Charity Support - Situational Financial Planning, Legal & ID Shield, Halifax, Nova Scotia, Canada

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Charity Support

Financial Plan

Supporting Your Favourite Cases

Cash is always good, but there may be better ways to support your favourite causes.

Whether you're interested in donating annually, a lump sum now or through your will, with a little help from an experienced financial planner, you can not only exercise benevolence, but provide for your own needs and reduce your taxes as the same time.

Cash gifts are probably the easiest way to support a charity. Most charities issue receipts for amounts of $10 and over.
The Income Tax Act (Canada) allows donors to carry forward donations in excess of the annual limit in any of the five succeeding years. CCRA (Revenue Canada) allows either spouse to claim all donations on one tax return.
Gifts of increasing size achieve proportionally greater tax savings.
Donors can claim an annual tax credit for donations up to 75 per cent of their net income. The 75 per cent limit does not apply to gifts made in the year of death. At that time the limit increases to 100 per cent of the taxpayer's income for the year.

What if? You donate a security like a mutual fund that has grown in value instead of writing a cheque.

You can gift the security to a charity and pay no capital gains tax. The charity receives the same amount and it costs you less. In fact, you could actually make money on your charitable gift if the charitable tax credit exceeds the cost of your original investment!

What if? You wish your participation in the giving process didn't end after you write the cheque.

You may have considered starting your own charitable foundation, but the time commitment, cost and complexity are prohibitive. You're looking for more control, more flexibility and a chance to create a legacy of giving to last your lifetime and possibly beyond. Donating to a charitable giving program is also a great way to create a living family legacy that can be passed down to your heirs for generations. You receive a tax receipt for any donation made into a charitable giving fund. Each year you (or your heirs) advise which charity will benefit from your fund.

What if? You have a large tax bill due at your death and you want to reduce it.
You can make a bequest through your will and your estate can claim it on your final tax return. One method is to set up a life insurance policy with the beneficiary being the estate. The will would direct that funds equal to the death benefit be donated to a charity. But a downside is that probate fees apply to the gift.

Alternatively, you can name a charity as beneficiary of a life insurance policy (new or existing) without changing the ownership from your own name. The charity receives the death benefit directly without being subject to probate in the deceased donor's estate at the time of your death. Since you could change the beneficiary designation at any time, you won't receive tax credits until the year of death and the prior year.

What if? You want the tax benefit today and to increase the amount the charity ultimately receives.

You set up a new life insurance policy where the charity is named as owner and beneficiary. In this situation, tax credits are based on the premiums paid.


These are only some of the "planning opportunities" available if you want to support a charity. You can see with a little planning that it is possible to support a charity and achieve benefits to help you achieve additional goals. What direction or combination is up to you.

Remember, you do have options and you can often get better value for your money by taking advantage of planning opportunities.

The Financial Opportunity Analysis process I now use provides you with the information necessary to determine your next step - before you make a significant investment of time or money.

Are you open-minded to new ideas and taking a look to see if this approach to financial planning is right for you?

Paul is a Certified Financial Planner (CFP) licensed by the Financial Planners Standards Council; Financial and Estate Plans are provided under that license.

The information contained in this website is intended to provide general guidelines only. The application and impact of the law can vary widely from case to case based on the specific or unique facts involved. Accordingly, the information in this article is not intended to serve as legal, accounting or tax advice. Users are encouraged to consult with their professional advisers for advice concerning specific matters before making a decision.

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J. Paul Wilson, CFP®, ChFC®
Certified Financial Planner
27 Blue Thistle Road Halifax, Nova Scotia, B3S 1M3
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