What is Planned Giving?

Planned Giving simply means planning now for a gift which a charity will receive sometime in the future. A donor makes a commitment to make a future gift through their Will, life insurance policy or a range of other gift options, often with excellent tax advantages.

Planned gifts should be carefully considered to ensure that your philanthropic dreams to help Good Shepherd are met while maximizing the tax benefit to you.

What Are the Benefits of Giving a Planned Gift?

Gift planning can improve a donor's financial position, and can allow many people to make a bigger impact than they ever thought possible. With sound financial planning, gifts of this nature enable the donor to enjoy a tax advantage, while making a significant difference in their community. In summary, here are the chief benefits to a donor making a planned gift:

  1. Significant tax benefits while maintaining financial security for donor and family
  2. Ability to make a larger gift to charity than otherwise might be possible
  3. Founding a commemorative gift in the name of someone special
  4. Providing for an endowment which will help future generations
  5. Helping to avoid or reduce capital gains taxation
  6. Passing assets on to family members at a reduced tax cost

The chief benefits to Good Shepherd are:

  1. Long term stability for carrying out our mission of:  Charity Unlimited…Never Stop Loving
  2. Security for future financial planning
  3. Ability to recognize donor generosity in the long term

Below are some of the ways you can make a planned gift:

 

Set up an Endowment Fund in your name:

  1. Endowments are sometimes referred to as "everlasting gifts". With most types of planned giving, setting up an endowment is an additional option. Gifts identified as endowments remain intact and only the earned interest is used by the charity.
  2. Gifts established as endowments are eligible for charitable tax receipts.
  3. Satisfaction comes from knowing that the gift you are making will go on working for the benefit of others, after you are gone.
  4. Endowments are important to charities, as they establish a basis for long-term planning.
  5. Often a family will set up an endowment in the name of a loved one and can contribute to the fund over a number of years.
  6. Endowments can also be set up from the various planned gifts options described below.

 Leave a Bequest in your Will

  1. Bequests are the most common form of planned giving. When your estate is settled, the charitable gift stipulated in your will is forwarded to the charity you had chosen. Then, your estate is issued a charitable credit for the full value of the bequest.
  2. Bequests can be designated for a specific purpose or can be "unrestricted." In the latter case, the charity would put the gift toward the area of greatest need.
  3. The benefits of a bequest are that you get to use your assets during your lifetime and your estate receives a tax credit when the gift is made after your death. Also, you can tailor the details of your bequest to make it meaningful to you personally.

 Gifts of Securities and Stock

  1. Gifts of securities are gifts of publicly traded stocks, bonds or mutual funds.
  2. Recent changes to Canadian tax law have entirely eliminated the capital gains tax on publicly traded securities that are donated to charities. At the same time, the donor receives a charitable receipt for the market value of the gift. These recent changes mean that by making a gift of equities, bonds, or mutual fund units, your capital gain tax is eliminated. This new provision provides an opportunity to eliminate a significant tax liability that would otherwise eventually have to be paid.
  3. A gift of publicly traded securities can provide you with an unexpected means to make a significant contribution to Good Shepherd at a relatively low-cost to you. This type of planned gift enables a donor to make a substantial charitable gift, while not tapping into current or future cash resources.
  4. Sometimes the tax advantages are so significant in this option that when utilized in combination with other financial planning strategies, may actually not deplete the estate value at all.

 Life Insurance

  1. A significant benefit of planned giving through insurance policies is that you may receive tax benefits immediately. By purchasing a life insurance policy now and transferring ownership to the charity of your choice, you will receive tax receipts for the premiums you pay each year.
  2. Tax regulations for gifts made through life insurance bring maximum tax credits, sometimes making this type of planned gift more beneficial than a cash gift left through your estate.
  3. As an option, a donor may purchase a life insurance policy and have the benefits payable to their estate. Then, through the stipulations of their will, the estate could make a charitable gift which would create tax credits that would offset capital gains taxes.
  4. Existing policies may be transferred, or new ones may be taken out.
  5. A gift of an insurance policy does not reduce the size of your estate.

 Annuities

  1. This unique planned giving opportunity provides income for the donor, while they are making their charitable gift. A gift annuity enables a donor to make a gift and at the same time, receive guaranteed income for their lifetime. The remainder goes to the charity.
  2. Part of original principle may be eligible for an up-front tax receipt.
  3. Income to donor from annuity is non-taxable.
  4. Donors get to see their gift being put to use during their lifetime.
  5. (Donors must be 60 years of age or older.)

Charitable Remainder Trust

  1. This planned gift can provide not only for the charity, but also for the donor.
  2. The donor creates a trust fund which establishes an irrevocable gift of the remaining principal for the charity and retains the interest income for the donor for their lifetime or for a set period of years.
  3. Only the interest can be used and cannot encroach on the principal.
  4. The donor will be entitled to a donation receipt for the present value of the remainder trust.
  5. This type of planned gift is ideal for donors 65 years or older, who wish to make a charitable gift but still need the income the trust can provide.

Pooled Income Funds

  1. The name describes this planned gift well. A charity accepts gifts from many donors into a fund and distributes the income of the fund to each donor - or recipient of the donor's choosing.
  2. Each income recipient receives income in proportion to their share of the fund. For making a gift to a pooled fund, a donor receives a charitable income tax deduction and may avoid capital gains tax.
  3. When an income beneficiary passes away, the charity then receives the donor's portion of the fund.

 Residual Interest

  1. Similar to a Charitable Remainder Trust, except it refers to gifts of tangible property, such as real estate or art work.
  2. Ownership of the gift is transferred to the charity, but the donor retains possession until a later date.

Gifts in Kind and Real Estate

  1. Gifts of tangible property are often given to charities, for the enrichment of surroundings and the pleasure of many
  2. Gifts worth $1,000 or more must be independently appraised in order to establish fair market value, which will define the amount of the charitable tax receipt
  3. Contribution limitations for gifts-in-kind are the same as for gifts of cash
  4. Real estate is not considered to be tangible property, but similar guidelines apply

Discuss your Gift with your Financial Planner

Making a planned gift is a significant step to take and we encourage you to discuss it with your financial advisor or estate planner. Good Shepherd will be pleased to work with your advisors on a confidential basis to ensure that you and your family’s financial and philanthropic goals are met.

Any gift you make to our programs will be appreciated and you can be assured that your contribution will be put to work to meet our mission of: Charity Unlimited…Never Stop Loving

For more information on Planned Giving, please call Cathy Wellwood at 905 528-6565 x. 3338.

Francis McMullin

In Memory
of
Francis McMullin
1913–2006 ~

Francis McMullin was born in Antigonish, Nova Scotia, on July 12, 1913. When the Great Depression hit in the 1930s, he was itinerant for a time, riding the rails and relying on food banks and hostels to survive.

Francis served in the Royal Canadian Air Force from 1940
to 1945, supporting the Canadian war effort during World War II as an aircraft mechanic. He was the recipient of several medals, including the War Services Badge and the Defense Medal.

After the War, Francis made Hamilton his home, where he worked as an auto mechanic. In 1985, he married Gladys Wicks, who died after 11 years of marriage.

Francis passed away on December 2, 2006, leaving his entire estate to Good Shepherd. At his service, donations to Good Shepherd were requested in lieu of flowers.

His step-son Victor delivered the cheque to the Men’s Centre. “He was a good man,” said Victor. “He cared about people. “
We thank you, Francis, for leaving a legacy of love in this community.

If you are interested in leaving a gift to Good Shepherd in your Will, please contact Cathy Wellwood, Chief Development Officer, at 905-528-6565 ext. 3338.