Plan now to give later

Hey there, time traveller!
This article was published 11/06/2022 (926 days ago), so information in it may no longer be current.

Planned giving is a documented intention to leave a gift to an organization close to your heart. It is a way to create and preserve your legacy that can be part of your current financial plan, your will or your estate plan. It can also be a way to ensure the things you love and are most important to you can continue even after you’re gone.

Diane Lambert Shack, leadership and legacy officer with The Salvation Army Prairie Division, explains that a person’s approach to philanthropy can change as you move through the seasons of your life.

“You could decide at age 16 to volunteer. Then when you get your first job and start making money, you make an annual gift at Christmas. When you get married, you decide not to have wedding gifts and you make donations to a charity instead. Later, it grows further because you meet with your financial planner to determine what you’re going to do down the road with your estate and your last will and testament with your lawyer,” she illustrates.

When Shack converses with prospective donors, she takes the time to get to know them each individually to understand their interests and motivations.

“You have to give to that cause that pulls at your heartstrings and motivates you to have an impact or leave a legacy,” she says.

If a donor decides to include The Salvation Army in their plans, Shack will introduce them to a variety of programs and projects they might be interested in supporting, including the many ways they can donate.

Giving in the present is a wonderful way to see the tangible difference your contribution has on an organization. Common forms include monthly or yearly gifts or commemorative giving, where you ask friends and family to donate to your charity of choice in lieu of gifts.

Planned giving, both in the present and posthumously, can offer material benefits beyond altruism, explains MaryAnn Kokan-Nyhof, certified financial planner, certified life underwriter and branch leader at the Kilcona branch of Desjardins Financial Security Investments Inc.

“The conversation starts usually with a tax return. I will see the receipt for charitable giving and I will ask ‘Do these places have a special meaning for you?’ and there’s usually a story for everybody. So that’s how the conversation starts and then I launch into the discussion of ‘Did you know that not only can you give, there are ways to give charitably where you can benefit in terms of tax savings?’ and many people don’t know that,” she says.

You likely know that donations can provide some tax relief come filing time. As your investments mature or you want to make changes to your portfolio, designating them to a charity can avoid additional taxes associated with cashing out or transferring assets.

“If you have a stock portfolio that has increased in value, if you sell those shares, you’re going to pay tax on your capital gain, but if you donate those shares, you will not pay any tax and you will get a charitable donation receipt. So, it’s a double benefit,” Kokan-Nyhof explains.

Posthumous gifts tend to be larger and therefore need to be arranged with a legal or financial authority to be carried out as instructed. Some forms of major gifts include bequests, leaving a sum or percentage of your estate to a charity; donations of shares, stocks, RRSPs or TFSAs; and the purchase of an annuity or the creation of an endowment or trust through a foundation that will manage your donation and oversee its distribution over time. A planned gift doesn’t depend on a donor’s current wealth: it can come from life insurance, equity or real estate holdings, for example.

To find out more about planned giving options, contact your favourite non-profit or financial planner.