Most people, their families, or close friends have been assisted by a charitable
organization of some sort. It may have been a cancer support group, a school, a research
foundation or a local community association.
Most people have also made donations to one or more registered charities. They
recognize the pressing need for these dedicated groups in their local communities and
across the country. And people know that governments at all levels are dramatically
reducing their funding of social services. Charitable organizations face an increasing
need to raise funds from the public to continue their good work.
The most common method of funding charities is through fundraising campaigns to
solicit donations. The charity receives immediate funds to continue its work, and the
people making the donations receive a tax credit for their donation.
However, by planning your donations in a more systematic and long-term way, you
can make your money go further and provide the charity with a solid base of funding. Many
people also wish to set up plans that keep on giving after they’ve died so that the
charity of their choice can continue to help others long into the future.
There are numerous methods, besides occasional donations, through which you can
provide much-needed funding for charities:
A simple bequest in your will. It does not tie up your capital during your
lifetime, and you can change your decision any time prior to death.
A life insurance policy, owned by the charity, is easy to set up and administer,
and premium payments provide tax credits to you.
A prescribed annuity can provide funds for annual gifts to a charity during your
lifetime, and the charity can receive any balance on your death through your estate.
You can make designated interest payments to a charity from a specific amount of
capital. This provides annual gifts, but allows you to retain control of the capital for
emergencies.
The tax credits that are available from these and other methods of planned
charitable giving will produce cash for other uses. This could include additional
charitable giving if you wish to maximize your donations. Revenue Canada recently reported
that only about $3 billion of the $8 billion donated annually to registered charities in
Canada is claimed on income tax forms. Don’t overlook this valuable tax concession
when completing your return.
There is no question that the services provided by the 75,000 local or national
registered charities play a major role in keeping our communities and the country as a
whole strong and responsive. And for most people, there is personal joy in the act of
giving.
Your life insurance advisor help you make your dollars go further. As well, your
help to the registered charity of your choice can be more effective by taking a planned
approach to charitable giving.
