Candice Jay: 3 Tips for Charitable Giving
Guest blog written by Candice Jay
85% of Canadians donate to charities, but only 20% of them claim their donation tax credit on their personal tax returns. Imagine Canada shows donor rates declining but average donations increasing over time.
This means that Canadian charities are relying on a smaller number of people for donations, but beyond that, Canadians are not taking advantage of their donation tax credits. Financial advisors need to work more closely with their donor clients to find efficient philanthropic strategies to maximize donations, and not let the tax credits go to waste! The Canadian government has created one of the most favourable tax regimes in the world to encourage charitable giving. In 2006, Ottawa announced some donation guideline changes, further incentivizing Canadian taxpayers to donate. It eliminated capital gains on donating appreciated publicly traded securities in your non-registered or corporate accounts.
We also see the generosity of our younger generation. Still, those stats aren’t reflected in the charity numbers because they don’t give only to charities but also crowdfunding—and crowdfunding doesn’t count as a charitable donation. That’s okay, as tax receipts are typically not one of their priorities; instead, it’s helping out their community and doing what’s good.
3 Tips for Charitable Giving
1. Talk to your professional advisors (accountants, lawyers, financial professionals) about your philanthropic goals. They can help you get there in a more strategic and tax-efficient way.
2. Use Donor Advised Funds (DAFs) to create and maintain your family legacy. DAFs are easy to administer and help keep family giving organized. They may also help solve capital gains tax burdens if you donate appreciated securities into your own DAF family foundation.
3. Don’t practice chequebook philanthropy (that’s giving using cash, credit cards or cheques!) Give efficiently by donating appreciated securities. You get a double win by not needing to pay tax on the capital gains, and you also get a tax receipt for the donated amount. Corporate and holding company donors get a triple benefit, the two just mentioned and the third is the dollar amount of gains is a tax free withdrawal from their capital dividend account. As all of these strategies can be complex, please do consult with your financial professional or accountant to ensure proper planning.
To learn more about Candice Jay, click here. To learn more about the services we offer here at ETP Canada, click here.
Candice has over 15 years of experience in the financial industry. She is focused on helping charitable foundations and high net worth clients—including women, entrepreneurs and generational families—achieve their long-term financial goals. Strategic philanthropy is also an important part of Candice’s practice and she is passionate in working with clients to identify values and areas where philanthropy can play a role.
Candice understands the importance of giving back to her community, and is a current board member of the University of Toronto Alumni Association and UHN Impact Collective of UHN Hospital Foundation. She is a Founding Member of the Canadian Association of Gift Planners (CAGP) National Advisor Council and Founding Partner in CAGP’s pan-Canadian Will Power Campaign.
In her spare time, Candice enjoys practicing yoga, playing golf and tennis, and taking hikes with her family and golden retrievers, Sadie and Maggie.
This post is made for informational purposes only and the views expressed are those of the author at the time of publication and are subject to change at any time. This post has been prepared without regard to the particular individual financial circumstances and objectives of any individual who receives it and nothing in this post constitutes, or is a substitute for, legal, accounting, tax or individually tailored investment advice. As such, as you consider this material, you should consult with independent professionals in those areas regarding your individual circumstances. This information is not an offer to sell or a solicitation of an offer to buy any securities and is not to be used as a sales communication.
This blog is not intended to be legal advice and should not be relied on as such. If you require legal advice, please contact a legal professional concerning your particular circumstances.