The benefits of donating securities today and in the future

Want to maximize the impact of your charitable giving? Investment advisor Josephine Gonzalez explains how donating securities can offer significant tax advantages while helping you support the causes you care about today and through your estate.

Using securities, such as stocks, bonds and mutual funds, to make a charitable donation can be one of the most tax-effective ways to give. Donating securities can also be a strategic component of your estate plan, allowing you to make a meaningful charitable gift while potentially leaving more for your loved ones and the causes you care about.

Tax benefits

The Canadian government encourages charitable giving by providing significant tax incentives for donations.

When securities increase in value, the growth in value is generally subject to capital gains tax when the securities are sold.

However, when you donate eligible appreciated securities directly to a registered charity, you may be able to eliminate the capital gains tax. You can also receive a charitable donation tax credit for the fair market value of the securities at the time of the donation.

These combined tax benefits can make donating appreciated securities a particularly effective way to support a charity.

Give securities now or through your estate

Donating securities can be done during your lifetime or as part of your estate plan after your lifetime. If you are considering donating securities as part of your charitable or estate plans, the following tips may help.

Select your charity

Only donations to registered charities qualify for charitable tax benefits. You can use the Canada Revenue Agency’s online charity search to confirm whether an organization is registered.

Before making your gift, make sure the charity accepts donations of securities and ask about its process for transferring them.

Consider your estate plan

Securities can also be included in your estate plan as a future charitable gift. You may choose to leave securities to a charity through your will or other estate-planning arrangements.

A gift of securities through your estate can be a meaningful way to create a lasting legacy while potentially providing tax benefits to your estate.

Consult with your advisors

A financial advisor, accountant, financial institution or lawyer can help ensure that your charitable gift aligns with your overall financial and estate-planning goals. They can also help you understand the tax implications of your gift and determine which option may be most appropriate for you.

Let the charity know

If you are considering donating securities, either during your lifetime or through your estate plan, it is important to let the charity know about your intentions.

For a gift made during your lifetime, notifying the charity helps ensure the transfer is completed properly. For a future gift through your estate plan, letting the charity know allows the organization to thank you for your generosity and helps ensure that your wishes can be fulfilled.

Make a lasting impact

Whether you donate securities today or include them in your estate plan, your gift can make a meaningful difference.

Donating appreciated securities can provide significant tax advantages while allowing you to support the causes that matter most to you. By selecting a charity, consulting with your professional advisors and communicating your intentions, you can make your gift both effective and meaningful.

For more information about donating securities to VGH & UBC Hospital Foundation, or if you have questions about making a gift during your lifetime or through your estate, please feel to contact me at josephine.gonzales@cibc.com or visit vghfoundation.ca/legacy.

This commentary is intended to provide general information and should not be construed as tax, legal, financial, or other advice. Individual circumstances and current events are critical to sound planning; anyone wishing to act on the information presented should consult with his or her tax, legal or financial advisor. This information, including any opinion, is based on various sources believed to be reliable, but its accuracy cannot be guaranteed and is subject to change. Josephine Gonzalez is an Investment Advisor with CIBC Wood Gundy in Vancouver. The views of Josephine Gonzalez do not necessarily reflect those of CIBC World Markets Inc.