GIVING
Charitable Gifts Matrix
| 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 donate |
| A Gift of Publicly Listed Securities | 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 | 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 (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 Insurance | 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 Beneficiary can be changed during donor’s lifetime | 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 Gifts not subject to probate if charity named as the beneficiary | 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 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 estate | All individuals (any age), but especially older persons with few or no heirs |
| Shares in a Privately- Owned Corporation | Share may pay dividends | 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 |
| 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 |