Markets Are Looking Up, and Your Charitable Giving Can Too
Instead of spending fun times at our favourite amusement parks over the past few months, many of us have been riding a different kind of a rollercoaster. Along with businesses and charities, investors white-knuckled it through volatile market ups and downs this spring and early summer as the world figured out the impact of the COVID-19 crisis.
Thankfully, markets today have largely recovered, and most stocks and mutual funds have pulled out of the days of deep losses. Some are even higher value than they were before the market drop, making this a great time to donate securities in-kind to your favourite charity.
An Opportunity to Give Generously
Mike* had always responded generously to requests from a variety of charities and non–profits. When he heard about Abundance Canada he thought a Generosity Plan™ might be able to help him simplify the number of charitable receipts he had to deal with each year. He stopped by the Abundance Canada office and asked about how to consolidate his charitable donations.
I sat down with Mike and we discussed his charitable giving habits, priorities, and financial position. It turned out he was a relatively savvy investor and although he had brought a cheque book, I asked him if he was aware of the benefits of donating securities. Mike told me that his accountant had mentioned this option a couple of years earlier, but he was moving at the time and had not followed up.
Advantages of Donating Securities In-Kind
I explained that when you donate appreciated publicly traded securities in-kind, the charity benefits from the full value of the donation and you receive a charitable receipt for the fair market value of the donation. In addition, there is zero taxable capital gain on donated in-kind publicly traded securities. Mike was intrigued and decided to talk it over with his financial advisor.
A short while later, Mike called to inform me that he had significant capital gains in his non-registered investment portfolio, and he wanted to donate securities instead of cash. Because his investments had done well and Abundance Canada provided a donate now, distribute later option, he ended up donating the equivalent of a couple years of his previous charitable donations. He loves that he can still say ‘yes’ to charities seeking his support, and now his giving is much more tax-efficient and easy.
Add Generosity to Your Investment Portfolio
Do you have appreciated securities in your non-registered investment portfolio? This is a great time to consult your financial advisor and ask if you should consider donating securities.
Like Mike, you may discover that you have more to give than you thought.
Contributed by Sherri Grosz
Gift Planning Consultant
*Pseudonym used to protect the privacy of the individual