Ways to Give
There are many ways to give. Increasingly, Canadians are giving to charity during their lifetime through gifts of cash and appreciated securities. There are also several options for deferred gifts that offer tax benefits and preservation of economic security for you and your loved ones. Take a look at our list below which summarizes different ways to give.
Gifts of Cash
Cash gifts are one of the simplest ways to give—the donor will receive a tax receipt for the amount donated. The receipt provides a tax credit to reduce the total tax payable in the year you make the donation.
Gifts of Publicly Listed Securities
Securities that have appreciated over time are an effective way to maximize charitable giving, while minimizing tax burdens. Not only will you receive a tax credit for the fair market value of securities on the day of donation but you will also pay no tax on the capital gains, provided the gift is a qualifying security, bond or a mutual fund. Click here >> to see an example of the advantages of gifting securities vs. cash.
Bequests are charitable gifts left in your will, and represent an easy and powerful method to: 1) ensure continued support for the causes that you care about; and 2) demonstrate your commitment to an ongoing legacy of philanthropy. As the first substantial charitable gift you ever make, or as part of a long history of giving, charitable bequests signal an unwavering commitment to your values and to the kind of world you envision for future generations. Learn more >>
Donations of RRSPs and RRIFs
Donating registered plans can support your charitable interests, while realizing significant tax advantages for your estate. The remaining proceeds of RRSPs and/or RRIFs are taxable in your final tax return. Naming Benefaction as your RRSP or RRIF beneficiary can offset a substantial portion of the tax owed by your estate. Learn more >>
Gifts of Life Insurance
Insurance can be used as a charitable asset, enabling you to make a substantial gift in the future. Transfer the ownership of an existing paid-up life insurance policy to Benefaction, or name us as the primary beneficiary. Learn more >>
Gifts of Real Estate
In addition to the normal gifting limits (e.g. 75% of net income per annum and 5 year carry forward provision), gifts of capital property (e.g. Real Estate) get the additional benefits of having an amount added to the annual contribution limit of 75% of net income. The additional amount equals 25% of the taxable gain arising from the gift, and/or 25% of the recaptured CCA. This “bump” up in the donor’s contribution limit permits more credits being claimed in the year of the gift. Here is an example >
Gifts of Flow Through Shares
The 2011 budget eliminated part of the tax benefit that existed where a Canadian taxpayer buys a Flow -Through Share then donates it to charity. The taxpayer continues to benefit from the deduction for the eligible exploration expenses flowed through from the corporation and the charitable donation tax credit, but is now going to be taxed on the capital gain equal to the lesser of the FMV and the original cost of the shares. Despite the new rule, donating Flow -Through Shares is still a tax effective way to make a donation. Learn more >>
Gifts from Entrepreneurs
Owners of private companies have many options to donate. Giving from entrepreneurs may be by one or more company or by shareholder. Gifts could be cash-flow, dividends, corporate assets or corporate shares. Donating securities can be a great way to save tax, but for individuals who hold publicly-traded securities within an investment holding company there can be an even greater opportunity for making tax-efficient charitable donations. Many investment holding companies (Holdco’s) own securities that have accumulated significant capital gains; and thereby may have large potential tax liabilities when those securities are sold. But, there are great tax savings opportunities for charitable shareholders. They could donate some of those securities now, during their lifetimes, on a highly tax-efficient basis AND make larger tax-free withdrawals. Read more >
Endowments and Donor Advised Funds
These gift vehicles empower donors who want to give larger gifts for specific causes. An endowment is a fund from which only the income is allocated for charitable purposes, leaving the original donation intact. Once established, one may add to an endowment fund at any time; however, only you may change the rules or make decisions about distribution of income. Create a legacy with an endowment gift that allows you (or others) to donate now, with the knowledge that your contribution will continue in perpetuity.