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Tax-Smart Gifts
Of course, a gift of cash or a cheque is always appropriate and appreciated, but you may wish to consider other, more specialized, and often tax-smart ways to donate. If you are planning a substantial charitable gift, we recommend that you seek professional advice from your accountant, investment advisor, or lawyer to discuss options designed to satisfy your objectives, family needs, and financial circumstances. A representative of the Foundation would be pleased to meet with you (and, if you wish, your advisors) to see that your gift fits your charitable giving goals. To discuss these options, please contact Carol Biely, Foundation chair.
Gifts of Securities
Because of federal legislative changes in 2006, gifts of publicly traded securities that have grown in value are an even more tax-effective way to give to charity than ever before. When you transfer securities to the Foundation (and because of the process involved, we suggest a minimum value of $1,000), you will be issued a charitable tax receipt for the full market value of your gift, and you will not be required to pay any capital gains tax on the transferred securities. Please contact Terry Bolton, the Foundation’s Treasurer, to obtain further information and a securities transfer agreement form.
Charitable Bequests in Your Will
Many people also choose to leave a legacy to the community through a bequest to the Foundation in their will. By making a bequest to the Foundation, you can retain the use and enjoyment of your assets during your lifetime and at the same time make a significant contribution to the community in the future. Your bequest will be honoured as an Estate Fund in our annual stewardship report, which is sent to all the Foundation’s donors and friends, published in the local newspaper, and posted on our website.
A specific amount of money, specific securities, the residue of your estate (which is the amount remaining after any debts, expenses, outright bequests, and taxes are paid), or a percentage of the residue of your estate may be donated through a bequest. The proceeds of life insurance or RRSPs and RRIFs may also be donated, although these are generally designated outside of your will to avoid going through probate.
To make a bequest to the Foundation in an existing will, you can simply ask your lawyer to add a “codicil” (a separate document that becomes part of your will) — a relatively easy and inexpensive way to plan your future gift. (See the section below on “Suggested Wording for Your Will.”) Your lawyer will need to know that the Foundation’s legal name is the Salt Spring Island Foundation and the address is Box 244, Ganges PO, Salt Spring Island, BC V8K 2V9.
For bequests of $10,000 or more, there are designation opportunities that you may wish to explore with the Foundation. Depending upon the value of your bequest, you can designate that the annual income from your donation be directed to a specific field of interest or to specific charities. To discuss these options, please contact Carol Biely, the Foundation's chair.
If you have made a bequest to the Salt Spring Island Foundation in your will, you may wish to let Carol Biely , the Foundation’s Chair know of your intentions so that we can keep you informed about our work over the years.
Suggested Wording for Your Will
While the wording in your will may be very simple, the benefits to the Foundation — and thus the community — will be immense.
Suggested wording for an unrestricted bequest: I give the sum of ________ dollars to the Salt Spring Island Foundation to be used for any purposes the Salt Spring Island Foundation sees fit.
Suggested wording for an unrestricted bequest of the residue of your estate: I give the residue of my estate* [OR __% of the residue] to the Salt Spring Island Foundation to be used for its general purposes as the Salt Spring Island Foundation sees fit.
Suggested wording for a restricted-use bequest: I give the sum of _______ dollars to the Salt Spring Island Foundation to be used for________________ [please contact Carol Biely to discuss your proposed field of interest]. If unforeseen circumstances make the specified use of this gift no longer practical or desirable as determined by the board of trustees of the Salt Spring Island Foundation, the board of trustees of the Salt Spring Island Foundation may change the terms of the specified use, such change to be as far as possible in keeping with the general intent of this gift.
Suggested wording for a restricted-use bequest of the residue of your estate: I give the residue of my estate* [OR __% of the residue] to the Salt Spring Island Foundation to be used for _____________ [please contact Carol Biely to discuss your proposed field of interest or designation]. If unforeseen circumstances make the specified use of this gift no longer practical or desirable, as determined by the board of trustees of the Salt Spring Island Foundation, the board of trustees of the Salt Spring Island Foundation may change the terms of the specified use, such change to be as far as possible in keeping with the general intent of this gift.
* The “residue” of an estate is the amount remaining after any debts, expenses, outright bequests, and taxes are paid. A gift of the residue can be expressed in your will as the total amount of the residue, or as a percentage of the residue.
Charitable Gifts of Life Insurance
When you give a gift of life insurance, you can turn a relatively small gift today into a much larger gift in the future. There are three options: (1) You may be able to pay a modest amount each month for an insurance policy, making the Foundation the owner and beneficiary. This would give you the benefit of a tax receipt, and at the same time create a future gift of great value. (2) You may have a paid-up insurance policy to donate, which would provide you with a charitable tax receipt for the cash-surrender value of the policy. This would provide the Foundation with a sizeable gift in the future without reducing your present income or cash flow. Or (3) you may choose to name the Foundation as the beneficiary of a policy, creating a future tax receipt for your estate. Contact Carol Biely, the Foundation’s chair, for further information.
Gifts of Funds from Your RRSP or RRIF
It is possible to simply designate the Salt Spring Island Foundation on the beneficiary selection form of your RRSP or RRIF, or you can make a bequest of your RRSP or RRIF in your will. Your estate will receive a charitable tax credit that will significantly reduce the taxes owed by your estate. Contact Carol Biely, the Foundation’s Chair, for further information.
Wealth-Replacement Insurance
You might wish to discuss wealth-replacement insurance with your financial and insurance advisor, as this kind of gift could have considerable current and estate-tax benefit. With wealth-replacement insurance, the donor gives an amount to the Foundation now and receives a charitable receipt that can help reduce current taxes. Part of the tax savings can then be used to purchase a life insurance policy, the proceeds of which will provide for your family members tax-free when you die.
Charitable Trusts
You might want to set up a trust that would provide you or your loved ones with a lifetime income, but with the trust eventually benefitting the Foundation. (A trust is created when assets are transferred to a trustee to hold for the benefit of another. This is done to control the future distribution of wealth, to protect assets, and for tax- and estate-planning.) A “charitable remainder trust” enables the recipient — usually either a donor or a member of the family — to receive lifetime income from the trust, with the charity becoming the capital beneficiary when the trust recipient dies. You might wish to explore the suitability of trusts with your financial and legal advisors.
Frequently Asked Questions
Gifts of Securities
| Q. |
Can I make a donation of securities of any value? |
| A. |
Because of the process involved, we suggest that gifts of securities be contemplated only for donations of $1,000 or more. |
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| Q. |
Would it cost me anything to make a gift of securities? |
| A. |
In most cases no, but check with your investment advisor or brokerage company to be sure. |
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| Q. |
Can I get the same tax advantage if I simply sell the securities and donate the proceeds? |
| A. |
No, if you sell the securities, the proceeds will be subject to capital gains tax. However, if you transfer the securities to the Foundation, rather than selling them, you will not be required to pay any capital gains tax. |
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| Q. |
How will the Foundation determine the amount of my charitable donations tax receipt for securities I have donated? |
| A. |
You will receive a charitable tax receipt for the full market value of your securities on the date the transfer is received into the Foundation's brokerage account. The tax receipt can then be used to create a tax credit for you and reduce taxes payable from other income. |
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| Q. |
Can I designate my securities donation to a particular field of interest or a particular charity? |
| A. |
Yes. For donations of $10,000 or more, there are designation opportunities that you may wish to explore with the Foundation. Depending on the level of your cumulative donations, you can designate that the annual income from your donation(s) be directed to a specific field of interest or to specific charities. To discuss these options, please contact Carol Biely, the Foundation’s chair. |
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| Q. |
How do I arrange to transfer securities to the Foundation? |
| A. |
Please contact Carol Biely, the Foundation’s chair to obtain further information and to request a “securities transfer form.” Send one copy to your broker to initiate the transfer, return one copy to the Foundation so that we can notify our broker of the pending transaction, and keep one copy for your own files. |
Charitable Bequests in Your Will
| Q. |
I already have a will. Is there any way I can include a charitable gift for the Foundation without having to draw up an entirely new will? |
| A. |
Yes, your lawyer can simply and inexpensively add a codicil to your existing will. (A codicil is a separate document that is attached to and becomes part of your will.) Take a look at the section on “Wording for Your Will” for wording suggestions, but be aware that it is always wise to involve your lawyer in any changes to your will, however small. |
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| Q. |
If I leave a bequest to the Foundation in my will, can I designate the revenue from my donation to a particular field of interest? |
| A. |
Yes. For bequests of $10,000 or more, there are designation opportunities that you may wish to explore with the Foundation. Depending on the amount of your bequest, you can designate that the annual income from your bequest be directed to a specific field of interest or to specific charities. To discuss these options, please contact Carol Biely, the Foundation’s chair. |
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| Q. |
How do I make a gift to the Foundation in my will? |
| A. |
As you know, a will is a legally binding document that tells your chosen executor(s) exactly how to distribute your assets. Wills are a necessity for everyone, and must be properly prepared according to provincial law, signed, and witnessed. If you already have a will and now wish to include a bequest to the Foundation, it can be revised either by having your lawyer draft a new will or by preparing a “codicil” (a separate document that becomes part of your will). In either case, your lawyer will need to know that the Foundation’s legal name is the Salt Spring Island Foundation and the address is Box 244, Ganges PO, Salt Spring Island, BC V8K 2V9 |
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Charitable Gifts of Life Insurance
| Q. |
How can I make a gift of life insurance? |
| A. |
You have three options: (1) you could transfer the ownership of a fully or partly paid-up life insurance policy to the Salt Spring Island Foundation, (2) you could purchase a new life insurance policy naming the Foundation as the beneficiary, or (3) you could name the Foundation as the beneficiary of an existing life insurance policy. You may wish to discuss one of these options with your advisors and with Carol Biely , the Foundation’s chair. |
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