The Right Tool for the Job

The Right Tool for the Job: Using a Generosity Plan™ as a Strategic Tool

Fred and Marcie worked hard to balance family, careers, and a variety of commitments in their community. Life was busy, but they had finally made it to that phase people often call “comfortable”. They used this little bump in financial freedom to increase support for their church, as well as giving to a number of charities at home and farther afield. It felt great to be more generous. However, with that joy came the challenge of tracking increased annual donations and the risk of misplaced receipts. They contacted Abundance Canada to see if we could help.

A Generosity Plan™ for Today

Fred and Marcie created a Generosity Plan with Abundance Canada with the initial goal of simplifying their charitable receipts at tax time. They loved making one annual donation to Abundance Canada and then recommending distributions to their favourite charities throughout the year. Managing their annual giving was so much easier with a Generosity Plan™ that met their needs.

However, as their forties turned into their fifties, they started thinking more seriously about retirement planning. They maximized their contributions to their RRSPs and TFSAs, and started planning for the future life they wanted. That was when it struck them how important supporting the causes they cared about had become. It was certainly not something they’d want to give up when they retired. But how could they maintain their charitable contributions after they were no longer working and their income was likely reduced?

A Strategic Approach to Charitable Giving

I met with Fred and Marcie and explained that they already had the tools they needed to accomplish their goal of a generous retirement. One advantage of a Generosity Plan is that it can change over time to keep step with the various ages and stages of life. They just had to revise their Generosity Plan strategy.

In the same way they were currently building a balance in their RRSPs and TFSAs to be used as income in retirement, Fred and Marcie could grow a balance in their Gifting Fund™ to be distributed to charity after they retired. If they increased their donations to Abundance Canada now, they would receive charitable receipts for their donations right away. These receipts could help offset taxes owing while they were still working. Furthermore, Abundance Canada would invest the undistributed balance in their Gifting Fund™ and the annual earnings would provide additional growth beyond their annual donations. People often have reduced taxable income in retirement and they might not be able to make use of all their donation receipts in later years. The added tax efficiency of contributing to their Gifting Fund during higher income years would likely allow Fred and Marcie to be even more generous to their favorite charities after they had retired.

A Generosity Plan™ for Today and Tomorrow

Fred and Marcie were thrilled at the idea of using their Generosity Plan™ as a strategic tool. They increased their donations to Abundance Canada and structured their Generosity Plan™ to continue annual support for their list of charities while growing their fund to maintain that charity support in retirement.

Today, they are more excited about the future than ever. Life is just as hectic as always, but in the midst of all the busyness, they take comfort in knowing they are well on their way to ensuring they will achieve their charitable goals both now and after they retire.

Harold Penner
Gift Planning Consultant

Contributed by Harold Penner
Gift Planning Consultant

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