Dr. Roxanne Arnal, CFP® ,CLU®
Charitable giving offers numerous benefits, including improved mental and physical health, a sense of purpose and community, and, if structured correctly, tax advantages.
Recently I spoke with Kelsey Gagnon, Associate Director, Advancement, School of Optometry & Vision Science at the University of Waterloo about the Waterloo Eye Institute capital campaign and the ongoing needs of students. Fundraising for the profession is truly a never-ending endeavour and contributing to your alma mater can provide a legacy well after your time in school.
Give Now
Most of us write a cheque to our charities of choice and will receive a charitable donation receipt for the donation tax credit on tax filing. Another common method is donating through your corporation which can then be made with a pre-tax dollar, providing an easy way to upsize your donation. Online options, like this QR code, make it easy to give in support of the Waterloo Eye Institute.
Two Tax Breaks in One Donation
When you donate securities directly to a registered charity, you unlock two major tax advantages:
· Full Market Value Tax Receipt
You’ll receive a charitable donation receipt for the current market value of the securities.
· No Capital Gains Tax
Normally, selling appreciated securities means paying tax on 50% of the capital gain. However, if you donate them directly, that tax disappears making this especially valuable for investments that have grown substantially and are a great way to supersize your donation without using after tax income.
The University of Waterloo accepts securities and interested donors should contact Kelsey to receive a gift of securities form for completion. Once completed, take it with you to your financial advisor to process the share transfer.
Life Insurance: A Legacy That Lives On
When you no longer need your life insurance policy for its original intent, consider how it can be used to support your charitable efforts before you cancel the policy. There are three common ways to make your donation with life insurance:
· Name a Charity as Beneficiary
Your chosen charity receives the death benefit directly, and your estate gets a donation receipt to help offset final taxation.
·Transfer Ownership of an Existing Policy
This gives you an immediate tax receipt for the policy’s fair market value and future premiums you pay.
· Buy a New Policy for Charity
You’ll receive donation receipts for every premium payment, reducing your annual tax bill while supporting a cause you care about. You can read more about the university’s program head to the “How to give” page [How to give | Support Waterloo | University of Waterloo] on the website.
Donor-Advised Funds: Giving Made Easy
Not sure you’re ready to disburse all your donations right away or you have multiple causes you are looking to help; you can streamline your giving through a Donor-Advised Fund (DAF). Here’s what makes DAFs so appealing:
· Immediate Tax Deduction & Capital Gains Tax Avoidance
You get a tax break right away—even if you distribute the funds to charities over time. And just like with direct donations, moving appreciated investments into a DAF helps you sidestep capital gains tax.
· Tax-Free Growth
Your contributions can grow tax-free within the fund, boosting your future giving power.
· Build a Family Legacy
DAFs offer a way to involve your family in philanthropy, creating a lasting tradition without the complexity of a private foundation.
· Simplified Giving
One receipt, one account, and a streamlined process for managing your donations.
Conclusion
Making a meaningful charitable contribution while also being tax -savvy is easier than you think. Understanding the best method for your personal situation involves a little pre-planning and discussion with your advisor.
If you would like more information about the opportunities at the University of Waterloo, School of Optometry & Vision Science, you can reach Kelsey Gagnon at 519-502-3131 or via email kelsey.gagnon@uwaterloo.ca . Be sure to let her know of any special dedications or class group contributions.
Advisory
Roxanne Arnal is a Certified Financial Planner®, Chartered Life Underwriter®, former Optometrist, Professional Corporation President, and practice owner. She is dedicated to empowering individuals and their wealth by helping them make smart financial decisions that bring more joy to their lives.
Have more questions than answers? Educating is just one piece of being your personal Chief Financial Officer (CFO) that Roxanne offers. Call 780-261-3098 or email roxanne@c3wealthadvisors.ca today to discuss your charitable wishes.
This article is for information purposes only and is not a replacement for personalized financial planning. Errors and Omissions exempt.
