GIVING

Charitable Gifts Matrix

 
 
Type of GiftBenefits to Charitable OrganizationsBenefits to the DonorGift ExamplesMost Appropriate For
Gift of CashAvailable 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 donate
A Gift of Publicly Listed SecuritiesImmediate 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 PolicyImmediate 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 (generally ages 30–60) who i) have an older policy no longer needed, or ii) want to make a large gift but have limited resources
Life InsuranceWill receive death proceeds unless donor changes beneficiary designationSatisfaction of providing a future gift while retaining full control of policy

Donation receipt to estate for full value of death proceeds

Beneficiary can be changed during donor’s lifetime
Any type of life insurance policyPersons (any age) whose personal needs and family situation may be subject to change
Bequest of Retirement Plan AccumulationsFuture gift provided beneficiary designation(s) and/ or bequest wording are not changedSatisfaction of providing a possible future gift while preserving personal security

Gift receipt that offsets tax on distribution of retirement funds

Gifts not subject to probate if charity named as the beneficiary
Registered Retirement Savings Plan (RRSP) and Registered Retirement Income Fund (RRIF) accumulationsAll individuals, but especially single persons, and surviving spouses who have made other provisions for heirs
Bequest by WillExpectancy of future gift provided that bequest wording is not changed

Bequests tend to be larger than gifts during lifetime

Often have fewer restrictions

Most can be used immediately
Satisfaction of providing for future gift while retaining full control of property

Donation receipt for use with final income tax return

Will can be changed at any time until death

Maximum donation credit of 100% of net income on final return

Any excess can be carried back one year

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, residue of estateAll individuals (any age), but especially older persons with few or no heirs
Shares in a Privately- Owned CorporationShare may pay dividendsPublic 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 corporationEntrepreneurs who are philanthropic

Venture philanthropists
Gift of Real EstateProceeds 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
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 estatePersons (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