Charitable Gift Program


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RBC Phillips, Hager & North Charitable Gift Fund program. A private foundation without the administrative issues typically associated with one.

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Charitable Gift Program

  1. 1. C haritable G ift P roGramHelping you create a lasting legacy
  2. 2. It’s a good feeling to be able to support charitable causes you care about in a meaningful way. Whether you want to help fund life-saving medical research or health-care improvements, encourage artistic, environmental or educational endeavours, or help people in need, your charitable gift can make a real difference in the lives of deserving people. If you’re considering how to create your charitable legacy, you have many choices. Especially if you want to give an enduring gift, you may want to establish an endowment fund or a private foundation. Both options, while certainly worth considering, involve an ongoing time commitment to handle administrative duties, which can sometimes overshadow the real pleasure of giving. If you prefer a more convenient alternative that enables you to make a lasting gift, while enjoying significant tax advantages, the Charitable Gift Program may be right for you.1 Charitable Gift Program
  3. 3. h elPinG you Createyour leG aCyThe Charitable Gift Program, offered by RBC Phillips,Hager & North Investment Counsel in partnershipwith the Charitable Gift Funds Canada Foundation(CGFCF), is specifically designed for individuals andfamilies wishing to support charitable causes in ameaningful way, without the time and cost associatedwith establishing a private foundation. It is an easy,convenient way to support charitable causes you careabout, today and in the future, while receiving importanttax benefits.Through this program, you can make initial and ongoingcontributions to a charitable gift fund administered bythe CGFCF, one of the leading charitable foundations inthe country. The program offers several advantages:FLEXIBILITYYou can contribute cash, appreciated publiclylisted securities or other assets to the fund, thenrecommend grants to the charitable organizationsof your choice based on the amount of accumulatedinvestment earnings available in your account.You can also make a deferred contribution bynaming your charitable gift fund account as thebeneficiary of a charitable bequest, a life insurance only today but in the future as well. Additionalpolicy, a qualified registered retirement plan, a contributions can be made to a charitable giftcharitable remainder trust or another existing fund at any time, producing a generous tax creditprivate foundation. in the year of the gift.IMMEDIATE TAX BENEFIT ELIGIBILITY ENDURING FAMILY LEGACYYou receive an official charitable donation receipt The program helps you create an enduring familyfor the full fair market value of your contribution. legacy fund. Like a private foundation, you can alsoGifts of qualifying securities may also be eligible for give your fund a unique name that reflects youra capital gains tax exemption. family’s legacy, such as The Smith Family Fund for the Arts. You can also name grant advisors andSIMPLICITY successors to your fund so your family’s legacyYou enjoy simplified, comprehensive administration continues. If there are no surviving successors afterof your charitable gift planning over time. A single you pass away, CGFCF will continue your legacy bycontribution can benefit multiple charities, not awarding grants to eligible charities consistent with your original intent. Charitable Gift Program 2
  4. 4. GRANT RECOMMENDATION PRIVILEGES ChoosinG the riGht oPtion for youIn addition to being immediately entitledto generous tax credits for all contributions, You have many options when it comes to creatingyou can make recommendations on how your charitable legacy. Most commonly, peopleaccount earnings are distributed to your simply give cash or donate property. Other optionsfavourite charities throughout your lifetime include leaving a bequest in your Will, donating anand, if desired, in perpetuity. insurance policy on your life, or opening a charitable gift annuity that provides income. For larger gifts,INVESTMENT STRATEGY RECOMMENDATIONS you might consider a charitable remainder trust,You can recommend an investment strategy endowment fund, or private foundation.for your gift contributions, choosing from a A CONVENIENT ALTERNATIVEwide range of options professionally managedby RBC Phillips, Hager & North Investment The Charitable Gift Program is designed as aCounsel. convenient alternative to establishing a private foundation that is both cost effective and tax efficient.ENHANCED GIVING POWER OVER TIME Starting a private foundation in Canada canAny potential growth in assets realized within involve considerable start-up costs and ongoingyour account accumulates tax free, enhancing administrative expenses, such as the annual filingyour ability to recommend increasingly larger of CRA information and tax returns. With a charitablecharitable grants in the future. gift fund, there are no set-up costs and just a lowADMINISTRATION FEE annual management fee.Each charitable gift fund account is allocated an A charitable gift fund also offers important taxannual administration fee of up to 0.75% of the advantages compared to a private foundation.account’s assets to pay for the CGFCF’s operating When you contribute qualifying appreciated securitiesexpenses. This fee is reduced for accounts with to a charitable gift fund, the gain is exempt from$2.5 million or more in assets. taxation. A private foundation does not receive this preferential tax treatment. The main advantage of a private foundation is the high level of direct control it provides. However, if you do not require this degree of control, or would prefer to be free of the administrative obligations that having this control entails, then you may want to consider a charitable gift fund instead. The following page provides an overview of the key features of a charitable gift fund compared to both a private foundation and an outright gift. 3 Charitable Gift Program
  5. 5. Charitable Gift Program 4
  6. 6. CreatinG your leGaCyONE-TIME GIFT TO A CHARITABLE ORGANIZATIONDescription Gift options Taxes Advantages Considerationsn A CRA-registered n Cash or other n Donation receipts n Immediate benefit n Some charities charitable property donated issued for full fair to charity unable to accept organization that directly to a chosen market value of n Current income tax donated securities carries out approved charity and used contributions made credits to reduce n One-time giving charitable activities to fund approved n Gifts of appreciated other tax owing versus an and can receive charitable activities securities entitled enduring legacy funding from donors undertaken by the to preferential n Donations must be directly and from recipient organization tax treatment on other sources such made annually to capital gains as foundations receive ongoing n Donation receipts tax benefits issued for full fair market value of estate giftsRBC PHILLIPS, HAGER & NORTH INVESTMENT COUNSEL CHARITABLE GIFT PROGRAMDescription Gift options Taxes Advantages Considerationsn A fund managed n Cash or other n Donation receipts n No start-up costs, low n Board of Directors by CGFCF, a non- property, such issued for full fair fees and expenses of CGFCF has profit, grant-making as appreciated market value of n Minimum contribution final authority on organization securities, to contributions made grant allocations of just $25,000 registered as a public establish and n Gifts of appreciated n Donations are foundation with the maintain a perpetual n Professional advice securities entitled irrevocable – donors CRA specializing in legacy fund n Tax credits to reduce to preferential give up control of the the management n Proceeds fund grants income taxes tax treatment on donated assets of charitable gift to other qualified capital gains n An enduring gift that fund accounts organizations for n Donation receipts can grow over timen Fund-holders approved charitable issued for full fair n Anonymous if desired can recommend activities undertaken market value of annual grants from by the recipient n Successors can be estate gifts investment earnings organizations named to oversee and to qualified charities sustain legacy fundSETTING UP YOUR OWN PRIVATE FOUNDATIONDescription Gift options Taxes Advantages Considerationsn A non-profit, grant- n Cash or other property n Donation receipts n Full control n Start-up costs making organization donated directly to issued for full fair over charitable $5,000-$25,000 registered as a private the foundation market value of distributions n Higher legal and foundation with n Proceeds fund grants contributions made maintenance costs the CRA to other qualified n Gifts of appreciated n Minimum contributionn A private entity that organizations for securities not entitled typically $300,000 receives most of its approved charitable to preferential funding from one activities undertaken tax treatment on n Full liability for source, usually an by recipient charitable capital gains CRA filings and individual, family organizations administrative n Donation receipts or corporation compliance issued for full fair market value of estate gifts 5 Charitable Gift Program
  7. 7. helPinG you Create a leGaCy of GivinGCHARITABLE GIFT FUNDS CANADA FOUNDATIONWe are pleased to offer the Charitable Gift Program in partnership withthe Charitable Gift Funds Canada Foundation, an independent, non-profitcharitable organization registered as a public foundation with the CRA.Established in 2003, the foundation specializes in the managementand administration of charitable gift funds and is dedicated to helpingdonors increase and sustain their charitable giving to deservingorganizations across Canada.Choosing how to create your legacy is a very personal decision, but we’rehere to help make it easier. If you want a convenient way to create anenduring legacy, while enjoying important tax benefits, the Charitable GiftProgram may be a good choice for you. Please contact your InvestmentCounsellor for more information. Charitable Gift Program 6
  8. 8. For more information about charitable giving, please contact your Investment Counsellor.This publication has been prepared for use by RBC Phillips, Hager & North Investment Counsel Inc. and RBC Global Asset Management Inc. Thestrategies, advice and technical content in this publication are provided for the general guidance and benefit of our clients, based on information thatwe believe to be accurate, but we cannot guarantee its accuracy or completeness. This publication is not intended as nor does it constitute tax or legaladvice. Readers should consult their own lawyer, accountant or other professional advisor when planning to implement a strategy. This will ensure thattheir own circumstances have been considered properly and that action is taken on the latest available information.RBC Phillips, Hager & North Investment Counsel Inc., RBC Global Asset Management Inc. and Royal Bank of Canada are all separate corporate entitiesthat are affiliated. Investment Counsellors are employees of RBC Phillips, Hager & North Investment Counsel Inc. or RBC Global Asset Management Inc.RBC Phillips, Hager & North Investment Counsel is a brand name used by RBC Phillips, Hager & North Investment Counsel Inc. and the private clientbusiness of RBC Global Asset Management Inc. ® Registered trademark of Royal Bank of Canada. TM Trademark of Royal Bank of Canada. Used underlicence. © RBC Phillips, Hager & North Investment Counsel Inc. 2010. All rights reserved. PH&NCHARITY (10/2010)