| Type of Gift |
|
Benefits to Charitable Organizations |
|
Benefits to the Donor |
|
Gift Examples |
|
Most Appropriate For |
|
|
| Gift of Cash |
|
- Available for immediate use
- Liquid
- No risk
|
|
- Donation receipt for full amount
- Straightforward transactions
- Satisfaction of seeing gift at work today
|
|
- Cash
- Cheque
- Credit Card
- Pre-Authorized Contributions
(PAC), usually paid monthly
|
|
- Everyone (any age)
who can afford to give up
some principal and the
interest it would
otherwise earn
|
|
|
| A Gift of Publicly Listed
Securities (including segregated & mutual fund units)
|
|
- Immediate Use
- Liquid
- Little risk
- Generally simple and low cost to implement
|
|
- Donation receipt for fair market value
- No capital gains tax
- Satisfaction of seeing gift at work today
|
|
- Stocks
- Bonds
- Mutual Fund Units
- Employee Stock Option Shares
|
|
- Owners (any age) of
stocks, bonds and other
securities who can afford
to give the asset and the
interest or dividends it
earns
|
|
|
| Life Insurance Policy
(Charity named as
owner and irrevocable
beneficiary)
|
|
- Immediate access to cash value, assurance
of death proceeds if policy retained
(Term policies are often not retained as
donor gets older)
|
|
- Donation receipt for cash value and any
future premiums paid
- Small current outlay leveraged into larger
future gift
|
|
-
A permanent policy (whole life or universal)
- Term policy
|
|
- Persons who i) have an older policy no longer needed, or ii) want to make a large gift but have limited resources
|
|
|
| Life Insurance (Donor
as owner)
|
|
- Will receive death proceeds unless donor
changes beneficiary designation
|
|
- Satisfaction of providing a future gift
while retaining full control of policy
- Donation receipt to estate for full value of
death proceeds
|
|
- Any type of life insurance policy
|
|
- Persons (any age) whose
personal needs and
family situation may be
subject to change
|
|
|
| Bequest of Retirement Plan Accumulations
|
|
- Future gift provided beneficiary designation(s)
and/ or bequest wording are not changed
|
|
- Satisfaction of providing a possible future
gift while preserving personal security
- Gift receipt that offsets tax on distribution
of retirement funds
|
|
- Registered Retirement Savings Plan (RRSP) and Registered Retirement Income Fund (RRIF) accumulations
|
|
- All individuals, but
especially single persons,
and surviving spouses
who have made other
provisions for heirs
|
|
|
| Bequest by Will |
|
- Expectancy of future gift provided that
bequest wording is not changed
|
|
- Satisfaction of providing for future gift
while retaining full control of property
- Donation receipt for use with final income tax return
- For bequest of listed securities, no capital gain tax, for most other property 50% of capital gain will be taxable but can be offset by tax credit from gift, likely resulting in tax savings to estate.
|
|
- Cash, securities, real estate,
tangible personal property
|
|
- All individuals (any age),
but especially older
persons with few or
no heirs
|
|
|
| Shares in a Privately-
Owned Corporation
|
|
- Share may pay dividends
- Charity may be able to sell shares in near term, or may hold them for an
indefinite period
|
|
- Public charity - Donation receipt for appraised market value at time of gift, issued immediately (if gift to public charity)
- Private Foundation - Donation receipt issued only when foundation sells shares. Receipt value is the lesser of amount realized by foundation and the fair market value at time of gift.
- 50% of capital gain taxable, offset by tax credit from donation receipt
|
|
- Shares held in privately-owned corporation
|
|
- Entrepreneurs who are
philanthropic
- Venture philanthropists
|
|
|
| Gift of Real Estate |
|
- Proceeds available as soon as property is sold
- Sometimes property itself can be retained
and used
- Valuation and ongoing maintenance
considerations can add complexity to gift
administration
|
|
- Donation receipt for fair market value
(FMV) determined by appraisal (independently obtained by charity)
- 50% of gain taxable, (unless property is donor’s primary residence, in which case no taxable capital gain), offset by tax credit from donation receipt
|
|
- Real estate including principal residence, vacation properties, and investment properties.
|
|
- Owners (generally
over 50) of a principal
residence or investment
property who do not
need the property or the
proceeds from its sale
|
|
|
| Gifts of Tangible Personal Property (other than cultural property)
|
|
- Can be retained or sold and proceeds used for
current needs
- *Decisions to retain assets warrant careful
consideration, in light of implications for
valuation and usefulness for charitable purposes, and ability to issue donation receipt
|
|
- Donation receipt (if applicable*) for fair market value
determined by appraisal
- 50% of gain taxable, offset by tax credit from donation
- Satisfaction of seeing gift at work now or
in near term
|
|
- Artworks, furniture, equipment,
collections, automobiles, musical
instruments
|
|
- Owners (generally over
age 50) of objects
which they no longer
intend to use
|
|
|
| Charitable Remainder
Trust (CRT) |
|
- Irrevocable future gift of remaining trust assets
- While often complex to administer, can be a highly effective gift planning instrument in selected circumstances
- Trust cannot allow encroachment of capital or guaranteed income
|
|
- Net income from property for life or a term of years
- May result in donation receipt for present value of the remainder interest issued at time trust established
- Property not subject to probate
|
|
- Cash, securities, real estate
|
|
- Persons (generally over age 60) who want to make a future gift and obtain present tax relief
but want to preserve investment income for themselves and/ or a survivor
|
|
|
| Gift of Residual Interest in real estate
or artworks |
|
- Irrevocable future gift of property
|
|
- Ability to continue using property for life or term of years
- Donation receipt for present value of residual interest issued at time of gift
- Avoidance of tax of a portion of capital gain if donor retains life interest
- Property not subject to probate
|
|
- Principal residence, other real
estate, artworks
|
|
- Persons (generally over
age 60) who otherwise
would give the property
under their will
|
|
|
| Outright Gift of Certified Cultural
Property
|
|
- Immediately added to collection and available
for display or exhibition
|
|
- Donation receipt for fair market value
determined by appraisal
- 100% contribution limit
- No tax on capital gain
- Satisfaction of preserving property of
national significance
|
|
- Artworks, collections, artifacts or
historic structures certified by
Cultural Property Review Board
(CPRB)
|
|
- Owners (generally over
age 50) of cultural
treasures who would like
to preserve the property
within Canada
|
|
|
| Interest-free Loan (normally payable on demand)
|
|
- Provides capital for building or investment
without interest cost
- Public Foundations (like community
foundations) not currently eligible for these
gifts due to debt restrictions under the
Income Tax Act
|
|
- Principal is recoverable
- Interest earned on loaned funds not
taxable to donor
- Satisfaction of helping charity today
|
|
- Cash and cash equivalents
|
|
- Persons (any age) who
have more than enough
current income but want
to preserve all principal
for their own future
security and/or heirs
|
|
|
| Charitable Gift Annuity (self-insured)1
|
|
- Irrevocable gift of whatever principal remains
after making required payments
|
|
- Guaranteed life payments, all or substantially tax-free
- A donation receipt for a portion of contribution
|
|
- Cash or marketable securities
|
|
- Oldest donors (usually 65 and older) who want the security of guaranteed income payments
|
|
|
| Charitable Gift Annuity
(reinsured) |
|
- Irrevocable gift of that portion of the contribution retained after purchasing commercial annuity
|
|
|
|
- Cash or marketable securities
|
|
- Oldest donors (usually 65 and older) who want the security of guaranteed income payments
|
|
|
