Planned Giving and Canadian Charities

November 26, 2014

CBC story on “Canada Revenue Agency privacy breach leaks prominent Canadians’ tax details”

The CBC has disclosed that CRA had provided them with a list of private information on taxpayers who had applied for certain tax benefits as a result of donating cultural property through the Cultural Property Export Review Board.   Disclosure of confidential taxpayer information is a serious issue and CRA has released a statement apologizing for the laps and confirming that the CRA will contact each of the taxpayers who were affected. This disclosure appears to be accidental and a mistake on CRA's part.  

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September 01, 2014

Finance consults on draft tax legislation on bequests to Canadian charities and trust taxation

Following up on the 2014 Budget, Finance has released draft tax legislation for consultation.  The changes with respect to bequests to registered charities are from Budget 2014, and will allow some greater flexibility for claiming the charitable donations against either the estate or a trust.   This bequest proposal has generally been welcomed.  It will deal with some situations were there is a mismatch between the income a deceased person or their estate has and the amount of gift left to charity.   

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March 21, 2014

CRA letter on charitable gifts by secondary will

The CRA recently released a letter which discusses whether a taxpayer's estate was entitled to donation tax credits claimed for a charitable gift made by an individual in her secondary will. The use of a Primary and Secondary Will may be for a number of reasons, although typically in Ontario  the assets that don't require probate are placed in a different will to those assets that do require probate.   In this way some of the probate tax can be avoided.   The letter discusses various issues such as whether the trustees had the discretion to make a gift to a Charity and the factors considered when determining whether a donation to a charity has been made by a taxpayer in their will.

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February 10, 2014

2014 Federal Budget and its Impact on Canadian Charities

Today Finance Minister Jim Flaherty introduced the Canadian Federal Budget 2014.  The budget had a large number of provisions dealing with non-profits and charities. Here are some excerpts from the Federal Budget in one PDF document.    Overall I was very pleased with the provisions of the budget dealing with charities.

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January 27, 2014

The Globe and Mail: ‘Forever’ falls out of fashion in charitable giving

The Globe and Mail recently had an article which discusses the concept of perpetual endowments as well as the use of donor advised funds and bequests. Read article >

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July 04, 2013

Planned Giving and Professional Advisors - The Why and How to Involve Professional Advisors

In this article I discuss the importance of Canadian charities involving professional advisors in their planned giving efforts.

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July 04, 2013

Starting a Basic Planned Giving Program for a Canadian Charity -  A Lawyer’s Perspective

In this article I provide some suggestions to charities in Canada as to how they can easily start a planned giving program for their charity.

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July 04, 2013

What is planned giving?

In this article I discuss different planned giving vehicles in Canada.

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June 14, 2013

New CRA Application for “Municipal or public bodies performing a function of government in Canada”

The CRA has just released its new process for recognizing “municipal or public bodies performing a function of government in Canada”.  Here is a PDF OF THE ARTICLE This will be of particular interest to Aboriginal bands, school boards and others who may wish to obtain this recognition as it makes them a qualified donee and therefore able to issue official donation receipts and also more easily receive funds from other Canadian charities.  We hope that this new process will facilitate philanthropy in the Aboriginal space.  There are probably over a thousand organizations that could one day be listed on the CRA website, which will make donations to them far simpler and easier.  It is important to note that as of January 1, 2014 for a group to be recognized under the category “municipal or public bodies performing a function of government in Canada” it cannot self-assess but must be on the list.  Some organizations will want to proceed quickly with the process as CRA has not set out a service standard yet and therefore it is difficult to know how long the process will take.  It is also interesting to note that “...organizations that apply before January 1, 2014, and that can show that they met the requirements to be a municipal or public body performing a function of government in Canada as of January 1, 2012, will be given qualified donee status retroactive to that date.”  Although a lawyer is not required to send the letter to CRA some organizations may wish to retain legal counsel to assist with this and other matters such as appropriate issuance of receipts and required books and records. 

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March 10, 2013

AFP Greater Toronto Chapter Fundraising Day 2013 - Planned Giving Institute - June 5, 2013

On June 5, 2013, Trevor Clark and myself will be delivering the “Planned Giving Institute” for AFP Toronto’s Fundraising Day.

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February 11, 2013

House of Commons Finance Committee releases report today on Tax Incentives for Charitable Giving

Today the House of Commons Standing Committee on Finance (FINA) released its much anticipated report on Tax Incentives for Charitable Giving in Canada.  The report discuss “Charitable Donations and Donors in Canada”, “The Regulation of Charities”, “Tax Incentives and their Estimated Federal Fiscal Cost”  as well as specific proposals such as Charitable Donations Tax Credit Thresholds and Rates and Donations of Real Property and Shares of Private and Public Corporations.  There is also discussions of bequests and tax fairness as well transparency and accountability of charities.

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September 03, 2012

CRA letter on tax implications of donation of newly acquired life insurance policy to charity

The CRA recently sent a letter discussing the tax implications of a donor making a gift of a newly acquired life insurance policy to a registered charity.

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August 13, 2012

CRA letter on dates and value to be used on official donation receipt for bequest under will

Here is a CRA letter which discusses the dates and value to be used on official donation receipts for a bequest under will.

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April 04, 2011

Leave a Legacy Community Outreach Program -“You Don’t Need to be Rich to be a Philanthropist”

I will be co-presenting for Canadian Association of Gift Planners Greater Toronto Area RoundTable on June 13th at 1:30 – 3:00 p.m. on “You Don’t Need to be Rich to be a Philanthropist: Making an impact with your charitable giving” at the Toronto Reference Library.

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December 21, 2010

Blumbergs’ Canadian Charity Law List - December 2010

Here is a copy of the Blumbergs’ Canadian Charity Law List for December 2010.

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December 13, 2010

CRA letter on Canadian charities and alter ego trusts

Here is a recent CRA letter dealing with “If, as a consequence of a gift, a charity holds a beneficial interest in an alter ego trust, will the restriction in subsection 118.1(13) apply in respect of the gift?”

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November 12, 2010

Determining the “Cost” of Life Insurance Policies as a Charitable Gift when transfer to charity

Here is a letter from CRA in response to a question about valuing a life insurance policy when it is transferred from a non-arm’s length person to a donor and subsequently gifted to a qualified donee.  It deals with the deemed fair market value rules.  Determining_the_Cost_of_Life_Insurance_Policies_as_a_Charitable_Gift.pdf

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September 21, 2010

Can spouse claim a charitable donation previously reported and carried forward on a spouse’s return

This CRA letter deals with “Whether, in a subsequent year, a taxpayer can claim charitable donations previously reported and carried forward on a spouse or common law partner’s personal tax return.”  CRA’s position is yes.  “REASONS:  The CRA’s administrative practice allows a taxpayer to initially choose which spouse or common law partner will report a donation or gift and allows for the subsequent transfer of any carryforward balances from one to the other.”  Here is the full letter from CRA.

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August 15, 2010

Philanthropic Foundations Canada - program Global Giving - Possibilities and Pitfalls

I will be one of the presenters at an upcoming PFC program called Global Giving - Possibilities and Pitfalls.

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July 12, 2010

What is “cost” of life insurance when donating to registered charity?

In this letter CRA discusses “Whether the adjusted cost basis is a reasonable proxy for “cost” of an interest in a life insurance policy in applying the deeming provisions of 248(35) with respect to a gift to a qualified donee in certain circumstances.”

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June 03, 2010

Bequest giving in Canada - article by FLA Group on importance of bequest fundraising

Here is an article by FLA Group entitled “Legacy Marketing Overview March 2010”  The article has some interesting statistics and thoughts on the importance of encouraging bequest giving. I agree that Canadian charities do not spend enough time doing this type of planned gift and we are far behind places like the UK.  Hopefully this article will encourage some to put more time and resources into this area.

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June 02, 2010

Can Canadian employer in disaster provide financial assistance to employee extended family abroad?

The CRA recently discussed “Whether in the particular circumstances, financial assistance provided by an employer to its employees’ extended families in the XXXXX who were directly affected by the hurricanes and typhoons in XXXXX, would be taxable to the employees.”  The CRA concluded “Probably not, as long as it is a one-time payment that is not remitted to the employees directly and will not result in the employees foregoing any present or future employment compensation as a result thereof.”  CRA went on to state that “In these specific facts and circumstances, it is likely that the financial assistance is made in a personal capacity, for philanthropic reasons and not as a payment for services performed by, or conferred as a benefit to, the employees.”  CRA also noted that these funds in this circumstance would not be deductible to the Corporation either as a charitable donation under section 110.1 of the Act or “deductible under paragraph 18(1)(a) of the Act,  as the payments are not outlays or expenses made or incurred for the purpose of gaining or producing income from the Employer’s business.”

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June 01, 2010

Leaving a Bequest to a Canadian Charity - using a lawyer to avoid legal problems with bequests

Here is a short article Leaving a Bequest to a Canadian Charity - using a lawyer to avoid common legal problems with bequests - June 2010, which discusses the value of using an estate lawyer who is knowledgeable about bequests.

May 01, 2010

CRA letter on charitable donation of publicly listed shares and whether gift

Lengthy letter from CRA on “Whether donations to registered charities of shares listed on a designated stock exchange constitute gifts for the purpose of the deduction for gifts under subsection 110.1(1) of ITA?” and the answer is yes.

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March 04, 2010

Canadian Budget 2010 announces disbursement quota reform for Canadian charities

The Canadian federal government announced disbursement quota reform in the 2010 Budget to remove the 80/20 expenditure requirement for registered Canadian charities.  For many charities this will have no real impact - they were handily satisfying their disbursement quota requirements and for those that were not (except in extreme cases) CRA was not using the DQ to revoke charitable status.  As one observer noted on the changes “No more 80/20 ordinary gift. No more enduring property, including 10 year gifts. No more specified gifts. No more intercharity transfer rules based on original DQ designation. Just a simple obligation to use the equivalent of 3.5% based on previous 24 month market average for charitable purposes. ... The 3.5% obligation doesn’t kick in for charitable organizations until there is $100k in assets, while for foundations it stays at $25k.”  We will probably have a revised T3010 at some point to reflect these changes and one can expect with the simpler formula that in the future CRA will more vigorously enforce the DQ provisions as this will be easier to understand.  There is no cost associated with this change and a number of other proposals to increase tax incentives from some organizations were not included in the budget, which makes sense in light of the difficult fiscal situation in addition to other reasons.

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Do you require legal advice with respect to Canadian or Ontario non-profits or charities?


Charity Lawyer Mark Blumberg

Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.
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