Planned Giving and Canadian Charities
August 27, 2019
STEP Canada had a CRA Roundtable on June 6-7, 2019 and they discussed a number of topics. One issue of interest to charities and philanthropists is Question 2 dealing with alter ego trusts and donations. Essentially CRA takes the position that if an alter ego trust is required to distribute its funds to a charity then such funds are not a charitable donation and not entitled to an official donation receipt. If on the other hand the trustees have discretion and there is donative intent then it could be a charitable contribution.
June 28, 2019
We have created two new online courses for those outside of Toronto who are not able to easily attend our programs. They might also be helpful to those in Toronto who cannot wait for our next session as they sometimes only occur annually. Online course are never going to be the same as in-person courses but for many they are far easier to access and more convenient. You can do an online course at your pace and redo sections if you wish.
The first course is "Should We Establish a Canadian Social Enterprise, Non-Profit or Charity and How to Do It?". The course is $149 and you can register at https://charity-law.teachable.com/
The second course is "Receipting for Canadian Registered Charities". The course is $225 and you can register at https://charity-law.teachable.com/
April 22, 2019
I will be speaking at the CFA Society of Toronto 2019 Wealth Conference on May 1, 2019 dealing with the topic "Professional Advisors and Philanthropy: Helping clients and yourself navigate philanthropy". You can register for the program here.
February 27, 2019
An interesting little case in BC called Bodner Estate. Irene Bodna died and left about 8m to 24 different registered charities and non-profits that are all interested in animal welfare and the environment. A small amount was as an outright gift and the rest was a perpetual fund paying out the net income.
July 17, 2018
Here is a letter from CRA discussing when an official donation receipt can be issued for a gift from an estate and how the 2016 changes affect this. Here is the text of the letter:
July 17, 2018
There are certain rules in the Income Tax Act that only apply to private foundations and not charitable organizations and public foundations. These rules are called the 'excess business holdings' regime or 'excess corporate holdings' regime. They limit the amount of shares or interests a Canadian private foundation can have, or that the private foundation plus other relevant persons may have. CRA in a recent letter discusses whether the excess business holdings rules apply when the private foundation will receive the shares as a residue of an alter ego trust.
June 24, 2018
The Institute of Legacy Management has published voluntary ethical guidelines for charities' legacy professionals, covering issues that can arise when charities receive or solicit a legacy or bequest, including: doubts about the source of the donor's income or the donor's character; the risks of unwelcome media interest; and communicating with hostile lay executors or families. You can find the guidance here. The Charity Times has also written about the guidance, which you can find here. Although it is a UK guidance it is helpful for Canadian charities.
May 11, 2018
Here is a recent archived presentation Philanthropy and First Nations with Richard Bridge which explains the importance of philanthropy with Indigenous groups and how Bands and other organizations can become qualified donees and take advantage of philanthropic interest.
May 02, 2018
The Department of Finance has released the 2018 Report on Federal Tax Expenditures. The document is over 300 pages and discusses the financial costs of certain Canadian tax measures including donation tax incentives. These costs are referred to as "tax expenditures". On page 287 there is an extensive discussion of the tax assistance for publicly listed securities or marketable securities under the heading "Evaluation of the Non-Taxation of Capital Gains on Donations of Publicly Listed Securities". Anyone interested in the topic of donating appreciable marketable security to charities will find the discussion interesting.
January 27, 2018
P113 - Gifts and Income Tax 2017 is the main CRA publication dealing with gifts and their income tax consequences for Canadian taxpayers. The publication has been revised with some minor changes in 2017. They reflect that the rules for donations from an estate are no longer proposed but are final. There were also some some changes to the Ecological gifts programs.
November 30, 2017
The US House and Senate are looking at major changes to the tax code that could have a significant impact on US donors and whether they receive any tax incentives for their donations. Now, 1 in 3 US donors may get a tax incentive when they donate to charity; with the proposed changes, only 1 in 20 US donors will receive a tax incentive for their donations. A number of US charity umbrella groups have been lobbying hard to prevent certain changes. We will know shortly whether the charity sector will be blindsided or if last minute amendments will occur. There are lots of lessons here for Canada.
October 28, 2017
Many Canadian charities conduct gala dinners although it seems fewer than in the past. We recently spoke to CRA regarding the amounts that should be deducted for gala dinners as an advantage when issuing receipts. CRA said that any costs to set up the event, eg. venue, flowers, decorations, etc. are considered to be fundraising costs and should be reflected as such on the T3010 but in terms of the amounts that need to be deducted from an official donation receipt, it would be the value of the meal, drinks, advantage etc. received by the donor – not necessarily the costs.
Essentially what would a donor would pay to have a dining experience at a similar venue. In terms of “nicer” venues, they said that while the venue cost isn’t necessarily deducted as an advantage, it is generally factored into the value received by the donor since dinner at a similar “nicer” venue will likely be higher, thus a higher advantage received.
September 15, 2017
CRA recently released a letter that discusses whether a transfer of property by a corporation to its shareholder that is a private foundation is a gift for purposes of section 38(a.1) of the Income Tax Act (Canada) such that the taxable capital gain from the transfer would be zero.
September 01, 2017
The Canada Revenue Agency recently released its views on when the adjusted cost base of a life insurance policy may be used to determine the cost of a life insurance policy when a life insurance policy is gifted to a qualified donee.
April 27, 2017
We have provided two letters recently released by the Canada Revenue Agency.
April 02, 2017
Canada has a mechanism to recognize certain foreign universities for purposes of donations. It is probably the most generous tax incentive system of any country in the world. Essentially if you are a degree granting university outside of Canada and you have 2 Canadian students generally studying at your university/college then you can apply to get on a list maintained by the Canada Revenue Agency. Once you are on the list you are considered to be a "qualified donee". That means you can issue Canadian official donation receipts under the Income Tax Act (Canada). WIth such status a Canadian who donates to your prescibed foreign university obtains the same benefits - of between 40 - 70% as if they had donated to a Canadian university.
January 16, 2017
Kate Robertson and Mark Blumberg recently prepared an article, "Some thoughts on Professional Athletes and Philanthropy in Canada: Part 1" which provides helpful information and guidance for professional athletes and their trusted advisors who are exploring philanthropic options in Canada. Part 2 of this article series will provide suggestions and tips for professional athletes on operating a successful Canadian registered charity.
November 03, 2016
CRA recently released its first video as part of a new educational video series on 'Gifting and Receipting'. This series is meant to educate the public, donors, and those involved in the charitable sector on the type of donations that are tax-receiptable and the different CRA rules regarding receipting.
June 29, 2016
As a result of the 2016 Quebec Budget, Canadian registered charities are no longer required to complete a separate charitable registration in Quebec in order to be able to issue tax receipts to donors in Quebec.
March 23, 2016
The CAGP will be offering an Advanced Canadian Gift Planning Course in Toronto from June 1-3, 2016.
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
Blumberg Segal LLP
Barristers & Solicitors
#1202 - 390 Bay Street
M5H 2Y2 Canada
Charity Law List
Join Blumbergs' non-profit and charities newsletter
View recent issue: September 2019