It doesn’t take great wealth to make an impact. While large donations that can merit a donor’s name on a hospital wing or school program are impressive – and, admittedly, extremely powerful – it is the modest generosity of most Canadians that quietly carries charitable giving forward in Canada. According to the most recent data available from Statistics Canada, the median gift in 2014 in Canada was $280 – that is, half gave more than $280, while the other half gave less than $280. All told, the value of charitable donations reported in 2014 amounted to a whopping $8.8 billion!
The power of giving can be considerable, not only to the recipient or beneficiary but, indeed, to those who give as well. And, whether your means are modest or more substantial, you can create a meaningful legacy through careful and strategic charitable gift planning. This is where the support of a qualified professional – such as a lawyer, tax advisor, financial advisor or investment advisor – can play a critical role. Through a thoughtful process and dialogue, professionals can help you to articulate your goals for giving, shape a vision that is meaningful to you, and plan the best path forward – one that maximizes the impact of your philanthropy, as well as your net tax benefit.
We all know we get a charitable donation tax credit on our donation of cash to a charity. However, advisors can provide guidance on the other methods you may wish to consider as part of your gift plans. For example, if you own appreciated publicly-listed stocks or mutual funds, you can donate them in-kind to a charity. Not only will you get the same charitable donation tax credit that you would get by donating cash, but you can also avoid paying capital gains tax on the appreciated value of those securities.
While you can make these gifts at any time of the year, a majority of these gifts are made now, during the final months of the year, as it is the last opportunity in the year to take advantage of the charitable and tax-saving opportunities.
Tina Tehranchian, CFP, CLU, CHFC, a senior financial planner at Assante Capital Management Ltd., explains: “The last months of the year are a good time to review your portfolio. While many investors methodically do tax loss harvesting at the end of the year to realize their capital losses, it is also a good opportunity to identify the stocks with a high level of capital gains that you intend to sell to rebalance your portfolio. Instead of selling these stocks and donating the cash proceeds to a charity, ask your favourite charity for a share transfer form. This will be the most tax smart method of donating to a charity.”
As Tina notes, donating stocks in-kind is straightforward process: “All you need to do is contact your financial advisor or stock broker and ask him/her for a form that you need to sign to donate securities in-kind to your charity of choice. The charitable donation tax receipt will be issued based on the market value of the securities on the day they arrive in the charity’s brokerage account. Most charities will sell the stocks once the ownership has been transferred to them.”
The expertise of professional advisors like Tina provide you with smart guidance that maximizes the impact of your giving. Their expertise is enhanced by voluntary involvement in organizations such as the Canadian Association of Gift Planners (CAGP), which sets them apart as experts with the knowledge and dedication that can guide individuals in some of the most important decisions they will make in their lifetime.
I am always deeply honoured to share this incredibly personal journey with my donors; to hear their unique stories; and to help support them along their own philanthropic path. As an active member of the CAGP, I am fortunate to have a network of expertise to draw from on my donors’ behalf. This exceptional community connects, learns and supports strategic philanthropy, nationwide, to the benefit of everyone – from the member professionals, to our donors and, ultimately, to the beneficiaries. It all comes back to supporting Canadians to unleash their sometimes modest – but always mighty – capacity to make a difference.
The CAGP GTA Chapter, BC Chapter and CAGP National Office offer education, resources and professional development opportunities on strategic charitable gift planning. For details and information, visit cagptoronto.org or leavealegacyvancouver.com or cagp-acpdp.org
november 2016 INSPIRED senior living
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