What is planned giving

Planned giving is the process of planning your charitable donations in advance. This allows you to achieve your philanthropic goals while maximizing your social impact, tax benefits, and other financial advantages. A planned gift can benefit donors and their families, as well as SOPAR and it’s beneficiaries, long into the future.

 

Various types of planned gifts

Gift in a will, also known as bequest, is a provision made in a person’s last will and testament that specifies the distribution of assets or property to individuals, organizations, or charities after the person’s death. It is a common form of planned giving, allowing individuals to make charitable contributions as part of their estate planning. All it takes is a simple clause in your Will. In addition, a tax receipt for the full amount of your donation will be issued and may offset capital gains or other taxes payable to lessen the financial cost on your estate.

Securities :  A gift of securities refers to the donation of stocks, bonds, mutual funds, or other investment assets to a charitable organization. Instead of making a cash donation, individuals can contribute their securities to support a cause they care about. Donating stocks, mutual funds or other types of marketable securities to a charity exempts you from paying tax on capital gains. As a donor, you also get a tax receipt for the full amount of the gift. It is crucial to consult with a financial advisor or tax professional to understand the specific tax implications and advantages related to donating securities, as individual circumstances may vary.

Life Insurance :  Gifts of life insurance are a great way to make a substantial donation and there are various ways to do it. You can donate a new policy or an existing policy that has been in force for some time. In both cases, the charity organization is both the owner and beneficiary of the policy. Insurance planned giving allows individuals to make a significant charitable contribution without depleting their estate or liquidating assets during their lifetime.

Real Estate: You can donate a family residence to a charitable organization while continuing to use it until the end of your life. You will receive an income tax receipt of the commuted value of the asset at the time of the donation. At the time of death, the charitable organization will obtain the use of this residence. If real estate assets other than the primary residence are donated, 50% of the capital gain is taxable.

Endowment Funds:  When it is used as a type of planned gift, it consists of transferring an important sum to a charitable organization and designating the particular cause which will benefit from the income generated by the capital transferred as a donation. The terms and conditions pertaining to such a fund are documented in a contract between the organization and the donor. In order to comply with the standards of the Canadian Revenue Agency, the capital will remain intact for life or for a minimum of ten years; the organization is subject to disbursement quotas, which are 3.5%. The charitable organization that you will have selected will manage the capital and will present you with an annual report, providing all relevant financial information. You can choose the name of the fund in order to perpetuate the memory of a loved one.

Inspired from Planned Giving – SLA Qc. We invite you to visit their web page at www.sla.quebe.ca

Flow-through shares: It is a type of common share that permits the initial purchaser to claim a tax deduction equal to the amount invested. The flow-through share regime allows public companies to transfer to investors certain exploration expenditures conducted on Canadian soil. Flow-through share financing contributes over 65% of the funds raised on Canadian stock exchanges for exploration across the country, generating significant exploration activity within Canadian borders. The flow-through share helps donors achieve a lower after-tax donation cost, leading to more transformational gifts to the charity organization. It helps donors give more for less.

Source: Prospectors & Developers Association of Canada (PDAC). For more detailed analysis visit their web site.

Benefits of planned giving 

There are several benefits to engaging in planned giving, both for the donor and the charitable organization receiving the gift. Here are some key advantages:

Philanthropic Impact: Planned giving allows individuals to make a significant and lasting impact on the causes and organizations they care about. By making a planned gift, donors can support charitable initiatives, projects, or programs that align with their values and make a positive difference in their communities or the world.

Tax Advantages: Planned giving often provides tax benefits for donors. Depending on the jurisdiction and the specific type of gift, donors may be eligible for income tax deductions, reductions in estate taxes, or capital gains tax advantages. These incentives can help maximize the value of the gift and potentially provide financial benefits to the donor or their estate.

Financial Planning: Planned giving can be integrated into an individual’s overall financial and estate planning strategy. It allows donors to structure their charitable contributions in a way that aligns with their financial goals and objectives, ensuring that their philanthropy is both meaningful and sustainable.

Legacy and Family Values: Planned giving offers an opportunity to create a lasting legacy that reflects the donor’s values and beliefs. It allows individuals to pass on their commitment to philanthropy and inspire future generations within their family or social circles to continue supporting meaningful causes.

Personal Fulfillment: Engaging in planned giving can bring personal satisfaction and fulfillment to donors. Knowing that their generosity will make a difference in the lives of others and contribute to causes they deeply care about can bring a sense of purpose and joy.

Contact us    

You can contact SOPAR at (819) 243-3616 or 1-866-443-3616 or email at SOPAR@SOPAR.ca. Experts can give you knowledgeable advice on how to go about leaving a legacy. Talk to your trusted professionals such as notary, lawyer, accountant or financial advisor, so you can get started down the right path. SOPAR now has a partnership with PPTA.