Charitable Giving is the voluntary giving to help those in need as a humanitarian act. How this is performed varies and although all gifts are generous and well received, optimizing your gift requires some guidance and advice.
Common recipients of charitable giving include donations to churches, schools, hospitals or preferred charities. Establishing the efficiency of the gift is where our services can compliment your act of kindness.
How your gift is presented could include some of the following
Cash or Cheque
Donation of Investments
- This is very appealing for tax efficiency to the donor from both the capital gains perspective and the receiving charity. Utilizing provisions allowed by CRA means your gift will receive favorable tax treatment if conducted properly
Life Insurance Proceeds
- Gifts through a life insurance policy is an easy and economical way to gift to a charity or multiple charities, while earning an annual tax receipt for premiums paid throughout the year. This type of giving is also a huge win for the charity, as the amount they usually receive through a life insurance policy is much greater than the amount of the premiums you paid in. So it is a wonderful win-win for both parties.
Here are a couple of ways you can donate to a charity:
They can be a named beneficiary – so the charity receives the insurance proceeds just like any other beneficiary, the donation is considered received in the year of the death. Then the charity issues a tax receipt which then becomes a tax credit that can offset the income tax liability of your estate.
You can donate an insurance policy you already own or a new policy directly to your charity of choice. In the case of an existing policy, you will receive a tax receipt for the amount of cash value in the policy at that point in time, which gives you an immediate tax benefit for the current year while you are still living. Now to donate a new policy, you could pay the premiums for the policy either directly to the insurance company or to the charity, and you will receive a tax receipt for the premiums paid during that tax year, which is a benefit you are able to use while you are still living.
With so many government cut-backs in many programs today, this has become a very popular and economical way to help your favourite charity or charities.