Charitable giving guide
Charitable giving is making a gift to a charitable organization in a way that maximizes your tax and estate planning benefits. A gift may be a one-time donation, a series of payments over a set period, or ongoing support. It may be a gift the charity can use now or a “deferred gift ” available to the charity in the future.
You have many choices when it comes to making a charitable gift. To learn about your options, the tax benefits and other considerations, take a moment to review the following frequently asked questions:
A charitable gift is a voluntary transfer of money or property for which you expect and receive nothing of value in return. Gifts can include:
- Gifts in kind such as stocks, bonds or real estate
- A right to a future payment (e.g. life insurance)
- Certified cultural property (significant works of art and artifacts)
- Land that is considered to be ecologically sensitive and important to Canada's environmental heritage
Certain donations are not considered gifts for tax purposes:
- Time or services
- Property of little value, such as worn-out furnishings
- Gifts for which personal benefit is received
With minimal planning, tax savings can fund close to 50% of your gift in some provinces.
There is a 16% federal tax credit on the first $200 donated each year. Amounts over this threshold earn the maximum 29% federal tax credit. Your tax savings are then increased by reduced provincial taxes.
Yes. Generally, each year you can claim credit for donations not exceeding 75% of the “net income” reported on your federal tax return. For donations of ecologically sensitive land and Canadian cultural property, the limitation is 100% of your net income for the year.
The following includes some of the gift options mentioned previously, as well as additional methods appropriate for unique circumstances and large or ongoing gifts:
- Simple cash gifts including a one-time cheque or regular payments deducted from your paycheque
- Gifts in kind such as tangible property (stocks, bonds, mutual funds or real estate)
- Bequests under a Will
- Donation of a Registered Retirement Savings Plan (RRSP) or Retirement Income Fund (RRIF)
- Donation of an existing life insurance policy, typically a whole life policy that has a cash surrender value
- Deferred gift of a life insurance policy
- Charitable gift annuity, which enables you to give a lump sum to a charity in exchange for periodic income
- Charitable remainder trust (This is a living trust that you establish by contributing cash or other property. Throughout your lifetime you receive income from the trust. Upon your death, the "remainder" passes directly to the charity.)
- Endowment fund, which allows you to make a very large donation to help an institution fund scholarships, fellowships and more
- Private charitable foundation (This is a non-profit organization that can be established by an individual, family or small group to award grants or make contributions to registered charities. It offers the most flexibility in charitable giving, but can require a significant amount of time and money.)
Most charitable gifts that qualify for tax credits are one-way transactions. You cannot take back the donation. Before making a large commitment, make sure you will have enough money to meet your future needs and those of your family.
Yes. RBC Dominion Securities offers a Charitable Gift Program for those who want to support charitable causes in a meaningful way, but don't have time to establish a private foundation or endowment fund. It is an easy, convenient way to support charitable causes, today and in the future, while receiving important tax benefits.