edition of U.S. stewardship educator Mark Vincent’s book “A Christian View of Money: celebrating God’s generosity.”

The co-authored and expanded book will be released in early 2011 by Design Group International.



Tax Free Savings Accounts worth a look
January 21, 2011, 10:07 pm
Filed under: Investing

Tax Free Savings Accounts worth a look –  published in July 2010 Christian Week Ontario

Tax Free Savings Accounts (TFSAs) are the best savings and planning break Canadians have been given since the Registered Retirement Savings Plan (RRSP) was created in the late 1950s. For many lower income folks, it may well be a better way to save for retirement than RRSPs.

Almost one in three Canadians have put money into a TFSA since the new tax sheltered savings vehicle was introduced in 2009. But nearly as many people have no idea how a TFSA works, or why they might consider opening a TFSA.

 

Who can open a TFSA? Any Canadian resident 18 years of age or older who has a valid Social Insurance (SIN) number will earn TFSA contribution room every year.

How much money can I put into a TFSA?

The current contribution limit is $5,000 per year. That amount is indexed to inflation and will rise over time, rounded to the nearest $500. Unused contribution room can be carried forward to a future year. So if Jane Doe put $2,000 into a TFSA in 2009, she can contribute up to $8,000 (the regular $5,000 plus the $3,000 she didn’t contribute in 2009) in 2010.

Why would I put money in a TFSA?

-While you do not get a tax deduction for contributions, you do not have to declare TFSA earnings as income, nor is the money taxed when it is withdrawn.

-Young people saving for a home purchase or for education may in some circumstances want to use a TFSA instead of an RRSP. There is no requirement to repay funds from a TFSA.

-TFSAs are a good choice to build an emergency fund, or saving for a larger purchase such as replacing a vehicle.

– TFSAs can be used as collateral for a loan.

-A TFSA can be used for income splitting within a family. The higher income spouse can give the lower income spouse money to put in a TFSA.

-TFSAs don’t affect eligibility for the federal Old Age Security (OAS), Guaranteed Income Supplement (GIS) or other government benefits.

-Unlike RRSPs, which must eventually be converted to a RIF (or annuity) and withdrawn, a TFSA doesn’t expire. For people with income less than $36,000, a TFSA is a better choice for retirement savings than an RRSP.

-Money withdrawn from a TFSA can be recontributed later, which is not the case with an RRSP.

– TFSAs can be useful estate planning tools.  A TFSA can be passed on, tax-free, outside of an estate, to a surviving spouse, or to charity, if the owner of the plan completes a beneficiary designation form.  If you donate a TFSA to charity, your estate will receive a charitable receipt for the value of the gift.

What can I invest in a TFSA?

Cash, GICs, stocks, mutual funds, bonds, real estate investment trusts (REITS) and a wide range of other financial instruments can be invested in TFSAs.

 

What should I watch for?

Check the fine print before opening an account. Some organizations charge higher fees than others for opening or maintaining a TFSA account, or for withdrawals from your account.



Do RRSPs make sense for you?
January 21, 2011, 10:00 pm
Filed under: Investing

published in the January 2010 issue of Christian Week Ontario

Do RRSPs make sense for you?

With another New Year, the annual ad blitz reminding people to make their RRSP contributions is getting in full swing.  By one report, the number of RRSP plans opened in 2008-2009 decreased by more than 100,000 from the previous year.

Most Canadians aren’t saving enough (if anything) for retirement.  A drop in RSP contributions also isn’t hard to understand, given the economic downturn. At the same time, it may be the case that for some of these people, not contributing to an RSP was a wise choice, particularly in the following circumstances:

  • You have credit card debt. If you are carrying a balance on your credit card, there is no legal investment you can make that leaves you further ahead than paying off credit card debt.
  • You need to choose between RRSP and RESP contributions .  While there are no tax deductions for RESP contributions, the federal grant that comes alongside money you put into this plan makes it a superior choice, particularly for people who don’t owe much tax and have average household income. People with family incomes of $77,000 or less get a 30 per cent government grant for the first $500 they put in an RESP. A 20 per cent grant is available on the first $2,500 in annual contributions, regardless of income level. In the unlikely event a child ends up not pursuing post-secondary education, you can roll your contributions into your RRSP, provided you have contribution room.
  • Mortgage debt.  Paying down your mortgage might be a better choice depending on the interest rate of your mortgage, how comfortable you are with debt, and the guaranteed rate you can get on another investment.  In his book “Enough Bull – How to Retire Well Without The Stock Market, Mutual Funds, Or Even An Investment Advisor,” accountant David Trahair argues that if forced to choose, “there are many more reasons why I’d rather have the house than an RRSP.” Trahair is strongly opposed to investing in stocks or mutual funds, but his argument makes strong sense for risk-averse investors at least.
  • Low income bracket.   For people in the lowest income bracket, the tax benefit of putting money into an RRSP isn’t that great. When the RRSP is drawn down, receiving that income could also affect the amount of government benefits the person receives. Using a Tax-Free Savings Account (TFSA) instead could make more sense.
  • Saving for down payment on a home. Even as flexible as the federal RRSP Home Buyers’ Plan is, it is not for everyone. Some people are better off using a TFSA to save for their down payment, David Trahair argues. People whose mortgage and related payments strain their household cash flow may find it difficult to come up with the required money to replenish their RSP, he says.

On the other hand, an RRSP top-up may be your best move. Make sure you consider all your options before writing the cheque to add to your RRSP.



When to buy stocks? -published in May 2009 Christian Week Ontario
May 11, 2009, 11:48 pm
Filed under: Investing

When is a good time to buy stocks?   Many people are understandably nervous about putting money into the stock market, given the plunge in world markets since the fall.

Others say this could be the best opportunity in a generation to buy into quality firms.

I like the principle promoted by U.S. investor education site The Motley Fool www.fool.com

Motley Fool’s web site suggests that you think about how soon you will need the money. If your timeline for a return of invested capital is five years or less, stocks can be a dangerous place to be, and “you’ll want to avoid individual stocks and stock-centric mutual funds,” Motley Fool advises.

We need to balance that sage counsel with the reality that over the longer-term, stocks provide greater returns than bonds or bank term deposits (also known as guaranteed investment certificates, or GICS).

Warren Buffett, one of the most successful investors of modern times, says the best time to buy stocks is when everyone else is afraid to. By that rule of thumb, now would seem to be a good time to invest in quality, dividend paying securities.

A more important question may be, why do you buy stocks at all? Are you doing so in hopes of getting somewhat better returns than bonds or GICs offer, over the long term? Does a long-term return of eight to 10 per cent – in line with historical averages of broad market performance – seem reasonable?

Or are you chasing the latest fad, hoping to do as well as the friend who made a quick buck doubling his investment in XYZ Corporation a few years ago?

Gary Moore, in his excellent book Faithful Finances 101 – From the Poverty of Fear and Greed to the Riches of Spiritual Investing, notes that God calls us to a different path than the extremes of fear and greed that seem to drive thinking about buying stocks.  Writing about previous difficult periods, Moore cautions against being so wrapped up in fear that you don’t take advantage of opportunities to invest. “The biblical ethic calls for us to live with hope today, as opposed to being defeated by someone’s prediction of a dismal future.”

We also need to have reasonable expectations. The Apostle Paul writes in 1 Timothy 6: “Those who desire to be rich fall into temptation and a snare, and into many foolish and harmful lusts which drown men in destruction and perdition. For the love of money is a root of all kinds of evil…”

Even professional investors have made many bad calls recently. Making all own investment judgements, without serious study (such as the Canadian Securities Course) or the help of an advisor, may not be the best call. Would you rewire your own house?
Are you willing to take the time to read extensively and research companies that you are considering buying? As Gary Moore points out in his book, “spiritual investors will be enriched if we are humble enough to realize that we don’t know it all and need to know more.”



Preventing Prodigals
February 24, 2017, 10:15 pm
Filed under: Estate Planning, Generosity, stewardship, Theology, Uncategorized

 

By Mike Strathdee

(Published in January 2017 issue of Canadian Mennonite and the Jan/Feb issue of The Recorder magazine.)

Many of us are familiar with the the Parable of the Prodigal Son in Luke 15. There are great lessons in this story about grace and forgiveness, but I’ve never heard it used in the context of warning about giving children gifts before they are emotionally or spiritually mature enough to handle them properly.

We aren’t told how old the prodigal was when he made his disrespectful, audacious demand of his father, but clearly he wasn’t ready to handle money responsibly. When I heard that passage read some time ago, I couldn’t help wondering if the story could have been different if the father knew what we now know about human brain development. What was the father thinking? Could he have had any idea how poorly equipped his son was to handle the premature inheritance?

Science has taught us that even in well-adjusted people, it can take up to age 25 before the prefrontal cortex is fully developed. That’s important because this part of the brain helps people appreciate the consequences of their actions. In her book Payback: Debt and the Shadow Side of Wealth, Margaret Atwood argues that, knowing what we now understand about brain development, giving people access to credit cards too soon could be considered a form of child abuse.

Similarly, parents should consider whether allowing their children to potentially inherit more money than they’ve ever had before, as soon as they attain the age of majority, would be a blessing or a bane.

About 15 years ago, I was trying to make this point in an end-of-life planning seminar at a church in a small town. I was shocked to see a young woman stand up in her pew and say that she agreed with me completely.

Later, I heard the sad family story. Her father died when she and her brother were 19. Their mother had passed away earlier. They each inherited $60,000. It was way more money than either of them knew what to do with. Her brother chose particularly poorly, burning through all the cash and ringing up considerable debt in only 18 months. She is now determined to ensure that her children have a better understanding of money.

Another verse relevant to the topic of inheritances is Proverbs 13:22: “A good person leaves an inheritance for their children’s children, but a sinner’s wealth is stored up for the righteous.”

At first glance, this passage may seem to focus on skipping a generation and leaving everything to the grandkids. But when taken in context with other advice in Proverbs, we see that wealth can only be successfully transferred between generations if a values transfer comes ahead of the money.

Part of me wonders if we might have fewer prodigal sons and daughters, and fewer prodigal grandsons and granddaughters for that matter, if we were more explicit in modelling generosity and explaining our beliefs and habits. We can transfer good values to our children by educating them about responsible spending, good habits and about giving throughout our lives. We can also model generosity in our estate plans by including charitable gifts as if they were an extra child in the list of beneficiaries. Let your kids know what values are important to you and how you hope they will continue them with their inheritance.

Abundance Canada can help you design and carry out a generosity plan. Ask us how.

Mike Strathdee is a gift planning consultant at Abundance Canada serving generous people in Ontario and the eastern provinces. For more information on impulsive generosity, stewardship education, and estate and charitable gift planning, contact your nearest Abundance Canada office or visit abundance.ca.



Look to the U.S. for the next big catalyst for charitable giving

A couple of decades ago, some of the largest Canadian charities were suffering. Federal cuts to transfer payments, seen as necessary to balance the national government books, were a body blow to universities, hospitals and others.

Help for the charitable sector came in the form of a policy change in line with what donors enjoy in the U.S.  After considerable lobbying, Ottawa agreed to “temporarily” reduce in 1997, then permanently eliminate in 2006, the capital gains tax on appreciated securities when donors gifted them in kind to charity.

By some estimates, that single change resulted in charities receiving an extra $1 billion in donations almost every year since 2006.

With the Canadian donor pool aging and reportedly shrinking, maybe it is time for the sector to look to the U.S. once again for a big idea to kick start the next wave of giving.

In December 2015, Congress passed a bill making permanent a charitable gifting option that allows donors aged 70.5 and older to withdraw IRA funds – a tax-deferred retirement account analogous to our Canadian RRSPs –  to donate to their favorite charities. Withdrawals of up to $100,000 each year can be made without these distributions registering as taxable income.

Given the billions of dollars of RRIF (Registered Retirement Income Fund) income that Canadian baby boomers have to begin drawing down as they turn 72, there are massive possibilities here. Not only do some people not need all of the income they are forced to begin drawing, many are not looking forward to the accompanying tax hit.

A significant number of Canadians will move into the top tax bracket when they draw their last breaths, if that occurs before they have depleted their RRIFs.  In Ontario, that top bracket current stands at 53.5%. Charitable tax credits have been adjusted to match.

Getting a cash-strapped federal government to consider a break for retirement funds donated to charity will not come easily. Many leaders in the charitable sector will say their top lobbying priority will be convincing Ottawa to reinstate the proposed capital gains exemption for gifts of real estate and private shares that was accepted, but not enacted, by the former Harper government.

(Donald K. Johnson, who led the successful lobby for favorable treatment of donated securities some years back, is also pushing Ottawa to give exemptions for real estate and private share gifts. A Toronto Star story says such a change would result in additional donations to charities of about $200 million a year. The cost to the federal treasury would be between $50 million and $65 million.)

But it’s also time to start asking whether the lowest-hanging fruit for growing charitable donations could lie with the ever-increasing wave of RRSP savings that need to be converted to RRIFS and withdrawn.

Lots of good causes sure could use the help.



On autonomy and community
March 1, 2016, 9:29 pm
Filed under: Communication, Financial Management, Generosity, stewardship, Theology

Published Feb. 24, 2016 in Canadian Mennonite magazine

Feb 24, 2016 | Volume 20 Issue 5

“So Jacob was left alone, and a man wrestled with him till daybreak. When the man saw that he could not overpower him, he touched the socket of Jacob’s hip so that his hip was wrenched as he wrestled with the man. . . . The sun rose above him as he passed Peniel, and he was limping because of his hip” (Genesis 32:24-25, 31).

Dutch pastor Wieteke van der Molen used this text for a Friday evening message at the Mennonite World Conference assembly in Harrisburg, Pa., last July. Out of many good sermons that week, her message, “On autonomy and community,” struck the deepest chord for me. (The entire message is available online at pa2015.mwc-cmm.org.

We are all part of a community, van der Molen noted, be it a family, tribe, school, workplace or church. Some of us are members of multiple communities. Community feeds us, nurtures us and teaches us right from wrong, she said. To be human is to be part of community; we cannot survive alone.

We also crave autonomy, to have control over what concerns us. We want to make our own decisions, to be and do our best. There is a major tension between these important truths.

The struggle was ever thus, even in Old Testament times. As we read in Genesis, Jacob believed that he came first, always. He swindled his brother, deceived his father and so on. But living by your own set of rules and living in community do not go well together. After wrestling with the angel, Jacob struggled with the people around him, with God and with himself.

Autonomy, van der Molen argues, means that you are your own judge, but you have to figure it all out by yourself. Jacob’s story teaches us that it is not wrong to seek our own way, but we need to recognize the community around us, acknowledging the pain, hurt and frustration on both sides.

Modern, grown-up autonomy doesn’t come easy. When we act like Jacob did, wrestling with God, community and self, van der Molen has this warning: “Even if you win, it leaves you slightly limping.” How much of that limping results from failing to seek counsel?

One of the core principles that Mennonite Foundation of Canada (MFC) teaches is that God asks for our whole selves; that stewardship is best forged in Christian community marked by integrity, accountability and joy. Do we seek out Christian community and accountability in our walk as stewards of all that God has entrusted to us? Where do we find counsel in making choices around financial matters and in determining whether those choices are God-honouring?

In the 16 years that I have shared the MFC message of generous living and faithful, joyful giving, I have noticed the desire for autonomy, at whatever cost, intensify. Interest in, or even understanding of, community and the responsibilities that come with community, has crashed to a similar extent. It affects many of the institutions that we serve. Denominations, churches and some charities are limping, staggering in some cases. Others are thriving and growing, but there will be more limping and brokenness in coming years, I suspect.

We can do a lot more together than we can apart. How do we foster discussions around the value of community in our financial decisions? MFC can help. Perhaps a money autobiography class would be helpful. Maybe a discussion of best practices, both on a personal and congregational level, could be of assistance. Ask the MFC office closest to you for resources to help get the discussion started.

Mike Strathdee is a stewardship consultant at Mennonite Foundation of Canada serving generous people in Ontario and the eastern provinces. For more information on impulsive generosity, stewardship education, and estate and charitable gift planning, contact your nearest MFC office or visit MennoFoundation.ca.



Why should I give to your church?

Published in Canadian Mennonite, March 2015

Helping people give money away over the past 15 years has been a tremendously rewarding part of my work at Mennonite Foundation of Canada.

Many of these generous people are from the “builder generation” (born in or before 1945). The builders I’ve spoken with give generously, value church institutions and trust the people who run them.

Being told there is a need opens their wallets or cheque books. As these people age, become infirm and pass away, I miss their generous spirits. Increasingly, many churches, church agencies and related institutions are starting to feel the same sense of loss. That loss will intensify from dull ache to stabbing pain in coming years for those who don’t overhaul their approach and communication with donors.

Many in my generation and most in younger cohorts don’t see things the same way as their church-attending parents and grandparents did. This is true even of the much smaller fraction of boomers and millennials who still attend church more frequently than Christmas and Easter.

Given this clear dichotomy in how different generations respond, it is sad to see people making appeals based on guilt and obligation near the end of a church’s financial year. That doesn’t work anymore. It reminds me of the father recounting to his young daughter how his family had purchased their first colour TV when he was 10 years old. After some reflection, the daughter replied: “Daddy, was the whole world black and white then?”

Leave it to Beaver-era appeals don’t work in the digital age. Loyalty to church institutions is a foreign concept to a sizeable group of church attenders. Without new, compelling and repeated calls to commitment, the idea of supporting a congregation’s ministry is easily overlooked or dismissed.

J. Clif Christopher, in his book Rich Church, Poor Church, says he finds “far too many church leaders who are working on the answer to the question, ‘Why should I give?’ and not on the right question for today, which is, ‘Why should I give to you?’”

Younger donors who are asking the latter question don’t want to hear about commitments made at a budget meeting they didn’t attend. They want to give to vision, to relationships. They want to hear about outcomes and changed lives.

As the number of charities competing for donor attention continues to multiply—and Sunday morning once in a while is the extent of many people’s exposure to church—a congregation that wants to succeed in growing givers’ hearts needs to have a compelling answer to Christopher’s question: “Is my church the best place for me to invest to make a difference and change lives?”

Getting positive responses to that question will require leaders willing to move beyond traditional approaches. As Christopher says, “Being taught to give is as integral to the mature Christian life as learning how to read is to the adult life.”

Do we care enough about church to use proven stewardship best practices, even if they make us uncomfortable?



Where did all the money go? – old stories from the late 90s
September 4, 2014, 2:03 pm
Filed under: Business, Financial Management, Fraud, Investing, Uncategorized

Copy of K-W Record article, March 29, 1999 – front page, A1.

Shareholders left to wonder where money went

Mike Strathdee
RECORD STAFF
Monday 29 March 1999

Former executives of Struthers Inc. admit that they broke Ontario securities laws when they sold shares in a controversial swine-breeding company that is millions of dollars in debt and has left hundreds of area investors with virtually worthless shares.

“There’s clearly infractions,” Jason Struthers, son of company founder Ron Struthers, admitted in an interview with The Record.

Struthers Inc. is one of a handful of companies started by Ron Struthers to commercialize swine breeding and embryo transplant technology. Building on his father Stan’s breeding business, Struthers had offices in Guelph until last fall, until he was evicted for non-payment of rent.

Struthers Inc. is now largely based in South Carolina. Its Canadian presence consists of space in a lawyer’s office in Mississauga.

Jason Struthers, formerly the company’s secretary/director of international business development, and colleague Paul Allcock, who served as director of corporate affairs, say they ran afoul of securities law after receiving bad advice.

Under provincial securities law, a company must clear a prospectus, a detailed offering document, with regulators in order to sell shares to more than 50 shareholders. The Record has obtained a shareholders list which indicates that shares in several Struthers companies were sold or issued to more than 1,200 people, including 300 in Ontario and close to 200 within the Waterloo Region-Wellington and Perth County area.

Investors paid tens and in some cases hundreds of thousands of dollars for Struthers shares, which were sold at various times for $1, $3 and$4.50. Struthers Inc. stock began trading on the U.S. over-the-counter bulletin board at $6.50 a share last June, but quickly fell to only a few cents and never recovered. The shares last traded for 1.5 cents each, earlier this week.

At least two regulatory bodies — the Ontario Securities Commission in this province, and the Securities and Exchange Commission in the U.S. — are investigating the Struthers companies, The Record has learned.

The OSC has sent a five-page questionnaire to investors asking them about their investment knowledge, how they became aware of the Struthers companies, what information “were you provided with that induced you to make your investment,” in which Struthers business the investment was made, and who sold them the investment.

And the RCMP has interviewed a number of people in an effort to determine whether it has grounds to launch a criminal investigation. “I’ve been co-operating with the RCMP on this,” a haggard-looking Ron Struthers told The Record.

Struthers says he has met with RCMP officers a handful of times since an initial, four-hour interview two months ago. He wouldn’t comment on what the RCMP or securities regulators are looking into.

He did confirm when asked, however, that Revenue Canada has been looking at the books of the Struthers companies for the past three months in connection with money owed for employee payroll deductions.

“I don’t have the books, I don’t have access to the books, but I do know Revenue Canada has been in and done the audits.”

The OSC can ask a court to force a company to file financial statements and a prospectus. The agency can also seek an order directing a person to repay any part of the money paid by a security holder for securities.

Struthers raised at least $6.5 million US through the sale of shares over a period of several years. Shareholders have never received financial statements for the company, and only received share certificates early this year.

“You’ve got to understand something,” Jason Struthers said when asked about why the company didn’t comply with regulatory requirements. “When Ron started this company, he had zero knowledge of how a public company functions. We relied on counsel to do this; now it turns out that the information which counsel gave us was dead wrong.”

Allcock also pointed fingers elsewhere when asked about why proper procedures weren’t followed when shares were sold. “We were always advised that we didn’t need it (a prospectus),” he said. Our advice has been the pits. We could’ve gone to the variety store and got better advice.”

Jason and Ron Struthers were removed from the board and management of Struthers Inc. in a December restructuring.

Allcock, who said he and Jason raised the first $500,000 for the company, claims to have left the firm earlier in a dispute over the best way to raise money.

© Copyright Kitchener-Waterloo Record 1998

Copy of K-W Record article, March 29, 1999, business section, page C1.

Guelph contractor sues U of G

Unpaid renovations at SRI office prompt Van-Con’s $130,000-plus claim
By Mike Strathdee
RECORD STAFF

A Guelph contractor is suing the University of Guelph to recover payment for renovations he did at a university research park for swine breeding companies formerly operated by area businessman Ron Struthers.

Van-Con General Contractors is seeking more than $130,000 plus costs for renovations done to an office building at 150 Research Lane between October 1997 and January 1998.

The company, operated by Ike Van Soelen, received a judgment last July against Struthers Research Inc. (SRI), one of several companies started by Ron Struthers, a Cambridge businessman and former Pentecostal minister.

But after being told that SRI has no assets, Van Soelen decided to pursue a claim against the university, which has since rented the research park space he renovated to a Guelph marketing company.

Ironically, that firm has also received a court judgment against a Struthers company for work it never received payment for.

The university, in its statement of defence, denies any liability or responsibility for work done by Van-Con. In a cross-claim, however, it seeks to hold SRI and Struthers International Research Corp., another associated firm, responsible for any amount it is found to be liable to Van-Con.

It also seeks a judgment for $100,000 against Struthers “as damages for breach of contract regarding the agreement to lease between the university and Struthers IRC.”

Van Soelen says the university is benefiting from work he did in the building. He has also placed a lien against the property.

In its statement of claim, Van-Con alleges that a university official approved drawings and specifications for work done at the building, but at one point, expressed concerns about the financial viability of Struthers and instructed Van-Con to cease work.

The statement of claim goes on to allege that, subsequently, the official said the university “no longer had any financial concerns about Struthers,” and that Van-Con could proceed with its renovations “since everything was now in order.”

Van-Con also alleges that university officials “inspected the quality of work from time to time during the course of its progress,” and that Struthers was indebted to the university “for the rent of facilities elsewhere, in the amount of $148,946.00.”

A letter sent by a university lawyer to a former Van-Con lawyer indicates that Struthers’ tenancy in the research park “was terminated on March 4, 1998, as a result of arrears in the payment of rent.”

Earlier this month, a few days after the university filed its statement of defence in connection with the Van-Con lawsuit, the office of research issued a brief press release distancing itself from Struthers.

“In 1994, Struthers Research began investing in swine embryo research at the University of Guelph,” the announcement stated. “The University of Guelph no longer has a research contract nor any research involvement with Struthers Research and parties related in any way to Struthers Research. The University of Guelph does not have a licensing agreement with Struthers Research or any other Struthers entity.”

Larry Milligan, U of G’s vice-president of research, said in an interview that the university is “quite deliberately declaring that there is no linkage, that there is no licence for the technology in place.”

But more than a week after the announcement was made, a share-offering document available by fax from the South Carolina office of Struthers Inc., the U.S. parent firm of the companies named in the lawsuits, still indicated that the company “intends to take full advantage of it’s (sic) strong working relationship with the University of Guelph, a
world-renowned leading animal science institution.”

Doug Beatty, vice-president of operations for Struthers Inc., brushed off the U of G announcement. “They can say whatever they like,” he said.

“There’s things happening behind the scenes here. It’s unfortunate. They pushed Struthers out of Canada.”

Company founder Ron Struthers broke his silence on the events Thursday, and provided the Record with a copy of a 1994 contract between U of G and Struthers Research.

Money owing to U of G is for subsequent, related work, and doesn’t affect Struthers Inc.’s ability to commercialize the embryo-transplant technology, he said in an interview.

“Basically, the technology is basically there for the use of this corporation (Struthers Inc.),” he said.

U of G moved to dissociate itself from the Struthers companies following months of talks because “we’re not getting anywhere in clearing up the back debt” of more than $200,000 owed to it by Struthers, Milligan said.

Milligan said he has received a legal opinion which suggests that the swine- embryo transplant technology “is owned by the university.”

U of G hopes to recoup its losses by commercializing that technology, possibly through a licensing agreement with another firm.

Struthers Inc. has not publicly commented on its view of the millions of dollars in debts run up by Ron Struthers and other firms which bear his name. The company said in December that Ron Struthers no longer holds a management role with the firm.

A November share-offering document for Struthers Inc., which has shares quoted through the U.S. over-the-counter bulletin board, claimed that the firm is “not presently a party to any material litigation,” and that its liabilities totalled $1,510.

The document doesn’t refer to litigation or liabilities involving its subsidiaries. Struthers officials have not responded to written questions submitted earlier this year to Richard Lane, their New York-based lawyer.

Beatty said this week that “Struthers Inc. is a debt-free organization.”

He wouldn’t say whether Struthers Inc. has any responsibility for debts run up by its subsidiaries or Ron Struthers. “You’ve sort of blindsided me. I don’t know.”

Ron Struthers says company officials verbally promised him, when he relinquished control of the firm in the fall, that all of the millions of dollars in debts run up by Struthers corporations and promissory notes to shareholders signed by him would be taken care of. “I’ve been told that they (Struthers Inc. officials) have a block of shares set aside for repayment of debts,” he said.

But he can provide no proof that any such agreement exists, as he didn’t get anything in writing. “No. I didn’t. Just trusted them.

© Copyright Kitchener-Waterloo Record 1998

Copy of K-W Record article, March 29, 1999, business section, page C2.

Newsletter to Struthers investors long on predictions, short on details

By Mike Strathdee
RECORD STAFF

Struthers Inc. has a bright new future ahead, the company’s latest newsletter to investors says.

The pork biotechnology company plans to train a team of surgeons in embryo-transplant techniques at a major United States university and announce contracts with major swine breeders, the newsletter states.

But the four-page document, which can also be seen on the Struthers Web site, is long on predictions and short on specifics.

Titled “the Rooter’s News,” the newsletter refers to several upcoming developments without providing any specific details.

“The commercialization of the embryo-transfer technology, through relationships already formed with leaders in swine genetics in North America, will represent a positive cash flow situation for the company and will allow for future growth and expansion,” the newsletter states.

Doug Beatty, vice-president of operations at Struthers’ Charleston, S.C., office, said the company won’t be able to identify any of its partners nor the university where the surgical training will take place, until after April 2.

Struthers has had to sign non-disclosure agreements with the universities involved, as “they don’t want a slew of people calling,” he said in a telephone interview.

“Unfortunately, we couldn’t (identify partners) in that newsletter,” he said.

”We wanted to, but we couldn’t.”

Contracts will be solidified and signed when company officials visit Iowa, Missouri and Illinois in coming days, he predicted.

Company president Don Bowden, a veterinarian from Iowa, is handling the negotiations, the newsletter stated.

The company also plans to purchase a mobile operating theatre, a surgical trailer, from Alpha Omega, an Indiana company which builds mobile CT and MRI scanners, Beatty said.

Struthers plans to have a six-metre (20-foot) surgical trailer based in Canada as embryo-transplant work progresses, he said.

Company founder Ron Struthers, who has not had a management role with the company since a restructuring last fall, told the Record last week that he is “pretty happy with the guys in the States” and the way efforts to commercialize embryo-transplant technology are proceeding.

He remains interested in working with the company which bears his name.

“My offer to the company is that anything I can do to take the company forward, any knowledge I have, I will give it to them.

“I’d like to help grow the company if it’s possible, if there’s a place for me to be there.”

Struthers said that when he handed over control of the firm late last year, he planned to go to South Carolina and work out of the Struthers office there with current management.

But poor health, including several operations related to kidney problems, have kept Struthers in Cambridge. “At this point, it’s not certain whether they want me there (U.S), ” he added.

© Copyright Kitchener-Waterloo Record 1998

HEADLINE Company ex-president has ‘no idea’ where close to $4 million has gone
BYLINE Mike Strathdee
SOURCE RECORD STAFF
DNOTE Ran with related story “Shareholders left to wonder where money went: Former executives of Struthers Inc. admit they broke securities law” Page A1 “Guelph contractor sues U of G: Unpaid renovations at SRI office prompt Van-Con’s $130,000-plus claim” Page C1 and “Newsletter to Struthers investors long on predictions, short on details” Page C2

There are a number of mysteries surrounding events involving Struthers Inc. over the last year.

Shareholders who have contacted the Record wonder how shares in Struthers Inc., which began trading at $6.50 each last June on the U.S. over-the-counter bulletin board, quickly fell off to only a few cents in value, and never recovered. The shares last traded at 1.5 cents on Friday.

They also wonder why, if the company’s new management wanted to assure investors that Ron and Jason Struthers no longer held any management positions in the company as of early December, the share certificates which were issued to shareholders Dec. 29 were signed by Jason Struthers, secretary, and Ron Struthers, president.

The certificates were printed before the management restructuring occurred, Ron Struthers told the Record this week. “Maybe it’s even prudent,” he said. “Why waste another $15,000 to $20,000 (to print new shares)? Use up the (old certificate) stock.”

It is unclear why Ron Struthers agreed to relinquish control of the company without having a detailed, written agreement as to the royalty stream he is to receive for his past work. Ron Struthers says he trusted his longtime advisers to take care of his interests.

Struthers Inc. documents suggest Ron Struthers will receive royalties, but don’t specify the amount. “It’s never been flushed out,” Ron Struthers asked when questioned on the subject.

“I’m not (financially) in a point where I could go to a lawyer, or even hire one.”

Another unanswered question is the issue of what happened to the millions of dollars raised by the company, given that scores of creditors, large and small, weren’t paid for services rendered.

A Struthers Inc. offering document available to prospective investors through a fax-on-demand service states that the company had total assets of $2,824 as of Nov. 15.

Ron Struthers insists that all of the money raised from investors — at least $6.5 million US, by some accounts more — was used to pay expenses related to research and market development efforts.

But The Record has obtained a copy of a draft, unaudited consolidated balance sheet that states it was prepared for the management of Struthers Inc., dated July 31, 1998, months before Ron Struthers stepped aside from the management of the company.

That document, which investors have never seen, stated that the company had cash of $3,933,191 at the July 31, 1998, end of year.

“I have no idea,” Ron Struthers said Thursday when shown the statement and asked about the discrepancy. “I’ve never seen these documents (before).”

If the company had that much money last summer, “we would not have been in problems,” he insisted.

Companies which have stock quoted through the over-the-counter bulletin board in the U.S. are not required to make the detailed filings of their financial statements with regulators which other publicly traded firms must do.

Struthers Inc. is in the process of having its financial statements examined by auditors, company spokesman Doug Beatty said. “When they’re ready, we’ll post them” on the company’s web site, he said.

One of the reasons that the financial statements are being changed is because the company’s asset base is changing, he said. “There was a lot of stuff that went missing.”

Beatty did not elaborate.

Ron Struthers denied that any assets of real value remain unaccounted for when the company was evicted from a leased research farm south of Guelph in October. “Nothing’s gone missing that would influence those books by more than $5,000 or $10,000,” he said.

“There was no assets you could pick up and walk away with.”



If I had a million dollars

Published in the June 24, 2013 issue of Canadian Mennonite magazine

Many of us dream about how we might spend a large, unexpected windfall. Some imagine travelling to exotic locales, or owning a new vehicle or dream home. Some dream about making a difference.

I would use my imaginary windfall to invest in our pastoral leaders and the future health of the church by funding financial literacy programs at Bible colleges and seminaries.

Debt is a huge issue confronting our society. The average Canadian owes $1.65 for every dollar of after-tax income earned. It would take over half a year’s salary for the average Canadian to repay his/her consumer non-mortgage debt.

How much training do church leaders get at seminaries and Bible colleges so they can help people learn how to live within their means? Basically nothing. When I asked about this at a Mennonite ministerial gathering this winter, some nodded and murmured assent. No one disagreed.

Not only do seminarians graduate ill-equipped to help members of their congregation in this area, increasing numbers are graduating with crippling debt loads that impair their own ability to be effective, and may even force them out of ministry. This situation also reduces the pool of candidates who are able to serve at smaller congregations. (A shortage of pastors willing or able to serve small and rural churches is an increasingly major concern across Canada, according to a recent study by the Evangelical Fellowship of Canada.)

Some seminary graduates have student debt loads approaching or even exceeding $100,000. Graduates head into ministry and are offered part-time positions, sometimes with few benefits. Many times their first churches are in small or rural communities where there are limited opportunities to earn additional income unless they are handy with a hammer or a computer.

It’s hard enough for pastors to talk about money, let alone lead by example, without the pressure of unresolved personal challenges in that area. Fortunately, some organizations are recognizing the problem and taking steps to address it.

Luther Seminary in Minnesota has a financial coaching program through its Center for Stewardship Leaders. Any student who applies for financial assistance at Luther is paired with a trained volunteer coach. Coaches are transparent about their own choices and situation, and provide a safe environment to guide students through their challenges over at least one academic year. “The job of financial coaching is to help you get your financial life in order, clear the way to a sense of well-being about money and free you to be a stewardship leader,” the coaching manual states.

After developing the coaching manual and recruiting mentors, the seminary spends only a few thousand dollars a year on the program, director Charles Lane tells me.

The United Methodist Church in Indiana takes a more holistic approach. Matching grants from the Lilly Endowment provide educational programs for clergy and lay leaders, plus grants to clergy or clergy spouses.

If I had a million dollars, I’d fund Bible colleges and seminaries to offer financial literacy programs. Tuition and materials would be free for anyone who commits to full attendance and participation. On successful completion, a graduate would get the added bonus of a grant that could be applied against student debt.

We ask a lot of our pastors. Giving them the training they need in financial matters would be a great gift for them, their congregations and the wider church.



Garlic, and remembering Dad
August 20, 2014, 3:17 pm
Filed under: gardening, Generosity, Tributes | Tags: , , , , ,

This summer’s garlic harvest was bittersweet, for several reasons. I picked a poor spot

to plant it in last November, too dry due to a nearby maple tree.

That error yielded a series of undersized bulbs in August. And for the first time, I can’t compare

harvests with the man who passed on his love of allium sativa to me.

Dad died last September, weeks after digging up his final haul of large, fragrant bulbs. There

were 500 bulbs, give or take, enough for a small village, more than ample to supply many family,

friends and neighbors plus his daily intake. It was an extravagant supply, in keeping with the massive

harvests of potatoes, carrots and in his final years, kale that he planted in an oversized small town

garden larger than many city lots. Had he been so inclined, Dad could have run a stand at the local

farmer’s market with his surplus produce.

As a gift to people who came to his funeral, my brother Al, sister-in-law Gloria and other members of

their family prepared 300 bulbs, each prettied up with a length of ribbon that had attached a small card

with Dad’s picture and the phrase “a gift from Grandpa Jim’s garden” on one side. Instructions for late

fall planting were written on the other side of the card.

Some people said they would use it for lasagna that night, others said they would follow the

instructions and do their first ever planting late in the fall, thanks to “The Garlic Man.”

Appropriately, the variety Dad favored was an Ontario breed named “Music,” completely suitable for

a man whose other great love was picking and grinning.

Like Dad’s over-sized love for his garden, raising rabbits and making music, Music garlic at its best

is elephantine in scale, with little resemblance to the shriveled foreign garlic that many make do

with from grocery stores for much of the year. When planted around rose bushes, it proves most

effective in keeping bugs away. The taste cannot be equaled either.

Native to Asia and cultivated for over 6,000 years, garlic is commonly eaten around the world. While

there are 70 different strains of garlic in the estimated 2500 acres that commercially planted in Ontario,

Music is said to make up about 90 per cent of the total. But price conscious Canadians import over two

thirds of their garlic from China. Dad had little use for store bought Asian garlic, saying it was of little

value on the rare occasions he was forced to substitute.

Dad made a point of downing at least a large clove a day, often raw, sometimes in his breakfast juice,

first thing in the morning, much to the chagrin of some health care professionals who literally couldn’t

stomach the smell. My guess is that most years he consumed three or four times as much as the

2.3 pounds reportedly eaten annually by the average North American.

Many a full head of garlic made its way into clay bakers at our house, oven roasted and later spread on

fresh-baked bread for a delectable dinner treat thanks to Dad’s never-ending supplies. It is important to

exercise caution when indulging in this treat however. We once had dinner guests who were newcomers

to Canada and unfamiliar with garlic’s charms. The two heads we had baked as a side dish for the meal

sat largely untouched until a family member decided to go for it and consume the lot.

Reminders of that meal oozed through the diner’s pores for several days, an aroma that is not to

everyone’s liking.

Trying to locate Dad near his garden on weekends between mid-April and October was generally a

futile exercise. Most often, he had loaded up his trailer, grabbed his beloved Martin guitar and headed

off across southern Ontario with his girlfriend Joan to a steam show, fiddle competition or some other

rural gathering of the country music and bluegrass “gypsies” that were his tribe. Like him, most were

retired folk who loved nothing better than a weekend camping, playing, singing and telling stories,

some of which were possibly even true. He died on a Friday evening at one of these gatherings,

succumbing to a heart attack shortly after singing a few numbers in a friend’s barn and

wandering off to his trailer with promises to see everyone later.

Fitting then, that acoustic music played a large part in his funeral celebration. A trio of fiddlers,

including a granddaughter, cranked out “Maple Sugar”, “Devil’s Dream” and other jigs and reels while

over three hundred mourners took their seats in the St. Marys United Church for the service.

Five of his grandchildren sang or played during the tribute, and a long-time musical friend from

Hanover played some Hank Williams hurting music as the family followed the casket out of the church

an hour or so later. At the rural cemetery outside the hamlet of Avonbank, where his parents had been

laid to rest over 50 years earlier, the musicians started up again once the pastor had finished the

committal service. Strains of “Til We Meet Again”, then “Heart of Gold” rang through the countryside.

When I returned to Avonbank months later to view the gravestone, someone had left a bulb of Music

garlic beside Dad’s grave.

Maybe I should sing some old country songs while planting this fall’s garlic crop, to get it right.