Charity: Give Now Or Later? Which Is Better And How?

If you plan your giving properly, not only can it be very rewarding, but it can result in you being able to gift more than you thought you were able to afford.

An improper plan can result in an unnecessary reduction of the amount you intend on gifting. Working with an experienced financial planner will provide you with proper advice to uncover the most tax efficient way to get your money into the hands of the charities that matter most to you. Keep in mind you have a lot of choices, with more than 85,000 charities registered with the Canada Revenue Agency.

Top seven of the best charitable gifting options available to you:

  1. The most common method is a simple bequest in your will. You can leave a percentage of your estate or a dollar amount. Since you are gifting at the end of your life, you hold onto maximum flexibility on how much you give and where it will go. However, bequests can be challenged by your beneficiaries and overturned, and if your estate ends up not having the assets you intend to gift, your gifting strategy can unravel.
  2. You can donate your RSP/RIF or TFSA by nominating the charity as your beneficiary. The tax credit your estate gets from the TFSA donation can offset other taxes your estate will pay as selling your TFSA does not trigger taxes.
  3. You can donate stock shares, and in doing this you avoid paying capital gains tax on the growth of your shares, and the full value of your stocks count as a charitable tax credit.
  4. Donate a permanent life insurance policy because all the growth is tax-free and is transferred outside of your estate directly to your charity.

There are two ways to donate your life insurance:

  1. You can have your estate save tax by ensuring the charity gets the death benefit of your insurance at the time of your death.
  2. You can save tax while you are living by nominating the charity to be the owner of the policy and its beneficiary; you get a charitable tax receipt on the amount of premiums you pay to the policy. Each year, a new premium paid results in a new charitable benefit to you.
  1. You can put property in a charitable remainder trust to be given to a charity. You use the property while you are still living, and if it generates income you keep receiving it while you are alive. You get your charitable receipt for taxes now, to use while you are still alive. When you pass on, your charity can sell the asset or use it themselves.
  1. You can set up your own, or become part of, another private foundation. You get a tax benefit right away. This is a great option if you want your family name associated with a foundation establishing recognition of your gifting for generations. Since it is a corporation it is private, it can live on forever, and you can keep control of how your money is spent.
  2. An endowment fund can be a less expensive option than setting up your own foundation. Here you can keep your funds separate or you can pool them with other funds of a charity, relying on the management of the charity. You get a taxable benefit right away. This allows you to create an ongoing legacy without needing to have any ongoing administration or ongoing involvement.


To discuss which option may be the best for your gift, feel free to reach out to me.

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