Our affordable counselling program continues to grow. At this time, approximately 70% of our clients receive fee subsidies from our Compassion Fund. Because counselling is not covered by Alberta Health, we’re asking you to make an investment in our community. Every penny counts and each donation we receive will allow someone to begin their journey toward healing. With your support, life-changing counselling will be accessible for those who otherwise would not be able to afford it. It is only through generous supporters like you that we are able to continue to do our work. Thank you for making mental wellness available to everyone.
Donations are always appreciated by Cornerstone Counselling and are put to good use by Cornerstone’s Compassion Fund which provides subsidized counselling fees for clients in need of support. However, in addition to regular donations, Cornerstone asks that you consider Planned Gifts which provide additional methods of supporting the Compassion Fund and can provide a long-term, or lasting, legacy.
Methods of Planned Giving include the following:
Bequests (in your Will)
Including a gift to charity in your Will is a fantastic way to ensure that your Last Will and Testament is a true “Testament” that reflects the causes that are important to you. Your bequest will continue your support of the charity or charities that have been a key part of your life. You’ll have to decide how much you want to give, when, and to whom. The gift could flow immediately from your estate or could be disbursed over several years from a trust fund set up by your estate.
There are various ways of structuring a charitable bequest:
This happens when your Will’s instructions state that a specific item (e.g. car, cottage, equipment, artwork, etc.) is to be given to the beneficiary you’ve named as the recipient. You could also specify a fixed dollar amount. Specific bequests flow to the designated recipient before the residue of the Estate is distributed.
You could state that a percentage of the “residue” of the estate is to flow to the charity or charities. An example would be where the Will’s instructions indicate the charity is to receive 10% of the residue (residue being whatever is left over after debts, taxes, and any specific gifts have been distributed).
Life Insurance (various methods)
You can name a charity as a beneficiary (primary or alternate) of your Life Insurance policy which means that, upon your passing, the gift may flow directly to the charity without having to become part of the Estate Probate process which can become lengthy and complicated. A tax credit will be issued at the time the funds are received by the charity and that tax credit may significantly reduce or eliminate the taxes owed by you or your estate. Many donors have a charity specified as the alternate beneficiary so that, if the primary beneficiary (e.g. spouse) isn’t there to receive the funds, the funds will flow directly to the charity.
You can also name a charity as the owner and beneficiary of a new or existing policy. Since the gift, once made, is irrevocable, transferring ownership of an existing life insurance policy to charity can result in a tax receipt being issued immediately for the “cash value” you may have already built up in the policy and for further payments you may make. This method is often the preferred choice for those who are likely paying higher taxes now and aren’t anticipating a large tax hit on their estate.
Insurance Gifts flow “outside” of the probate process meaning they don’t even become part of the estate that is governed by the Will’s instructions.
RRSPs or RRIFs
By naming a charity as the beneficiary (primary or alternate) of your RRSP or RRIF, whatever is left in your RRSP or RRIF becomes a gift to charity and any tax owed by the Estate for “cashing in” the RRSP or RRIF is eliminated by the charitable tax credits issued for the gift. Again, these gifts flow outside of the probate process.
If you donate, either now or via your Will, your Appreciated Securities directly to a registered charity (meaning you don’t sell them and then donate the proceeds), any capital gains tax that would be owed if you or your estate cashed the Appreciated Securities would be eliminated AND you or your estate would receive a full tax receipt for the amount given. You’ll save on taxes twice! No capital gains tax will be owed AND you or your estate will also receive a tax credit.
Endowment or Donor-Advised Fund
This involves giving an irrevocable deposit of funds which yields annual income for your chosen charities. You can create this while you are living or via your Will. You can even determine how and when the funds will flow to the charity (interest income only or interest and a portion of the principle) and how the funds should be used by those charities. A tax receipt is issued when the fund is set up. For example, an endowment of $50,000 that earns 2% interest could provide a perpetual annual gift of $1,000 per year or higher if interest rates increase. Or, if you wished to “empty” the fund over 10 years, the annual gift could be approximately $5,500.
Charitable Remainder Trust (“CRT”)
A CRT is the means by which you provide irrevocable instructions (now or via your Will) that create a trust which governs the transfer of a major asset (cash, real estate, or securities) to a charity but allows you and/or your spouse or family to retain the right to use the asset or receive any income generated by the asset during your lifetime. A charitable receipt may be issued immediately for the present value of the gift when the transfer is made since the property then belongs solely to the charity upon your passing.
An example would be where your instructions indicate that upon your passing, your home may continue to be resided in by your children and perhaps their Guardian until the youngest has reached the age of 21 at which time the home is to be transferred to your choice of charity.
One of the many things to consider when planning a gift is how the federal and provincial governments enable and encourage donations to registered charities. Charitable Tax Credits can enhance the impact of your gift. In Alberta, once you or your estate has donated at least $200 to charities in a tax year, further gifts can provide tax credits equal to 50% of the gifts you or your estate provide. It’s referred to by some as the “government matching program”. ½ of what you give to charity is, in essence, funded by the tax credits you or your estate receive in return.
If you’re wondering what your estate’s tax bill may be, it’s as if you sold all your assets a moment before passing. For example, Capital Gains taxes may apply to non-exempt assets when you pass away just as they might if you were to sell those assets today.
For further details regarding the above-mentioned methods of Planned Giving, please contact Ron Knol, Community Engagement Officer, at email@example.com.