Gift of Securities
- 1. You Will Benefit by Donating Your Publicly-traded Securities – Not Cash
You may not have the available cash, but you can still make a difference and benefit tax-wise by the gifting of “publicly-traded securities”. This is more tax-effective than selling the securities and donating the cash proceeds. If, for example, you sell units of a mutual fund and donate the proceeds to 1Up, you will have an income inclusion of the taxable capital gain, which is equal to 50% of the capital gain realized upon the disposition of the units. Get the form HERE.
However, if you donate publicly-traded securities “in kind” to a 1Up the inclusion rate on the capital gain is 0% instead of 50%. Your charitable donation receipt is for the same amount as if you had donated the cash proceeds from the sale of the mutual funds, yet the tax owing on the capital gain is eliminated by donating the securities “in kind”.
Example: You want to make a $100,000 donation to 1Up’s Mom’s and Mentor Program.
You have a mutual fund investment valued at $100,000 that you donate.
The adjusted cost base for this investment is $40,000.
The unrealized capital gain on the investment is $60,000.
Income inclusion if you cash in the mutual fund and donate the proceeds: taxable capital gain is 50% x $60,000 = $30,000
Income inclusion if an “in-kind” donation of mutual funds is made through a transfer of ownership to 1UP: 0% x $60,000 = $0
In either situation, you will receive a charitable donation receipt for $100,000, which is the fair market value of the gift.
Gift in Your Will
- Have your made a plan in your will to benefit 1Up Single Parent Resource Centre? Join the CIRCLE OF HOPE by telling us about your plans. By showing your intention to benefit the work of 1Up we are able to ensure that we can help you leave the legacy that you would like, without any unforeseen snags. And, most importantly, we can capture your story and show you our appreciation.
Please contact Executive Director, Marianne Sorenson at (250) 385-1114 ext 224 or Marianne@1-up.ca for more information
If you are considering leaving a portion of your will to 1Up or making a current annuity agreement, the following is some sample wording that you may take to your financial advisor and lawyer.
Sample Bequest Wording
It is recommended to word a bequest so that the Board of Directors can take care of the priorities of the day.
A. To bequest a sum of money, please insert into your will: ”I give to the Victoria Single Parent Resource Centre Society the sum of (amount)…”
B. To bequest a particular property(ies) such as real estate, stocks, bonds, jewellery, works of art, or other items, insert into your will: ”I give to the Victoria Single Parent Resource Centre Society (description of property)…”
(Note: unless the property is useful to Single Parent Resource Centre, it will be sold, and the proceeds, less any appraisals and selling costs, applied per the terms of the bequest.)
Purposes of Bequests
Whatever the form of the bequest, it may be designated for unrestricted uses, for a restricted use, or to establish an endowment. Below are “purpose” clauses that can be added to any of the examples of bequest language listed above under the forms of bequest.
A. Unrestricted use: “…to be used for the general purposes of Victoria Single Parent Resource Centre Society.” [May also add, “… at the discretion of the Board of Directors.”]
B. Restricted use: “…to be used for (detailed description of what you want the bequest to accomplish).”
Donors are encouraged to communicate with the Executive Director to ensure that the restricted use is considered a request that can be honoured. Examples:
“…to be used in support of the Practical Support Fund”
“…to be used for support of ongoing operations.”
“…to be used for support of parent education.”
C. Establish an endowment with a minimum of $10,000
“This gift may be merged with any of the investment assets of the Victoria Single Parent Resource Centre Society, but it shall be entered in the Charity’s books and records as the JOHN AND MARY JONES ENDOWED… (Counselling Fund, etc.). The income from the endowment shall be used to… (support the health and well-being of parents through counselling services and emergency support…).”
Note: Before providing specific language for an endowment the donor(s) and their agents should check with appropriate officials of the Single Parent Resource Centre to make sure that the proposed endowment is consistent with the mission of Single Parent Resource Centre and that the amount of the bequest would be sufficient for the endowment.
Power to Vary Provision
It is recommended that the following paragraph be added if the bequest is either for a restricted use or to establish an endowment:
“If, in the opinion of the Board of Directors of the Victoria Single Parent Resource Centre Society, it should become impossible, inadvisable, or impractical to use this gift for the specified purpose(s), then the Board may in their discretion use the gift to the best advantage of the Charity, keeping in mind the original wishes of the donor. In any such alternative application, the support provided by this bequest shall be clearly identified with the name of MARY JONES.”
To join the CIRCLE OF HOPE, or to discuss your wishes to make a difference, contact Executive Director, Marianne Sorenson at (250) 385-1114 ext 224 or Marianne@1-up.ca
Thank you for your kind and generous support.