Considerations for charitable giving

By Tanis Jalbert, LL.B. 19 June 2023 2 min read

People make charitable contributions for all sorts of reasons. Sometimes donors are drawn to give to a particular charity based on a personal experience such as receiving treatment at a hospital or benefitting from a charity themselves. Other times, individuals wish to create a lasting legacy by establishing a bursary or scholarship in their family name. 

And then there are the tax advantages of charitable giving that may be a motivating factor for those selling a business and or wanting to offset a future tax event. Whatever the reason, there are a number of options available that can be tailored to achieve your philanthropic goals. 

The first question when considering charitable giving is whether you want to give today, on death or both. The answer to this question will provide your legal and tax advisors with the initial direction they need to properly advise you.

Once the timing of the donation is determined, the discussion then shifts to the specifics of the  donation. Is it a one-time donation or an ongoing legacy plan? What is the amount of the donation? What is the philanthropic purpose or cause you want to support? Is it a donation to one charity or multiple? 

From an estate planning perspective, there are a few basic ways to donate to a charity. You can leave a gift in your will to a charity. The gift can be a specific item or amount, or a percentage of your net estate (the residue). For those families looking to create an ongoing legacy and involve future generations in the giving plan, options such as a donor advised fund or private foundations are also available. 

So where do you start if charitable giving is of interest to you? Here are a few questions to consider in preparation for a discussion with your lawyer and accountant or tax advisor:

  • Are you looking to donate in your life and/or on death? 
  • Are you planning to make a one-time donation or ongoing donations?
  • How much are you looking to donate?
  • Do you want your family to continue your legacy plan? 
  • Is there a taxable event you are looking to offset?
  • Is there one charity or cause you would like to benefit or multiple?

As with all aspects of financial planning, it is always recommended you seek legal and tax advice based on your unique situation to determine the right giving plan and strategy for you. Answers to these and other questions will help your team of professional advisors form a plan to achieve your wishes. The next step is to talk to your legal and tax advisors. More information on charitable giving options can also be found in ATB Wealth’s Planned Philanthropic Giving Guide.

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