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The Joys of Giving
Most Canadians have made donations to one or more registered charities or non-profit groups. About 25% of Canadian taxpayers give to charities in any year, but more than 80% have given within the last five years. Annual donations top $4.8 billion. While most give modest amounts - the average is $200-300 - older Canadians are more likely to give large amounts. It is not only the wealthy who give, but also middle-class and lower-income Canadians who recognize the pressing need of dedicated groups in their local communities and across the country.

Your charitable giving should be part of your financial planning. This is true of both your annual giving and any part of your estate that you plan to leave to charity. By consulting a financial advisor about your giving, you can maximize tax effectiveness and give in a way that does the most good to the charities you support.

Planning your giving
The most common method of giving to charities is through making a donation to fundraising campaigns. The charity receives immediate funds to continue its work and the people making the donations receive a tax credit for their donation.

However, by planning your donations in a more systematic and long-term way, you can make your money go further and provide the charity with a solid base of funding. Many people also wish to set up plans that keep on giving after they've died so that the charity of their choice can continue to help others long into the future.

Giving during your lifetime
There are numerous methods you can use in a planned giving program. To give during your lifetime, you can:

• Set aside an annual amount you devote to charity. This can be given by monthly instalments or through a lump sum.
  
• Give part of your stock or bond portfolio - You do not pay capital gains on the investment you donate but and you receive a charitable receipt for the full market value.
  
• A prescribed annuity can provide funds for annual gifts to a charity during your lifetime and the charity can receive any balance on your death through your estate.
  
• You can make designated interest payments to a charity from a specific amount of capital. This provides annual gifts, but allows you to retain control of the capital for emergencies.

Giving after your death
Or you can plan for your favourite charities in your will by:

• Leaving a simple bequest. This does not tie up your capital during your lifetime and you can change your decision any time prior to death.
  
• Leaving the charity a life insurance policy. Such a policy is easy to set up and administer, and premium payments provide tax credits to you during your lifetime.
  
• Leaving land or property to charity. This should be undertaken with the aid of a tax and financial planner to ensure the property is used in a way acceptable to you.
  
• Creating a trust fund that continues to give after your death.

Tax-effective giving
Whatever form of giving you choose, get advice about tax effectiveness. Ottawa has reduced capital gains on stocks given to charity. Techniques such as giving an annuity or life insurance policy during your lifetime require the advice of a qualified life insurance advisor. Don't overlook claiming your charitable tax receipts when completing your annual return.

For most people, there is personal joy in the act of giving. Your life insurance or financial advisor can help you make your dollars go further. As well, your help to the registered charity of your choice can be more effective by taking a planned approach to charitable giving.

“What wise men do in the beginning, fools do in the end.”

Raymond E. Jackson Retired

Simon J. Jackson, CFP, CPCA Senior Financial Advisor, Manulife Securities Incorporated Life Insurance Advisor, Manulife Securities Insurance Inc.