2022
Podcast: 5 Tips for Effective Charitable Giving
Giving back is good for the heart, but are you giving back in a way that’s best for your wallet?
Because generally speaking, Canadians aren’t donating to charities in the most efficient way possible.
According to a study completed by Charities Aid Foundation, Canadians most commonly donated to charity through these mediums respectively.
- Online (with a bank or credit card)
- Donation box
- Cheque
- Cash
It’s no surprise that these four donation avenues were the most popular.
But, none of them are as tax efficient as they could be – and that’s assuming those donors got a tax receipt for their contribution.
Donations are noble no matter what medium you use. However, donating in the most tax-efficient manner possible allows you to make a bigger impact with families in need and more broadly, your community.
On this episode of the Wealth Wisdom Podcast, I’m joined by my fellow co-founding member of Sana Family Office, Josh Dyck (BA, CFP®, Wealth Advisor, Assante Capital Management Ltd.), to help touch on five tips and tricks for effective charitable giving.
You can listen to the podcast through these popular avenues.
You can also watch the video podcast as well.
Here’s a recap of the episode, including all five tips and tricks for effective charitable giving.
1. Plan first, give later
So, here’s a couple of Financial Planners telling you to, well, plan first before you make charitable donations.
Shocker.
However, we’re not just saying this to live up to our job description. Those who have had a proper financial plan completed are often surprised by the amount in which they can give without altering their lifestyle.
Here’s another reason why you need to plan first before incorporating charitable giving into your wealth strategy.
2. Figure out the timing – and frequency – of donations
There are two questions we often hear from clients when it pertains to charitable giving:
1. How often should I give?
Making regular contributions to your charity of choice is a sound launching pad for getting involved with charitable donations. However, lump sum contributions usually allow you to be more strategic with your planned giving.
2. Should I donate while I’m alive or through my estate?
I’ll let Josh answer this one 😊
3. Donate securities directly to charity
Let’s circle back to our point at the top of this post.
Canadians give through a number of avenues. One avenue that needs to be utilized more in the years ahead is donating securities (stock, bonds, mutual funds) to charities directly (also known as donating “in-kind”).
This strategy has a number of advantages. Josh breaks it down for you below.
4. Naming a charity as your RRSP or RRIF beneficiary
Did you know that you have one more kid than you think?
Let me explain in the clip below.
This is a fantastic strategy for making a sizeable contribution to charity while reducing the tax hit on second passing.
Your main question might be “well, I still want my kids to receive an inheritance.” There are strategies we can use for getting an inheritance to you kids, all the while still donating your RSP/RIF proceeds to charity.
If you’re interested in learning more, please get in touch.
5. Charitable giving makes insurance a little sexier
Ah yes, the dreaded “I” word.
When it comes to insurance, there are often two types of people. Those that hate insurance companies and never want to deal with them, and those that “tolerate” them because they realize that insurance can often be a tool used to achieve a desirable goal.
With charitable giving, insurance can help in a couple of different ways.
Going back to our example above, insurance can be the tool used to give your kids the inheritance they otherwise would have received as a beneficiary of your RRSP or RRIF.
Secondly, you can make a huge charitable impact purchase a life insurance policy and have the charity as the owner of that policy.
I talk a bit more about that strategy in the clip below.
Next Guest
Again, please reach out to either Josh or myself if you want to learn more about any of these charitable giving strategies.
Implementing these strategies requires planning (sorry, did it again), and often that planning has to happen far in advance.
On the next episode of the Wealth Wisdom Podcast, I’ll be joined by our Assante Private Client Investment Counsellor Sean Rosas (CFA).
Sean sheds some light on his interesting background, including a work stint in Russia. He also gives a bit of a market outlook heading into 2023.
Until next time,
Assante Sana
John Lawson (CFP®, CIM, FEA), Senior Wealth Advisor
Sana Family Office | Assante Capital Management Ltd.
Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.
Insurance products and services are provided through Assante Estate and Insurance Services Inc.
