Donations to charitable causes are the best way to lend a helping hand to not only people in your own neighborhood but to those in need across the country and in other lands. At the Canadian Book of Charities, it is part of our mandate to provide you, the giving public, with as much relevant information as possible, so that you can make an informed judgment on how best to benefit a charity/charities through bequests made in your will.

One of the most significant methods of making lasting charitable donations is through gifts of cash or bequests through your estate will. Not only will your gift be non-taxable to the charity of your choice, this method will ensure that your precious gift continues in perpetuity to go to the cause closest to your heart. Did you know that while a large portion of the population give cash donations on a regular basis while living, very few continue to show their support through bequests made in their wills? This is perhaps the easiest and most convenient way to ensure that your charity continues to be supported – a continuing legacy. Please discuss this important option with your lawyer or estate planner at the time of making your will so your charity will continue to benefit from your giving.

While making a bequest through your will is vitally important, there are also other methods of giving that are often overlooked and undervalued.

We, at the Canadian Book of Charities, have compiled a short list to provide you with additional ways to consider donating to your favourite charity.

Life Insurance
Purchasing an additional life insurance policy and designating your specific charity as the beneficiary is an excellent way to plan your giving. This method allows you to be able to make a larger gift than usual, as the premiums can be either lump sum payments or made monthly over a span of time.

Read more about Life Insurance Giving…

Another advantage to a life insurance planned giving account is that little monitoring is necessary after the initial paperwork has been completed.

One other notable benefit to this method is that the proceeds of this type of bequest will escape any possible claims by any creditors of your estate and will not be subject to probate taxes payable in connection with the value of your estate.


Annuity
An annuity is a method that allows you, the donor, to retain some benefit from your donation during your lifetime, yet still ensures that your designated charity will receive your gift upon your demise. It can provide the donor (you) with guaranteed income payments for life based on life expectancy tables and stated interest rates and similar to a life insurance policy, the terms of an annuity can be tailored to reflect the circumstances and goals of the donor.

There are a number of charities who have established their own regular annuity fundraising programs so check carefully to see if your charity of choice offers this service.


Endowments
An endowment is a fund that keeps on giving. You can set up an Endowment Fund by using cash, securities, paid-up life insurance policies as well as personal or real property. Contributions to an Endowment Fund can have significant income tax advantages but check with your financial planner or Revenue Canada for exact legislation and rulings.


Gifts of Retirement Plans
RRSP’s (Registered Retirement Saving Plans) and/or RRIF’s (Registered Retirement Income Funds) are popular Canadian vehicles for saving money, not only for later use during retirement but also for the tax benefits provided immediately when filing income taxes.

Read more here about Gifts of Retirement Plans -

Spouses can leave an RRSP or RRIF to a surviving spouse in a Will and income tax is not normally paid on this transfer of assets. However, when the surviving spouse dies, the balance of the RRSP or RRIF is deemed to be sold at time of death and the full income will be taken into an estate and taxed accordingly.

In the 2000 Federal Budget, revisions were announced to allow donations of RRSP's or RRIF's remaining after the surviving spouse has died, and which were designated in a Will, to registered charities that would qualify for an income tax credit on the gift. This is another excellent way to donate to the charity of your choice.


Gifts of Real Estate
There are three ways to makes gifts through real estate – outright deeding of property; transfer of residual interest in the property or fund a charitable remainder trust. Gifts of property can be made at any time during your life or by including them in your Will. By donating through this method, appreciable tax savings can be realized as the difference between original purchase price and assessed value (on property other than your principal residence) becomes taxable through the capital gains act.

You may bequest an outright gift to a charity of your choice but still continue to reside on your property until your demise. You accomplish this by giving the asset but retaining what is called "a life interest". In this case, you receive a tax receipt for the amount by which the appraised value of the property exceeds the value of your retained life interest. This can be particularly attractive for someone in their senior years as you can receive a sizeable tax receipt for your gift and still continue to enjoy its use.


Gift of Listed Securities
By making a gift of shares of a publicly traded company to a registered charity of your choice, you can reap several financial benefits including opportunities to substantially reduce your personal income taxes.

Listed securities include shares (stocks), bonds, mutual funds, warrants and futures traded on approved stock exchanges in Canada and certain other countries. Fair market value is established on the closing price of the security on the date of the gift. In the case of mutual funds, it is the "bid" price on the date of the gift.


Inter Vivos Trust
An “Inter Vivos Trust” is basically a trust that is established during your lifetime. The creation of a trust involves a transfer of property by a donor (being the settlor of the trust) to a person (being the trustee), to be held for the benefit of one or more persons/organizations (being the beneficiaries of the trust) in accordance with certain terms.

One benefit of an inter vivos trust is that the assets will not form part of the estate of the donor and will therefore not be subjected to probate taxes or other creditor’s claims upon your demise. The choice off trustees is always very important and the administrative provisions of the trust instrument should ensure that the terms of the trust can be properly carried out.


Private Foundations
Setting up a private foundation to benefit a charity has a number of characteristics which are appealing. You can set up a private foundation and structure it to reflect your normal pattern of giving well beyond your lifetime. This provides continuity and gives you a choice over the control of your bequests when you are no longer alive.

A ‘foundation’ can be established by incorporation or by means of a trust and charitable registration with Revenue Canada may be obtained. Discuss this method carefully with your lawyer as directors/trustees will need to be appointed who will be subject to certain duties and obligations required by law.