Ways to Give

Making a donation of cash is as simple as writing a cheque or authorizing a charge on your credit card. From your standpoint, it’s no fuss, no bother. Cash gifts to the JCFC will receive a tax receipt for their full value.

A stock portfolio is often among the most valuable assets you own but, as stock prices increase, so do the taxes you owe on the long-term capital gain. With careful planning, you can eliminate federal capital gains tax on the donated security while supporting the causes that you care about. Donating appreciated stock offers more tax benefits than a cash donation.

When you donate publicly traded stock to a qualified charitable organization such as the JCFC, you enjoy two major tax benefits:

• You will be exempt from paying capital gains taxes on any increase in value—taxes you would pay if you had otherwise sold the securities.
• You are entitled to a federal income tax credit based on the current fair market value of the securities, regardless of their original cost.

When you sell publicly listed securities, tax must be paid on the capital gain (the increase in value since you acquired the securities). However, when you donate these same securities to a charitable organization like the JCFC, you save 100% of the capital gains tax.

• In order to derive the tax benefits, you must transfer the securities to the charity, not sell them first.
• Your charitable receipt will be valued based on the closing price on the day when the shares are legally transferred to an account at our brokerage firm.
• You can carry forward the unused tax credit for the donation amount, for up to five years.
• The amount credited to your fund will be based on the gross proceeds realized from the sale of the securities, less selling commission.

For example:

David currently owns stock shares that he purchased for $10,000. He is considering selling the stock, now worth $20,000.

Choices:

• If David sells the stock for $20,000 and makes a cash donation of that amount, he must pay tax on the $10,000 capital gain. Assuming a tax rate of 48%, he will pay $2,400 in capital gains taxes.
• If instead of cash donation, he donates his securities worth $20,000 to the JCFC he will not have to pay tax on the capital gain and will save $2,400.

In both of these scenarios, David will receive a charitable donation receipt for $20,000 resulting in a minimum tax saving of 50% or $10,000 for an Alberta resident (based on 2021).

This tax saving is an income tax credit so the tax savings will be the same no matter what tax bracket the individuals is in.

The donation of flow-through shares is one of the most income tax favorable methods of making a charitable donation. Typically, the net cost to the donor in making a donation of flow-through shares through a structured transaction can be between $0.15 to $0.20 for each $1.00 of donation.

The donation of flow-through shares is not appropriate for all donors. Donors must have sufficient income to fully utilize all of the deductions associated with this type of giving.

Donors are advised to consult with their professional advisors to determine if this type of giving is appropriate in their circumstances.

A bequest is a versatile gift. You can structure a bequest to leave a specified dollar amount, a percentage, or the residue of your estate. You can make your gift either outright to the JCFC, or as a contingent gift used to capitalize an endowment fund in your name to support the causes that matter most to you.

The Foundation will provide an official receipt for income tax purposes for the full value of our gift.

When planning a future gift, it’s sometimes difficult to determine what size donation will make sense. Emergencies happen, and you need to make sure your family is financially taken care of first. Including a bequest of a percentage of your estate ensures that your gift will remain proportionate no matter how your estate’s value fluctuates over time.

If you are planning to leave a bequest to the Jewish Community Foundation of Calgary, your wishes must be clearly set out in your will or trust.

Generally, just a few sentences are needed.

• the first paragraph specifies how the amount of the gift should be determined (are you making a specific bequest, a percentage or designating the residual of your estate).
• the second paragraph indicates how the income is to be expended (for example, the donor may wish to direct the gift to the General Heritage Fund with the annual income distributed at the discretion of the directors of the JCFC, or they may wish to establish a new fund or contribute to an existing named fund).

Here are a few examples of wording that could be useful.

I give and bequeath the sum of (you can insert a dollar amount or a percentage or the words residue of my estate remaining) to the Jewish Community Foundation of Calgary to establish the (insert name) Fund.

It is my wish that this gift be held in perpetuity and that only the annual net income derived from the fund shall be: (you can select one of the following)

• Used for general distribution purposes at the discretion of the directors of the Jewish Community Foundation of Calgary.
• Used solely for support of (insert an area of interest you wish to support).
• Used solely for support of (insert the name of a specific charity or charities by percentage that you wish to support).
• Added to the Endowment Fund already established by (insert the name of the fund or the organization) for the purposes outlined in the agreement established with that organization.
• Used for the purposes as shall be directed annually by (insert the names of your representatives), failing which the income shall be used for general purposes at the discretion of the directors of the Jewish Community Foundation of Calgary (this is called a donor advised fund).

The JCFC is able to assist you and your legal advisors to create a document that will fulfill your philanthropic intentions.

Through the JCFC, you can leave a substantial gift to the community with a relatively small donation. By purchasing a new life insurance policy or transferring an existing policy and naming the JCFC as the irrevocable beneficiary or owner of the insurance policy, you can create a significant legacy at a modest cost.

Life insurance is an important tool in the estate and gift planning process.

Please consult your tax or estate planning professional to determine what is best for you.

Do you have money saved in an employee pension plan, a RRSP, a RRIF or tax-sheltered annuity? Each of these retirement plan assets contains income that has yet to be taxed. If you die with retirement plan assets in your estate, those assets may be subject to taxation (retirement plan assets can be rolled-over tax-free to your spouse, common law partner, a financially dependent child or grandchild).

You can reduce taxes by making a bequest to a charitable organization. A charitable donation tax receipt will be issued for the total amount of the bequest.

You can provide for your loved ones with less heavily taxed assets and use your retirement plan assets to establish a fund at the JCFC that will help to support the causes and organizations that have been meaningful to you and your family. Through this reduction of final income taxes, the after-tax cost of making a gift will be much lower than the value of the gift itself.

A Charitable Remainder Trust (CRT) is a tax-saving alternative for people who want to make a substantial gift to the JCFC. Charitable Remainder Trusts offer you a guaranteed lifetime income along with substantial, immediate tax savings.

A Charitable Remainder Trust is created when a donor irrevocably transfers assets (usually cash or highly appreciated stock) to a trust and then specifies a charity like the JCFC as the recipient of these assets upon his or her death. The trust will pay income earned on these assets to the donor or other designated income beneficiary during his or her lifetime; at the end of the trust, the remaining assets will be used to capitalize your fund at the Jewish Community Foundation of Calgary. Gifts to a CRT can be made in cash, but more often consist of highly appreciated stock.

As the capital of the trust (the amount that was originally contributed) is not accessible, you are entitled to an immediate donation receipt that can be used to reduce taxes.