Gift Acceptance Policy

5. Accepted Gifts: Gift-In-Kind

Publicly Listed Securities

Publicly listed securities are securities that are listed on prescribed stock exchanges that are recognized by the CRA and cannot come from a registered investment account (RRSP, RIF, TFSA, etc.). Gift-in-Kind donations of publicly listed securities may be received via:

• Transfer of securities from the donor’s brokerage account to the Foundation’s brokerage accounts,
• Deposit of physical stock or bond certificates made out in the name of the donor to the Foundation’s brokerage accounts. Additional documentation may be required by the Foundation’s custodian.

Unless agreed to by the CEO or their designate, in advance and in writing, all gifts of securities will be sold as soon as practical upon receipt. An example of a possible reason to hold is the timing of an upcoming event that will positively affect the share price (e.g. corporate buyout).

For proprietary gifts of in-kind of securities, Abundance Canada is authorized to open any accounts as necessary to affect the transfer of the security. Note: no margin or lending accounts are permitted.

Receipting Publicly Listed Securities

Abundance will use the following criteria to value the publicly listed securities for donation receipt purposes:

• Stock certificates will receive an official donation receipt (tax receipt) at the value assigned to them by the Foundation’s custodian.
• The value of the gift is the gross number of securities deposited into Abundance Canada’s brokerage account as per the custodian’s pricing policy.

Private Company Preferred Shares

The Foundation can accept gifts of privately owned preferred shares, however, acceptance of these gifts is evaluated on a case-by-case basis by the Chief Assurance Officer (CAO) and the Chief Financial Officer (CFO), or the Chief Executive Officer (CEO).

The process is as follows:

• Donor is required to provide written intention to make the transfer of a certain number of preferred shares. The intention letter needs to include: name and address of the donor, name of the shares (e.g. Class C Preferred Shares), share numbers, value of the shares, a declaration that the Income Tax Act Sections 248 (35)-(37) do not apply, under and description of the shares (e.g. Class C Preferred Shares). The letter must be signed and dated.
• The company needs to provide a written Board authorization to transfer the shares to the Foundation (the “Resolution”). The Resolution must include: the name of the shares, certificate numbers, state that the share is a preferred share, the value of the shares, and the number of shares. The Resolution must be properly executed which includes signature and date.
• The company provides a written Resolution stating that the shares will be immediately redeemed for $X. This Resolution may be combined with the previous one.
• Cash Proceeds must be received immediately for the shares (e.g. within two weeks of the transfer).

The Foundation will sign the required legal transfer documents supplied by the donor that affect the transfer in kind and subsequent redemption of the shares.

Private Company Operating (Common) Shares

The process for gifting common shares is identical to the preferred share process with the following exception:

A current written independent valuation of the shares (e.g. CBV) is required. Current means within one (1) month of the gift OR such other time as determined by the CBV. The CBV will be engaged by the CFO and CEO.

Receipting Private Company Preferred and Common Shares

A tax receipt will be issued to the donor for the cash proceeds received into the Foundation’s bank account for the redemption of the shares.

Life Insurance

If a donor donates a new or existing life insurance policy to the Foundation, the Foundation becomes the owner and beneficiary of the policy. Prior to accepting a donation of life insurance, the Chief Assurance Officer, and the Chief Financial Officer will review the policy using the procedure below to determine if it is suitable to gift to Abundance Canada.

Note: Abundance Canada will not accept the transfer of an existing, or purchase a new, policy where it is not prepared to pay the premiums with or without the donor’s contributions. In other words, should the donor stop payments, OR the policy requires additional premiums, and the donor is not prepared to pay them, the policy may be considered abandoned – see Abandoned Policy section below.

There are three (3) ways to use life insurance as a gift to the Foundation:

1. Transfer ownership of an existing policy to the Foundation. The Foundation names itself beneficiary.
2. Assign the Foundation as a beneficiary of the donor’s policy.
3. Purchase a new policy with the Foundation as owner and beneficiary.

The following procedures apply to life insurance gifts.

1. The Foundation is assigned as the owner and beneficiary of a life insurance policy.
   The steps (in order) for this to be accepted are:
   1. Donor and or the donor’s advisor approach an Abundance Canada staff member to make a gift of an existing policy,
   2. Abundance Canada staff member notifies the Chief Finance Officer (CFO) and the Chief Assurance Officer (CAO) and provides the following documentation:
      1. the donor and advisor names,
      2. the latest statement for the policy,
      3. if current (within 30 days), an actuary’s assessment of the policy.
   3. CFO or CAO will request from the advisor sample policy wording.
   4. CFO or CAO will ask the advisor for any other documentation required to transfer the policy.
   5. If accepted, CFO will seek the necessary signatures to complete the transfer.
2. The Foundation is assigned as a beneficiary of the donor-owned policy.
   The gift occurs upon the death of the insured. A tax receipt may be issued for cash received into the Foundation’s bank account – see Cash above. No other tax receipts may be issued. It is critical that the Foundation staff have properly documented the situation and accurately described what will occur when proceeds are received.
   Steps (in order) for this to occur:
   1. Donor notifies the Foundation’s staff member of their intention.
   2. The Foundation staff member secures evidence (i.e., an official statement) from the donor that Abundance Canada Inc. has been named as beneficiary.
   3. The Foundation staff member ensures that the Head Office file is properly documented, and the financial system is updated to avoid issuing receipts incorrectly. Refer to procedure.
3. Issuing a new policy in the name of Abundance Canada.
   Steps (in order):
   1. The Foundation staff member notifies CFO and the CAO of the donor’s intent.
   2. Abundance staff member provides CFO and CAO the names of the donor and advisor.
   3. CFO or CAO discusses the idea with the advisor and assesses the policy to be issued.
   4. If accepted, CFO works with the advisor and the donor to execute the documents.

Characteristics of a suitable policy to be gifted or purchased by Abundance Canada:

The ideal policy to be purchased by or transferred to the Foundation will have the following features:

1. Level cost of insurance,
2. A maximum of 20 premiums owing,
3. Guaranteed level premiums,
4. If investment growth is required to pay premiums, projected growth rates that are conservative and attainable (e.g. 3-5%).
5. A return on investment of at least 6% at age 100, and
6. For any policies where dividends and or internal investments within the policy are paying the required premiums (e.g. premium holiday), an In-Force illustration is required from the advisor that shows for the current situation, any required premium payments, projected growth rate, cash value, and death benefit at age 100 or life, whichever is longer, AND sensitivity analysis that illustrate drops in growth rates of 1 and 2% respectively.

Abandoned life insurance policy that has been transferred to Abundance Canada:

If the donor is unwilling or unable to make a premium payment, the CEO may consider the policy to be abandoned, and the donor is notified in writing.

Declaring a policy abandoned causes the following to occur:

• All donor distribution recommendations are ignored, and
• Any proceeds received from the policy are to be used to support the work at Abundance at the discretion of the Abundance’s Board of Directors.

Abundance Canada will continue paying the premiums using the Abundance Fund.

Receipting Life Insurance Gifts

An official donation receipt (tax receipt) is issued for the gift of insurance at the following times:

• On the date that the ownership of an existing policy is transferred (assigned) to the Foundation. The value of the policy (tax receipt) is determined by an independent actuary engaged by a member of the Leadership team, or
• For premiums that are paid by donations from the donor for an Abundance Canada owned policy, or
• For the value of cash proceeds received when the Foundation is a beneficiary of the policy.

Care as to the ownership of the policy is critical to avoid issuing an incorrect tax receipt.