Givers
Give gifts to your family and the causes you care about
Your generosity can go further with gifts made through your estate planning.
You can give to charities:
- directly as a beneficiary of your RRSP, RRIF, TFSA, segregated funds or life insurance
How can you make your charitable gifts go farther?
Canada has unusually generous incentives that too few use.
Consider Noncash Gifts
Gifts via cash, cheque or credit card are convenient. That's fine for small gifts. Larger gifts benefit from planning.
When you sell assets that have grown in value, you're taxed on the gain (e.g., stocks, bonds, mutual funds). This leaves less dollars to donate.
There's another way. If you donate the asset the charity sells it. As a result:
You get a tax receipt for the fair market value of your gift after the charity sells the asset, and
You eliminate all the tax on the capital gain
Your gift costs less than selling the asset and donating the cash.
Consider Gifts At Death
The biggest tax bill for many Canadians occurs at death (or the second death, in the case of a couple). This is also when charitable gifts provide the biggest tax savings. The donations can be 100% of net income for two tax returns: the year of death and the year preceding death. Unused amounts can be used up to 75% of net income for the following three years.
In contrast, a gift made while alive is limited to 75% of net income in the year given. Unused amounts can be carried forward and used during the following give years.
Consider A Donor-Advised Fund
You have have many accounts: savings account, chequing account, investment account, Tax Free Savings Account, retirement savings account (RRSP). Why not a flexible vehicle solely for giving? This is called a Donor-Advised Fund (DAF).
Your Donor-Advised Fund lets you separate giving from granting:
Giving: decide how much to contribute, when to contribute, how to invest
Granting: decide on the charities, how much to grant and when to grant. In the meantime, the assets in your DAF grow tax-free.
You can setup a Donor-Advised Fund through your
Investment Advisor
Knows you
Manages your other investments
Helps you understand how much you can give afford to give through your ongoing financial planning
Community Foundation
Knows the local issues
Often manages the investments for you
Involve Your Family
If you would like to involve your family, you can setup a giving account (a donor-advised fund).
You can enable your family to direct where to make gifts by setting a giving account (a donor-advised fund). This gives more flexibility
Explore How Life Insurance Helps
Create Gifts
With Life Insurance
With Life Insurance
Small, affordable premiums for permanent life insurance create a large death benefit.
When the charity is the policyowner and beneficiary, the donations you make for the premiums give you a tax receipt.
The tax savings further reduce the cost of your gift. The premiums can end in 10 or 20 years.
Replace Gifts
With Life Insurance
With Life Insurance
If you're making a sizable donation now, you're having impact now but losing the donated assets and future growth on them.
You can allocate the tax dollars saved towards permanent life insurance. Here the face amount matches the amount of your gift and the death benefit is structured to increase each year.
Example: replace a charitable gift of $1,000,000 (or $100,000 a year for 10 years) with $1,000,000 of life insurance and fund the premiums with the tax savings — $500,000 if your marginal tax rate is 50%.
Reduce Taxes
With Life Insurance
With Life Insurance
Some or all of the death benefit from your life insurance can go to charities or your giving account.
You maintain full control and can change your beneficiaries.
You also create a large donation to help with the large tax bill at death.