Donate through your financial plan and save more on taxes

Giving back is a way of life for many Canadians, from food banks to local foundations. They are also keenly aware that it is not a short-term commitment. But is there a better way to donate to a charity than simply cutting them a cheque? Yes - donate through your financial plan!

The Mackenzie Charitable Giving Program is designed to easily integrate charitable giving into your overall financial plan. Simple and convenient, this solution provides immediate tax benefits while providing the power to oversee grant amounts to your favourite charities and grow your donation to make an even greater impact over time than donating directly to those charities.

4 reasons you should consider the Mackenzie Charitable Giving Program

1.      Tax efficiency

You will receive an immediate tax receipt for your donation. Also, capital gains taxes are eliminated for in-kind donations of publicly listed stocks, bonds, and mutual funds that have appreciated over the long term. I can help apply the resulting donation tax credit to offset your other income tax liability in the current year or any of the following five years.

2.      Low-cost alternative

Compared with the expense of creating and maintaining a private foundation, the Mackenzie Charitable Giving Program is an inexpensive approach to managing a sizeable gift.

3.      Flexibility

As a donor, you may recommend grants to any number of charities or other institutions each year, with minimum grants of $250. Mackenzie ensures that eligibility requirements are met and distributes the grants.

4.      Convenience

The Mackenzie Charitable Giving Program simplifies your charitable giving experience by handling administrative tasks (i.e., record-keeping, grant reporting, and tax receipts) for each account.

In this example, Crystal would pay $1800 in capital gains tax if she donated in cash.

Here is how Crystal can save on taxes by donating in kind

Crystal Westlake is 46 years old, with $135,000 in non-registered investment assets. She wants to donate a $25,000 mutual fund to establish her charitable giving account.

Crystal’s Problem

She is unsure how the tax savings would apply to a donation in-kind as opposed to selling the fund and donating the proceeds in cash.

Crystal’s solution

By making an in-kind donation, Crystal will receive a $9,000 charitable donation tax credit that she can apply against her other income tax for the current year or in any of the next five years. However, by selling the fund and donating the cash, she will only have a net tax savings of $7,200, as she will have to pay $1,800 in tax on the capital gain that resulted from the sale.

How do you choose the right charity for you?

Choosing which charity to donate to can be a hard decision. To help you decide, check out Charity Intelligence. The organization rates over 800 charities and produces a profile based on their rating. Another great site is CRA, which maintains a list of charities and certain other qualified donees.

Contact me at 604.940.8617 to learn more about how this program can meet your charitable giving needs through your financial plan.

Chart sourced from Mackenzie Investments