Planned giving: how to support your favourite charities

Publish date December 13, 2017

According to Statistics Canada, about 84% of Canadians give to charity each year, but less than 10% have thought about leaving something significant when they die.

These types of donations, also known as planned giving, are usually made from assets such as investments, securities in kind, insurance, or a bequest from an estate. They can help you provide a higher level of support to charities and causes as they often occur over a longer time period.    

Choosing the charities you support

People often donate time and money to charities that have a personal impact on them. For instance, this might include donating to a hospital that helped someone close to you, supporting educational opportunities at your alma mater, or volunteering for a cause that matches your values and experiences.

It’s important to talk to the charity and find out how your charitable gift will be used. Will your donation go to the community you live in or will the donations go to a cause shared nationally? How much will be used for administration? What kind of impact will your gift have on the cause it’s supporting?

According to Imagine Canada, “Many donors are becoming more discerning as they want to be assured that their donation is achieving its maximum impact.”  

If you want to receive an income tax credit for your donation, your gift must be made to a registered charity or other qualifying organization. To confirm whether a specific organization is registered, check the Canada Revenue Agency website. 

And along with the money you’re donating, you may want to consider other ways to support your favourite charity, whether that’s by volunteering your time at an organization’s fundraising event or joining their board of directors.

According to 2012 Statistics Canada data, more than 13 million people, just under half of all Canadians 15 and over, volunteered — devoting two billion hours or the equivalent of just over one million full time jobs.

Types of planned gifts

Once you pick the charity you wish to support, there are many ways to make your planned gift.

Cash gifts are an easy way to support any charity. Most issue tax receipts for even small donations.

Gifts of qualifying securities are not subject to tax on any capital gains incurred on the gift and you’ll receive a tax receipt for the full value of the donation. Qualifying securities include:

  • Shares, bonds or options which are listed on designated stock exchanges
  • Shares of mutual fund corporations
  • Units of mutual fund trusts
  • Interests in segregated fund trusts

Bequests through a will are considered to be made in the year of death, and the tax receipt may be claimed by your estate or in certain circumstances, by the deceased, if the estate qualifies as a graduated rate estate.

Designating a charity as the beneficiary of a life insurance policy, tax-free savings account (TFSA), registered retirement income fund (RRIF) or registered retirement savings plan (RRSP) is another option. When you die, your charity receives the designated percentage directly from your insurance company.

Charitable foundations are registered charities that can be structured as either trusts or corporations. They can only have charitable purposes. Charitable foundations can be split into two types; private and public. Both types of charitable foundations may carry on their own charitable activities, but there are giving requirements for public foundations. Donations made to a charitable foundation are eligible for a donation tax credit.

Foundations are highly regulated, especially about the requirements for donating to qualified charities. They can be expensive, complicated and time-consuming to create.

Charitable giving programs, also known as donor-advised funds, use a public foundation to create a private foundation experience without the cost and complexity.

They offer a choice of investments and the flexibility to name your account, select a successor to assume responsibility as the advisor on the fund after your death and choose charities that will benefit from your fund. You receive a tax receipt for any donations made into a charitable giving fund.

The Quadrus Charitable giving program is one example of a donor-advised fund. It’s designed to make giving a regular part of your overall financial plan.

These simple, convenient philanthropic solutions let you support your favourite charities, now and in the future.

During the holiday season – when giving to others is top of mind – or at any other time of year, your charitable donation is an investment in your community’s future. Planned giving is more than just a gift; it’s an expression of your personal values and the way you want to shape your community, during your lifetime and beyond.

Not all securities or mutual funds may be transferrable or portable. Before making commitments to a charitable recipient, take time to evaluate your charitable giving mix and talk with your investment representative about how he/she can help you donate.