Planned Giving and Canadian Charities

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. 

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. 

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. 

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. 

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.

Blumbergs’ Canadian Charity Law List - December 2010

Here is a copy of the Blumbergs’ Canadian Charity Law List for December 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?”

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

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.

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.

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.”

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. 

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.”

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.

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.

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. 

CRA comments on gift to charity under will that is poorly drafted

This letter from CRA is a reminder that when leaving funds to a registered charity under a will the drafting is important.

Low Cost Fundraising - Legal Issues with Third Party Events and Bequests -with lawyer Mark Blumberg

Here is a free archived webinar entitled “Low Cost Fundraising - Legal Issues with Third Party Events and Bequests”. https://ocsa.webex.com/ocsa/lsr.php?AT=pb&SP=TC&rID=547307&rKey=d508eba7a71f3dbc&act=pb

Webinar: Haiti - Legal and Ethical Issues for Canadian charities responding to the earthquake

[the archived recording of the webinar Haiti - Legal and Ethical Issues for Canadian charities is now available at https://ocsa.webex.com/ocsa/lsr.php?AT=pb&SP=TC&rID=619547&rKey=680663606ebf9a91&act=pb (It is approx 1h and 10 min)]  We are also beta testing some other webinars at: http://www.globalphilanthropy.ca/index.php/blog/comments/webinars_on_canadian_charity_law_-_charity_law_information_program_clip_by_/

OCIC, myself and Capacity Builders will be organizing a free one hour webinar entitled “Haiti - Legal and Ethical Issues for Canadian charities responding to the earthquake”  As we are all aware with the earthquake in Haiti, Canadians have responded quickly and donated generously.  Canadian charities have received record contributions to help with the disaster in Haiti.  Many of the charities raising funds for Haiti have never operated in Haiti and/or been involved in disaster assistance. We have learned from past disaster responses in post-conflict areas that good intentions and money are not enough.  Join charity lawyer Mark Blumberg (editor of http://www.globalphilanthropy.ca) as he highlights some of the top legal and ethical challenges facing Canadian registered charities operating in Haiti.  From Income Tax Act rules to ethical dilemmas it is important that charities are aware of these and other issues.  For all Capacity Builder Webinars you can see https://ocsa.webex.com/mw0306l/mywebex/default.do?siteurl=ocsa

Maréchaux, F.M.E. v. The Queen (TCC) - leveraged donation scheme nixed by Tax Court of Canada

In Maréchaux, F.M.E. v. The Queen the case revolved around whether F. Max E. Maréchaux, was entitled to a charitable donation tax credit.  Maréchaux is a lawyer at the law firm Miller Thomson LLP. http://www.millerthomson.com/index.cfm?cm=Employee&ce=details&primaryKey=16425  CRA had disallowed the donation claiming it was not a gift.  The appeal which relates to the 2001 taxation year and the tax court dismissed his appeal with costs and ruled for CRA. 

Is transfer of proceeds to Canadian registered charity a gift? CRA discusses one situation

The Philanthropist - excellent legal and philanthropic resource is now free

The Canadian legal and philanthropic publication The Philanthropist is now both online and FREE.  You just need to register and will find some very good articles on different issues affecting charities and non-profits in Canada.  You can reach the website at:  http://www.thephilanthropist.ca/index.php/phil/index  While you are at it you can check out my new article on Mergers and Amalgamations within the Canadian Non-Profit and Charity Sector. 

Nicholas Offord presentation on Fund Raising - Key Challenges & Issues for the Future

Here is a very interesting presentation by Nicholos Offord of the The Offord Group entitled Fund Raising - Key Challenges & Issues for the Future.  It is located at http://www.oltca.com/Library/Events/cts09_mp10.pdf  Although focused on health care fundraising he brings in comes with some interesting statistics that we should of interest to charities especially in these more difficult times.  “The average charity growth rate was 32% between 2001 and 2006”  Across the board having revenue increase by 32% is impressive for charities although one can ask is this sustainable?  Slide 13 cover “Highest Priority Charitable Sector” and for around 9% international was highest priority.

Why a major gift combined with a bequest to a charity may be more tax effective than just a bequest

This short note discusses why a major gift combined with a bequest to a Canadian registered charity may be more tax effective than just a bequest to that same charity.

Interesting Quotes on Philanthropy

Here are some interesting quotes on philanthropy.

Bequests in Wills In Canada - Avoiding Legal and Ethical Problems When Supporting Good Causes

Here is a copy of my powerpoint presentation entitled Bequests in Wills In Canada - Avoiding Legal and Ethical Problems When Supporting Good Causes - Ontario Bar Assocation May 14, 2008.

Planned giving and International Development Charities in Canada