Ask anyone charged with running a non-profit arts organization what their biggest challenge is, and you will most likely hear "raising funds" as their first response.
We live in a very generous community here in Prince George and I've seen firsthand how we truly are the volunteer city. We also have countless businesses that generously provide cash and in-kind sponsorships, and a vast number of citizens who regularly open their wallets to help the many important social and community organizations that do good work here.
I think it is safe to say that people generally believe that giving generously to others has multiple paybacks. It makes your community a better place to live, it makes you feel good about yourself, and it symbolizes values that are important to you.
At the end of the day, having a little something extra to give to others really is evidence of a life well-lived.
But when we speak about making charitable donations, I think most people think of activities such as dropping cash in a box, writing a cheque, or possibly entering a credit card number into a crowdfunding site.
But did you know that donating securities, such as shares in a company, has additional benefits?
Here is how it works.
When you sell an investment, the transaction will generally trigger a capital gain, if the investment has increased in value.
In the usual case of capital gains, one half of gains are normally taxable when those gains are realized.
But capital gains resulting from the donation of securities to a registered charity are eliminated under tax law. For donations of publicly traded securities, the inclusion rate of zero also applies to any capital gain realized on the exchange of shares of the capital stock of a corporation for those publicly listed securities donated.
So in essence, it makes a lot more sense to donate securities, rather than selling and then donating cash of an equivalent amount, as capital taxes are mitigated, allowing the receiving charity to benefit from the full potential value of the shares.
It is interesting to see how the goals of estate planning have shifted over the years, especially for the baby boomer generation. Many of their offspring have been able to settle at younger ages into careers, home ownership and entrepreneurial lifestyles, which can present an opportunity for folks to look beyond their own brood, and approach estate planning from a philanthropic perspective.
And by donating securities rather than cash, you could also be doing a local charity a favour, by giving them an opportunity to start exploring investments as a means of financial management and raising funds. Too many small charities live from grant to grant, with limited earning opportunities in between. We see this "bake sale" approach all the time.
For the most part, this can work for the short term, but by introducing a charity to the world of securities and investments, you help build organizational and governance capacity, and introduce a new entry point into potential donor relationships.
If you are interested in learning more about this really effective way of making and receiving donations, there is more information on Canada Revenue Agency's website, and there are a number of reputable investment advisors in town who have built their reputations by offering solid financial advice, all while aiding our community by servicing small business owners and sponsoring non-profit organizations.
The Prince George Community Foundation is also an excellent local organization that does a world of good for our community and they can be of assistance in helping you find a method of donating that works for you.
