Charitable Giving€¦ · Charitable GivingYOUR GUIDE TO & ESTATE PLANNING Charitable GivingYOUR GUIDE TO For 88 years, Baycrest has been giving the best possible care to seniors

Charitable GivingYOUR GUIDE TO

& ESTATE PLANNINGCharitable Giving

YOUR GUIDE TO

& ESTATE PLANNING

A Directory ofProfessional Advisors andCharitable Organizations

A Directory ofProfessional Advisors andCharitable Organizations

PLUS:PLUS:

LEAVE A LEGACY™ GTA gratefully acknowledges the support for our program from:

Aligning Personal Valueswith Giving ObjectivesAligning Personal Valueswith Giving Objectives

Building a Legacy withEndowed GiftsBuilding a Legacy withEndowed Gifts

The RichLife:Live Well, Give Back,Leave A Legacy

The RichLife:Live Well, Give Back,Leave A Legacy

Donor Advised Funds Easy, Quick, Smart!Donor Advised Funds Easy, Quick, Smart!

2 YOUR GUIDE TO CHARITABLE GIVING & ESTATE PLANNING

I am pleased to have theopportunity to edit this maga-zine for a second year. Lastyear's edition highlighted theelimination of capital gains taxfor gifts of appreciated securi-ties made to public charities.The policy change was a tri-umph for the charitable sectorand for donors who are nowable to manage their giving in amore strategic and tax efficientmanner. This year, the govern-ment extended this policy to private foundations. Manybelieve that it will lead to anew record value of gifts ofsecurities as more and moreCanadians and their advisorstake advantage of the new taxtreatment.

As a development profes-sional, I continue to beinspired by the extraordinarygenerosity of people from allwalks of life. Some make giftsof stock, others donate cashand still others arrangebequests and other plannedgifts. Still others give theirtime to organize fundraisingevents. Interestingly, experi-

ence has shown me that taxconsiderations are rarely theimpetus for an individual’s giv-ing. Donors are inspired to givefor many different reasons; tohonour a loved one by sup-porting research into a particu-lar disease that may havetouched a friend or familymember or through a heartfeltcommitment to their commu-nity. While many charities ben-efit from large gifts made byindividuals or corporations,everyone in the communityhas a role to play and can makea difference.

I hope that this year’s guidewill not only provide helpfulinformation regarding the manyways to structure your philan-thropy to suit your financial situ-ation, but that it will also inspireyou to think critically aboutcauses that are important toyou. By setting charitable goalswisely, each of us can make a difference today and leave ameaningful legacy for tomorrow.

Editor’s Note

Angela Murphy,Editor

For more than 130 years, philanthropy has made

the difference to the care that SickKids can provide

to the most critically-ill children in Canada and

around the world. Your legacy gift today will make

a real difference to the children we serve 130 years

from now.

Please consider including SickKids in your

estate plans and join our vision that sees every

child healthy.

For more information, please visit us at

www.sickkidsfoundation.com/legacy. For specific

inquiries, call 416.813.8271 or email us at

[email protected]

CHILDREN HAVE LIMITLESSPOTENTIAL. TO REACH IT,THEY NEED THEIR HEALTH.

Gold

LEAVE A LEGACY™ is an

initiative of the Greater

Toronto Area Round Table

of the Canadian Association

of Gift Planners (CAGP) in

partnership with local

charities, not-for-profit

organizations, sponsors

and estate planning

professionals in the GTA.

We gratefully acknowledge5 YEARS OF PARTNERSHIPand ongoing support fromour sponsors:

Platinum

YOUR GUIDE TO CHARITABLE GIVING & ESTATE PLANNING 3

TABLE OF CONTENTSThe First Anniversary of Zero Capital Gains Tax ..............................

Federal Government Supports Giving to Private Foundations ......................

Aligning Personal Values with Giving Objectives .......................................

Estate and Tax Planning with the 2007 Federal Budget ......................

Gifting Stock Options .........................................

The Changing Nature of Philanthropy ................................................................

The RichLife: Live Well, Give Back, Leave A Legacy .............................

Building a Legacy with Endowed Gifts ..............................................

Donor Advised Funds- Easy, Quick, Smart! .............................................

Directory of Professional Advisorsand Charitable Organizations .................

Make Giving Affordable ....................................

Planned Giving Internationally .....................

A Summary of Charitable Giving Options ........................................................

Donations of Flow-through Shares ..............................................................................

Avoid Common Legal Problems When Making Bequests ....................................

Celebrating a Canadian Philanthropic Milestone ....................................

Planned giving, very simply, is the process

of designating charitable gifts so that the values

and causes you hold dear – your philanthropic interests

– are supported within your estate while maximizing

tax and other financial benefits.

LEAVE A LEGACY™ Greater Toronto Area is

a collaborative effort involving professional

advisors and charitable organizations including

social service agencies, foundations, educational

institutions, health organizations and other religious,

environmental and philanthropic groups to promote

interest in charitable giving through a will

or a planned gift.

LEAVE A LEGACY™GTA is a program of the

Canadian Association of Gift Planners (CAGP*ACPDP)

to promote interest in making planned gifts.

The Association brings together professionals from

various disciplines to ensure that the gift planning

process achieves a fair and proper balance between

the interests of donors and the aims and objectives

of registered charitable organizations in Canada in

accordance with the Association's Standards of

Professional and Ethical Practice.

•

To learn more about the Canadian Association

of Gift Planners™, please visit their website at

www.cagp-acpdp.org.•

To learn more about LEAVE A LEGACY™

Greater Toronto Area, please visit our website at

www.cagptoronto.org.

5

6

7

8

9

10

11

12

13

14

17

19

21

23

25

27

Dear Reader,

Did you find this publication of value withrespect to your charitable giving and estate planning needs?

We are interested in your comments.

Please email us at [email protected] or write to:GTA RoundTable Coordinatorc/o CAGP, 777 Bay St., P.O. Box 46093 Toronto, Ont. M5G 2P6. Phone: 416-410-5251

R E A D E R F E E D B A C K R E Q U E S T


LEAVE A LEGACY™ is an initiative of the Greater TorontoArea Round Table of the Canadian Association of GiftPlanners (CAGP) in partnership with local charities, not-for-profit organizations, sponsors and estate planningprofessionals in the GTA.

The information provided heredoes not constitute legal or financialadvice and should not be reliedupon as a substitute for professionaladvice. You should always seekappropriate legal, estate planningand financial advice before decidingon a course of action.

The information may be used,reproduced, published, distributed,stored and archived in whole, or inpart, in any form or medium what-

EDITORIAL BOARD 2006/07

Angela MurphyEditor

Deborah Bauder

Malcolm Berry

Melanie Gaertner

Winsor Pepall

Jill Nelson

soever without permission. In fact,you are encouraged to photocopyand share widely.

Limited copies of this magazine areavailable. Please call (416) 410-5251.

MAY 2007

Charitable GivingYOUR GUIDE TO

& ESTATE PLANNINGCharitable Giving

YOUR GUIDE TO

& ESTATE PLANNING

For 88 years, Baycrest has been giving the bestpossible care to seniors and their families. Ourgreatest impact is in our ability to bring care forthe aging population to a new level through thepower of research and education, and to applythis to the most pressing health issue facing theelderly — brain disorders such as Alzheimer’sdisease, stroke and dementia.

While we are proud of our achievements, weknow that much more must be done to furtherour mission of enriching the lives of the elderly.And we know that only through inquiry anddiscovery will Baycrest improve the health oftomorrow’s elderly while at the same time, carefor the elderly of today.

By including Baycrest in your will, you aresupporting the critical work we do in care,research and education related to aging. Yourlegacy will help us continue to enrich the lives ofthe elderly for generations to come.

3560 Bathurst StreetToronto, ON M6A 2E1Tel. 416 785 2500, ext. 2055Fax 416 785 2373

www.baycrest.org

Age is a gift

Foundation Please call Wendy Sung-Aadat 416-461-0769Email: [email protected]: www.nellies.org

Emergency Shelter and SupportPrograms for Women & Kids

Charitable Registration: 11930 2727 RR0001

Since 1973, Nellie’s has

helped to rebuild the lives

of over 10,000 women and

children fleeing violence,

poverty and homelessness.

YOUR PLANNED GIFT

to our Legacy of Hope Fund

will feed, protect, shelter and

save women and children

with nowhere else to turn.

PROJECT MANAGEMENT, LAYOUT& DESIGN AND PRODUCTION BY

Gawenda and Company. (416) 485-0103


Unrealized capital gains areexpected to increase which mayfuel a continued rise in thesedonations.

TD Economics estimatesthat the market value of stockheld by Canadians in 10 yearstime could exceed $3 trillion,with as much of two-thirds ofthat in unrealized gains. (Full

report released May 1st, 2007 may be

viewed at www.tdeconomics.com).

More Opportunity

While a rising stock marketcan certainly provide a strongincentive to donate securities,unexpected taxable events canalso be compelling motivators.

Mergers and Acquisitions

One example of such eventsis merger and acquisition(M&A) activity. Corporatetakeovers can create an unantic-ipated tax consequence that canbe reduced with a stock dona-tion strategy. If the M&A deal isstructured so that the share-holders of the target companyreceive cash for their shares, thetransaction will trigger a taxablecapital gain and 50% of the gainis taxable. A strategy to donatestock prior to the closing of thetransaction can reduce the capital

This month marks the firstanniversary of the government’sannouncement that capital gainstax for donations of publiclytraded securities to charities andfoundations would be elim-inated. The charitable sector,which had been lobbying for thechange since 1997, applaudedthis announcement in May 2006.While the data for 2006 donations is not yet available,anecdotal evidence suggests thatthere has been a surge in dona-tions of securities. There hasalso been media coverage ofsome very large gifts in the pastyear.

Huge Potential for StockDonations for Tax Savvy

Investors

Statistics Canada reportedthat the total market value ofstock held by Canadians at theend of 2006 was an astounding$1.4 trillion, an increase of $100billion over the previous year.Approximately one-half of thatmarket value represents unreal-ized capital gains, suggestingthat the opportunity for manyshareholders to donate stockand save tax is very significant.

gains tax payable on the shares notdonated.

In 2006, there were some high profile M&A deals. Forexample, Inco and Falconbridgesold for about $40 billion. In2007 companies such as ShellCanada, Four Seasons, andLakeport Brewing were involvedin such takeovers and the trendis expected to continue.

Demutualization

Another event that has creat-ed opportunity for stock dona-tions is the demutualization ofinsurance companies.

Demutualization is theprocess of converting from amutual company, owned by itspolicyholders, to a companywith common shares, owned byits shareholders.

Legislation allowing lifeinsurance companies to do thiswas enacted in 1999. As a resultof demutualization, the policyholders had a choice to receiveshares of the company or theequivalent in cash. For thosethat opted for shares, the costbase of the newly acquiredshares was zero. This cost baseand market increases sincedemutualization make a stockdonation strategy for these

Canadian charities and donors reap the benefits of the elimination of capital gains tax for gifts ofappreciated securities.

shareholders very compelling.Shareholders of companies

that went through this process,such as Manulife and Sun Life,may find themselves consideringsuch donations.

Summary

In summary, if you are con-sidering making a donation tocharity and own securities thathave appreciated, you are alwaysbetter off donating the securitiesinstead of cash. Even if you don’twant to part with your stockbecause you believe there is stillupside potential for it, considerdonating the stock to charity andthen re-purchasing it (there is no30 day waiting period required).You will eliminate the capitalgains tax, receive a charitable taxreceipt resulting in a tax credit,and you will have “stepped up”the adjusted cost base of those re-purchased shares.

As everyone’s situation is different, please consult withyour tax advisor before making adecision.

Jo-Anne Ryan is Vice President, PhilanthropicAdvisory Services, TD Waterhouse CanadaInc. and the Executive Director and architectof the Private Giving Foundation, the firstdonor advised fund program to be launchedby a financial institution in Canada,

www.TDWaterhouse.ca/privategiving

Jo-Anne Ryan

The First Anniversary of Zero Capital Gains Tax


To address self-dealing con-cerns, the Federal Governmentproposes an excess businessholdings regime (based on theUnited States model) applicableto all private foundationsbeginning with their first taxa-tion year that begins on or afterMarch 19, 2007. While the government was concernedthat persons could use theirshareholdings combined withthe holdings of the foundationto influence a corporation fortheir own benefit, in our expe-rience these abuses are exceed-ingly rare and could be dealtwith under existing law. Theregime has overly broad appli-cation and will impact privatefoundations across Canada inways we expect the Departmentof Finance has not understood.

Safe Harbour

Where a private foundationholds 2% or less of all out-standing shares of each class ofa corporation, the foundationwill not be required to monitor,

report or divest itself of anyshares.

Monitoring Phase

If at any time in a taxationyear a private foundation holdsmore than 2% of the outstandingshares of a class of a corpora-tion, it will be required:

1. To determine and report tothe Canada Revenue Agency(CRA), the shares held at theend of the year in all shareclasses of that corporation,by it and by any person notdealing with it at arm’slength.

2. To report any transactioninvolving more than $100,000worth of shares of a particularclass or more than 0.5% ofthe outstanding shares of aparticular class by the foun-dation or the non-arm’slength person(s) occurringduring the period when thefoundation’s shareholdingswere over 2%.

While this information isexpected to be publicly avail-able on the CRA CharitiesDirectorate website in theannual return, the names of the

non-arm’s length persons willnot be listed.

Divestment Required

Where the private founda-tion and non-arm’s length per-sons together hold more than20% percent of all outstandingshares of a share class of a corporation, in addition to the

reporting requirements, thefoundation and the non-arm’slength persons must reducetheir combined holdings to20% or less. The deadline forthis divesture will depend onhow the excess arose and CRAwill have discretion to defer

handprint on future generationsby leaving a gift in your will.

Leave your

Your contribution funds vital research and programs,helping families take control of arthritis.

call SANDRA DOW at The Arthritis Society416.979.7228, ext. 343www.arthritis.ca

For more information:

2270 TAS PSA ad cmyk fin 3/23/07 12:47 PM Page 1

Federal Government SupportsGiving to Private Foundations

Susan Manwaring andKate Campbell

The 2007 Federal Budget proposes to extend theexemption from tax on gifts of publicly listed securities to gifts made to private foundations on or after March 19, 2007. Similarly, the specialexemption available to gifts of publicly listed securities acquired by an arm’s length employeeunder options granted by the employer and donatedto the charity within 30 days of the exercise will beextended to gifts made to a private foundation.

CONTINUED ON PAGE 16


By including the University of Toronto in yourgift plans, you too can have a hand in transformingthe future.

No Canadian university and few worldwidecan match U of T’s impact. From space explorationto medicine, from the sciences, philosophy, and thearts to politics, mass media, and the professions,U of T changes lives.

You can create opportunities for future generationsof students and enable our graduates andprofessors to make a difference – now andfor years to come.

Ask us how: Call 1-800-463-6048E-mail: [email protected] www.giving.utoronto.ca/plangiving

Time and money are limited. Therefore, it makessense to plan the use of thesetwo resources to achieve yourlife objectives, one of whichmay be to benefit the world inwhich we live.

Do you plan your charitablegiving or do you allocate your donations in a haphazard

manner? A planned approachmight be to:1. Ask yourself the questions

above;2. Decide in advance which

organizations you’d like tobenefit based on youranswers;

3. Divide your total donatedtime and money amongstthe charities that you’veselected.

This structured process will

Aligning Personal Values with Giving Objectives

help you to make a consciousdecision to align your personalvalues with your giving objec-tives. The charitable mandatesthat matter most to you willreceive the majority of yourdonated time and money. Yourrelative contributions to thoseorganizations will be moremeaningful to them and to you.

For example, let’s say that ifmoney weren’t a concern, you

Cynthia Kett

What would you choose to do with your time if money weren’t an issue? Who and what are most important to you? What do you enjoy doing most?These are questions that a career counselor might ask, but they apply equallyto charitable giving decisions.



On March 19, 2007, FinanceMinister Jim Flaherty announcedthe 2007 Federal Budget.

For individuals, the budgetincludes changes to theRegistered Education SavingsPlans (RESPs), a new child taxcredit, changes to the lifetimecapital gains exemption, andchanges to the age limit formaturing Registered PensionPlans (RPPs) and RegisteredRetirement Savings Plans(RRSPs).

Of interest to corporations are

changes to the capital costallowance rules for manufactur-ers and certain “green technolo-gies” as well as changes to certaininternational taxation rules.

Registered Education Savings Plans

The 2007 Federal Budget pro-poses changes to the lifetimelimit on contributions. The life-time limit on contributions isincreased to $50,000 from$42,000. As well, the annual limiton contributions is eliminated.In other words, if desired, whenan RESP is established, it can befunded with the full lifetime

amount. The maximum annualCanada Education SavingsGrant (CESG) is increased to$500 while the lifetime CESGremains unchanged at $7,200.

New Child Tax Credit

The 2007 Federal Budget pro-poses a new non-refundable childtax credit for parents. The pro-posed credit is based on anamount of $2,000 for each childunder age 18 at the end of theyear, beginning with the 2007 tax-ation year. It is proposed that thiscredit be indexed to inflation, andunused credit amounts may betransferred between spouses.

Lifetime Capital GainsExemption

The budget proposes anincrease to the lifetime capitalgains exemption for qualifiedsmall business corporationshares and qualified farming andfishing property. Under the pro-posals, the exemption will beincreased to $750,000 (from thecurrent $500,000 exemption) fordispositions of property occur-ring on or after March 19, 2007.Transitional rules will apply for2007.

Estate and Tax Planning with the2007 Federal Budget James A. Hutchinson &Amanda J. Stacey


Call 416.921.2035 or visit tcf.ca

What do dancers, a community garden and youth basketball have in common?The Toronto Community Foundation is the common thread that connects Torontonians who care to causes that matter.If you want to make the most of your charitable giving, the Toronto Community Foundation can:

• give you all the benefits of a private foundation without the administrative, regulatory andreporting burden

• advise you on charities, programs and sectors that interest you

• help you involve your family in your philanthropic goals

• build your legacy by providing the maximum tax savings available and superior investmentmanagement of your endowment funds

Maximize the impact of your charitable giving through a Donor-Advised Fund with the Toronto Community Foundation.

Connecting Philanthropy to Community Needs


Stock options can be animportant component of anoverall compensation plan.These options are granted by acorporation to certain employeesand confer the right to buy aspecified number of the corpo-ration’s shares at a pre-deter-mined price (the exercise price)during a particular time period.

From the perspective ofthe granting corporation, stockoptions may constitute a pow-erful tool to attract and retaintop talent. They are typicallygranted to senior executives butsome companies also offer themto rank-and-file employees.

According to Watson Wyatt,a high profile human resourceconsulting firm, 98.6% ofcompanies in the S&P/TSXComposite Index had stockoption plans in place in 2003.

When stock options are exer-cised, the difference between thestock’s fair market value and its exercise price is considered ataxable employment benefit andis taxed at the same rate as a cap-ital gain. This means that 50%of the difference is taxable asincome. However, if the stock isdonated to a registered Canadiancharity within 30 days of theexercise date (provided it is with-in the same calendar year) the

Gifting Stock Options

tax is eliminated.Over many years of working

with executives in an advisorycapacity, I have been struck bytheir commitment to charitablegiving, not only in terms oftheir time but also in terms offinancial support. However,opportunities to maximize taxbenefits by gifting stock,including stock obtainedthrough the exercise of stockoptions are often overlooked.

I have also found that it is alltoo common for an executive’sinvestment portfolio to have alarge concentration in a singlestock that of his or her employer.Such a concentration may pro-

Jo-Anne Ryan

Proper handling of stock options can provide significant tax savings. vide a strong incentive to workhard on behalf of shareholderswho, after all, include the execu-tive. Unfortunately, such a lackof diversification entails consid-erable risk for the executive sincemuch of his or her wealth is tiedto the ups and downs of a singlecompany’s share price.

However, if the executive isphilanthropically-minded, and itappears that many are, stockoptions can be used to reducethis risk while fulfilling charita-ble objectives in a tax efficientmanner. See the case study belowfor an example.

Everyone’s situation is differ-ent, so consult your tax advisorto determine the most appropri-ate strategy for your situation.

A Legacy of Honour..."When I was a young girl I learned many things from

my grandmother. A refugee from Russia, she struggled to raise her family in a new country. She inspired

me to attend university, and I was the first woman in my family to achieve that goal. I

remain grateful that my studies gave me the opportunity to do two things

I love - teaching and research. In her honour I have established the

Mary Rosenthal Scholarship, and in my will I plan to leave a bequest to establish the Phyllis and James Forsyth Scholarship

to assist deserving students."

Dr. Phyllis Young Forsyth

Call Sharon McKay-Todd today to find out how you can leave a legacy.

519-888-4567 ext. 35413 • [email protected]/plannedgiving

An Executive of XYZ Corporation was heavily invested in stock andstock options of XYZ Corporation. In fact, 90% of his investment port-folio consisted of this one position. He gives generously to severalcharities each year by writing a series of cheques. We worked outthe following scenario with him:

Step 1: He exercised one set of options and sold the stock he received.

Step 2: With the help of his investment advisor, he invested the pro-ceeds of the sale in a diversified portfolio.

Step 3: We calculated the tax liability generated in Step 1 and usedthis calculation to determine a target amount of stock thatshould be donated to a charity to offset the liability.

Step 4: He exercised a second set of options and donated the stockto the Private Giving Foundation, a registered Canadiancharity. The Foundation will invest the funds and directincome and capital appreciation to charities recommendedby the executive.

Benefits:

• The concentration of XYZ stock in his portfolio was reduced and hisoverall level of diversification was improved.

• His donation of shares to the Private Giving Foundation was tax-free.Furthermore, as a result of the donation he received a charitable taxreceipt that can be used to offset the tax liability generated in Step 1.

• The donor advised fund arrangement will allow him to direct his charity dollars as he sees fit, but without the necessity of writingcheques each year and without the set-up, on-going legal fees and administrative burdens associated with establishing and maintaining a private foundation.

• If he wishes, he may name the fund and even name a successor to direct his charitable dollars and ensure that his philanthropiclegacy is carried on by future generations.

CASE STUDY - Gifting Stock Options


Bill Gates originally expectedto give away his fortune muchlater in life. But the World Bank’s1993 World Development Reportconvinced him to accelerate hisplans. “My personal commit-ment to improving global healthstarted when I learned abouthealth inequities,” said Gates in a2002 speech. “My wife Melindaand I were stunned to learn that11 million children die everyyear from preventable causes.”So at age 45, Gates set up the Billand Melinda Gates Foundation(the Gates Foundation). TheFoundation has made total grantcommitments of $10.5 billionsince it began in 2000. Today,Bill Gates is not only the world’srichest person; he is also theworld’s most well known philanthropist.

In a similar vein, for decadesWarren Buffett said that hiswealth would be distributedafter his death. However, in June2006, Buffett announced plansto donate $31 billion to the GatesFoundation, effectively doublingthe assets of what is already thelargest foundation in the world.Why now? “I know what I wantto do, and it makes sense to getgoing,” said Buffett.

Giving money away earlier isjust one of the trends of the newphilanthropy. While previouslythe bulk of charitable founda-tions were set up throughbequests, there has been a

dramatic rise in the number offoundations set up by the living.Today, ‘the sooner the better’seems to be the motto of newphilanthropists, who prefer toactively shape a personal legacyduring their lifetimes and see thebenefit of their contributions.

Other billionaires who set upfoundations while relativelyyoung include Sergey Brin andLarry Page, the founders ofGoogle, who launched theGoogle Foundation in 2005while in their early 30s. Also,eBay founder Pierre Omidyarlaunched the Omidyar Networkwith his wife Pam in 2004 whenhe was 37 years old.

The Rise of Venture Philanthropy

Like Gates and Buffett, manyof today’s prominent philanthro-pists earned their wealth throughinvestments or business successrather than through inheritance,thanks largely to the technologyboom and bull market of the late1990s. As such, they also tend toapply a businesslike approach togiving, a practice sometimescalled “venture philanthropy”.These donors behave much likeinvestors, allocating their dollarswhere they feel they will makethe greatest difference. In economic terms, you could saythey are attempting to maximizetheir social return. This wasBuffett’s strategy in giving to theGates Foundation. When asked

why he chose to give to someoneelse’s foundation instead ofsetting up his own, Buffettresponded, “Who wouldn’t wantTiger Woods to take his place in ahigh stakes golf game? That’show I feel about this decisionabout my money.”

Going Global

One of the more strikingthings about the GatesFoundation is its biggest focus -global health. About 70% of

grants go to global efforts, while30% are dedicated to causesinside the United States. TheFoundation gave global philan-thropy a huge boost in August2006, pledging half a billiondollars to the Global Fund toFight AIDS, Tuberculosis andMalaria. Such visible global aidis encouraging more individualglobal giving as well. While inthe past funding for global


The ChangingNature of PhilanthropyBrad Offman


Let your legacy build a better future by including Ryerson in your estate plans. Leave a legacy to Ryerson.

Tel: 416-979-5000, ext. 7922 E-mail: [email protected]

futuresinvestin

The RichLife: Live Well,Give Back, Leave A Legacy

Susan Latremoille

We each define our own success. We can evaluate our priorities. We can write our ownobituaries, and then live up tothem. We can imagine howour grandchildren will talkabout us, and then we canchange if we want them tosay something different. Justlike Ebenezer Scrooge inDickens’ A Christmas Carol,we have the opportunity tosee into the future, envisionwhat we want it to be, andthen to plan for it, and makeour dream a reality.

What’s your definition? Whatdoes living the RichLife mean foryou? What will it take for you tolook back at your life with a senseof satisfaction and fulfillment? Ihave heard some sad stories frommy clients through the years, andeach time I hear one it makes mewish that I could have met thisperson years earlier and helped

them to see their finances are animportant part of their life, nottheir whole life.

The RichLife is not just aboutmoney, though money can cer-tainly be an invaluable enabler.

Making, keeping, and growingwealth can be an honourableobjective, especially when it isdone with the thought of howthat wealth can be used to createa better experience of life for our-selves and for others. Money isvital, but we need to make sure itis worth more than the paper it isprinted on.

It is important for people tolive well, to enjoy the rewards oftheir hard work, to have the kindof life that serves both their needsand their passions. For some,living well means having enough

money to give some ofit away. Travelling. Havingmore than one pair of eye-glasses. For others it meansbeing healthy, enjoyingwork instead of dreading it,having satisfying relation-ships with family andfriends. It means finallybanishing the worry thatkept them on edge andsometimes left them sleep-

less. Living well is physical,mental, emotional, spiritual andfinancial comfort.

It is important to give back;giving back feels good. You cangive back to your family, to yourcommunity, to your city or toyour country, to people whoselives may have been touched bysomething that touched yours –

On our gravestones, two dates will be marked: the day we are born andthe day we die. But life takes place in the space, the dash, in between.We are all somewhere in our dash.

Adapted from The RichLife: Managing Wealth andPurpose by Susan Latremoille. Susan is the founderof The Latremoille Group, and a First Vice Presidentand Wealth Advisor at Richardson PartnersFinancial’s Toronto office.www.TheLatremoilleGroup.com

illness, accident, tragedy, or love.No matter what people do,

they leave a legacy. It may be alegacy they intended to leave, orit may not. Their legacy may beas lasting as an opera house ormuseum wing, or it may be asephemeral as how they areremembered by their family andtheir friends. What will be yourlegacy?

Let us all strive to live theRichLife. This is the journey.

TT HH EE RR II CC HH LL II FF EELive Well:

work hard, enjoy a good lifestyle and a good life

Give Back:work smart, create wealth and use it to make the world a better place

Leave a Legacy:build something that you can be proud of and that your families and friends can be

proud of after you are gone

A world of discovery for future generations

Include the Museum in your will. Ask us how.

Contact Michelle Osborne at [email protected] or 416.586.8012


An endowed gift should bea fundamental building blockof a planned giving programfor any charity, and it is becom-ing an attractive option fordonors who would like to makea gift of lasting value. The capital and/or the income canbe restricted to a particular use, such as scholarships orresearch, or can be left unre-stricted and used for the generalcharitable purposes of the char-ity. The yearly disbursement ofincome and capital by the char-ity can be left to the discretionof the charity or it can be made

subject to donor advice, forexample, a donor advised fund.

When structuring a donorendowment agreement, donorsand their professional advisors,as well as the recipient charity,need to consider a range offactors, including:

• Is there to be a minimumamount required to establishan endowment agreement?

• Is the fund created by anendowment agreement toconsist of, for example, moniesor gifts of stock?

• Is the capital of the fund to beheld in perpetuity or only on along-term basis (i.e., at least

ten years as a minimum)?

• What is the purpose of thefund, e.g., is there to be arestriction in relation to theuse of the income and/or capital or can it be used for thegeneral charitable purpose ofthe charity?

• Is the investment policy of thecharity to be incorporated byreference into the endowmentagreement or is the donorallowed to impose specificinvestment terms of referenceon the gift?

• Does the charity have a dis-bursement policy to deter-mine how much income is tobe paid out each year from theendowed fund to the benefit ofthe charity?

• Does the endowment agree-ment permit a transfer of theendowed fund and change oftrustee to another charity, suchas to a parallel foundation?

• Does the endowment agree-ment include a clause to permit the charity to changethe purpose of the gift in theevent that the original purposebecomes impossible orimpractical?

• Does the endowment agree-ment need to include provi-sions to protect the endowedgift by requiring it to be trans-ferred to another charity in theevent of the insolvency, bank-ruptcy or winding up of thecharity?

• Is the donor to be given nam-ing rights, such as in relationto the endowment fund, a program or building of thecharity, and if so, for how long?

• Does the charity wish toreserve the right to refuse oreven return the gift made tothe endowment fund and if sounder what circumstances?

• Has the donor been advised toseek independent legal and/ortax advice?

Structuring an endowed gift is a multi-faceted process,particularly when new legisla-tive initiatives must be consid-ered, such as recent changes tothe Income Tax Act.

For further articles onendowed gifts and donorrestricted charitable trusts,readers are invited to visitwww.charitylaw.ca.

Building a Legacy withEndowed GiftsTerrance S. Carter

Terrance S. Carter is Managing Partner atCarters Professional Corporation, practises inthe area of charity and not-for-profit law withan emphasis on fund-raising and gift planning,and is counsel to and affiliated with FaskenMartineau DuMoulin LLP. Mr. Carter is a fre-quent author and speaker in the area of chari-ty and not-for-profit law and has been recog-nized by Lexpert as one of the leadingCanadian experts in this area.


A donor advised fund issimilar to creating your own‘private foundation’, but sim-pler. There are many differenttypes of organizations thatoffer donor advised funds, fromcharities to financial institu-tions. The process is generallysimple and straightforward:

First, you need to establish a donor advised fund with aregistered Canadian charity,name the fund and make a

donation. Next, the funds areinvested by the charity and earnincome that will in turn beavailable for charitable purposes.Finally, you will have theopportunity to recommendannual grants from the donoradvised fund to your favouriteregistered Canadian charities.To create a lasting legacy foryour family, you can also namesuccessors to the fund, ensuringyour children and grandchil-dren have the opportunity to continue your tradition of

philanthropy for generations tocome.

Once established, managingyour donor advised fund iseasy. All administration andreporting is done by the charitywhile the donor reaps severalimportant benefits:

• When a contribution isreceived, you will be issuedan official charitable taxreceipt. To contribute toyour donor advised fund,you may opt to donate cash,securities (a great tax benefitas capital gains tax on gifts ofpublicly traded securities tocharities has been eliminated)and, with some charitablefoundations, other assetssuch as insurance, real estate,art, a bequest, or by namingthe charity as beneficiary of aregistered retirement plan.

• The fund is invested and maybenefit from an improvedrate of return as an endow-ment is usually pooled withother funds. This creates an

opportunity for for the fundto grow and thereby increasethe amount available forgranting to charities eachyear.

• Annually, you recommendwhat charities should receivegrants and the charity han-dles the fund administrationat a low cost.

As a donor, there are a widerange of unique organizationsyou can consider when decid-ing on a donor advised fund.You can establish your ownfund at one of the major finan-cial institutions, such as ScotiaPrivate Client Group’s AqueductFoundation or TD Waterhouse’sPrivate Giving Foundation.

Some Community Found-ations also offer donor advisedfunds. Not only can they man-age and pool your gifts, theyalso can provide valuable com-munity advice on charitableneeds and help donors identifythe most appropriate charity

Donor Advised FundsEasy, Quick, Smart!


Terry Smith

Would you like the privileges of a private foundation without all the work? A donor advised fund may be the answer for you.

HELP YOUR CLIENTS CREATE A LEGACY THROUGHYORK UNIVERSITY FOUNDATION

Renowned for its unparalleled academic experience, York

University offers internationally top-ranked programs, an

innovative, collaborative and multifaceted approach to research,

and a unique interdisciplinary learning experience for students.

It’s at the heart of York’s mission to: explore the unusual, push

the boundaries, and redefine the possible.

York University Foundation works closely with allied

professionals to help clients achieve their estate planning

objectives by way of future gifts in support of York University.

To learn more, please call Susan Mullin, Vice President,

Development, at 416-650-8210 or email

[email protected]

www.yorku.ca/foundation

growth progress innovate transformpossibilityvolunteer givechallenge

LEAVE A LASTING

IMPRESSIONLEAVE A LASTING

IMPRESSION

growth progress innovate transformpossibilityvolunteer givechallenge growth progress innovate transformpossibilityvolunteer givechallenge growth progress innovate transformpossibilityvolunteer givechallenge

TR

AN

SF

OR

M

PO

SS

IBIL

ITY

TR

AN

SF

OR

M

PO

SS

IBIL

ITY

Professional Advisors andCharitable Organizations

DIR

ECTO

RY


Sponsored by:

PhilanthropicAdvisorPhilanthropic Partnerships Inc.33 University Avenue, Suite 1207Toronto, ON M5J 2S7Contact: Terry SmithPhone: 416-357-1231Fax: 647-438-7489Email: [email protected]

Providing support to donors and corporations in their philanthropic giving,including; matching donors and charities,assessments, philanthropic planning, grantmaking and monitoring results.

Website: www.philanthropic.ca

CharitiesAboutFace123 Edward St., Suite 1003Toronto, ON M5G 1E2Contact: Ann Gorwill, Manager ofDevelopmentPhone: 416-597-2229Fax: 416-597-8494Email: [email protected]

AboutFace provides information services,emotional support and educational pro-grams for children and adults with facialdisfigurements living in Canada andinternationally.

Website: www.aboutface.ca

Arthritis & AutoimmunityResearch Centre (AARC)Foundation190 Elizabeth StreetR. Fraser Elliott Bldg., 5th FloorToronto, ON M5G 2C4Contact: Gerri Grant – ExecutiveDirectorPhone: 416-340-4975Email: [email protected]

The AARC Foundation at UniversityHealth Network raises funds for arthritisand related autoimmune and muscu-loskeletal disease research at Canada’smost comprehensive centre in this field.

Website: www.beatarthritis.ca

The Arthritis Society393 University Avenue, Suite 1700Toronto, ON M5G 1E6Contact: Sandra Dow, ext. 343Phone: 416-979-7228Fax: 416-979-8366Email: [email protected]

The Arthritis Society is Canada’s principalnon-profit organization dedicated tosearching for the underlying causes ofarthritis, and funding vital research,educational programs and communitysupport services.

Website: www.arthritis.ca

LawyersMiller Thomson LLPScotia Plaza40 King Street West, Suite 5800 PO Box 1101Toronto, ON M5H 3S1Tel: 416-595-8500

Website: www.millerthomson.com

Miller Thomson is a national full servicelaw firm with over 500 professionals work-ing from 10 offices across Canada. Ourlawyers have over 50 years of experience inestate, tax and gift planning, structuringendowment programs and representingcharitable and not-for-profit institutions,their directors, trustees and donors.

Contact: Susan Manwaring Tel: 416-596-8583 [email protected] Private Client Services, Charities & Not-for-Profit Organizations,Taxation

Contact: Martin Rochwerg Tel: 416-596-2116 [email protected] Client Services, Charities & Not-for-Profit Organizations, Taxation

Blaney McMurtry LLP2 Queen St., E., Suite 1500Toronto, ON M5C 3G5Contact: Barry T. GrantPhone: 416-593-3929Email: [email protected]

Wills and Trusts, Powers of Attorney,Estate Administration, Personal & FamilyBusiness Planning, Member EstatePlanning Council of Toronto and Sociey ofEstate and Trust Practitioners.

Website: www.blaney.com

Carters Professional Corporation211 BroadwayOrangeville, ON L9W 1K4Contact: Terrance S. CarterPhone: 519-942-0001Fax: 519-942-0300Email: [email protected]

Carters Professional Corporation is one ofthe leading firms in Canada in the area ofcharity and not-for-profit law and pro-vides a full range of related legal services.With offices in Ottawa, Mississauga andOrangeville, Ontario, as well as meetingfacilities in Toronto, London, Guelph andVancouver, Carters provides assistance toclients across Canada and internationally.

Website: www.carters.ca

Gift & EstatePlanningAl G. Brown & Associates970 Lawrence Avenue West, Suite 501Toronto, ON M6A 3B6Contact: David Wm. Brown CLU,ChFC, RHU, TEP, CFPPhone: 416-787-6176Fax: 416-787-0451Email: [email protected]

We have been providing estate preserva-tion and charitable funding strategies for

over 60 years. The Estate PreservationProcess is a unique process which protectsand preserves an Estate and creates aneverlasting legacy for charities and futuregenerations.

Website: www.algbrown.com

Link Charity Canada Inc.45 Harriet StreetToronto, ON M4L 2G1

Contact: Harry Houtman, MA, CFPPhone: 416-410-4244Fax: 416-465-6367Email: [email protected]

Facilitate gifts of securities, manage donor advised funds and self-issued giftannuities. Facilitate gifts of RRSP, RRIFand life insurance as coordinating beneficiary, etc. Donor centred.

Website: www.linkcharity.ca

Scotia Private Client GroupPhilanthropic Advisory Services

1200 – One Queen Street EastToronto, ON M5C 2W5

Contact: Malcolm D. Burrows, HeadJoshua E. Thorne, Manager

Phone: 416-933-2351 / 866-216-2116Email: [email protected]

With an 80-year legacy of managing charitable foundations, SPCG creates andimplements comprehensive philanthropicplans and donor advised funds driven byour clients’ values.

Website: www.scotiabank.com

FinancialPlanningBlueprint Wealth & EstatePlanning Inc.44 Victoria Street, Suite 1417Toronto, ON M5C 1Y2

Contact: Peter Bennett, CFP,CLU,ChFCBill Poole, CFP, CLU, ChFC

Phone: 416-203-1977Fax: 416-203-1574Email: [email protected]

Using a values based planning process,we help our clients secure what they value,build what’s important, and pass on whatis lasting.

WealthManagementFoyston, Gordon & Payne Inc.1 Adelaide Street East, Suite 2600Toronto, ON M5C 2V9Contact: Mark Klinkow, CFA,Portfolio ManagerPhone: 416-362-4725 ext. 265Fax: 416-367-1183Email: [email protected]

FGP is a discretionary investment counsel.We use a value style that emphasizes thepreservation of capital. FGP manageswealth for individuals, endowments, foun-dations and pension funds.

Website: www.foyston.com

The Griffin Group, BlackmontCapital Inc.

4100 Yonge Street, Suite 500Toronto, ON M2P 2B5

Contact: Nancy Griffin, CFPPhone: 416-874-8937Fax: 416-221-1958Email: [email protected]

Wealth Advice designed to encourage gen-erosity through wealth management – sothat your personal passions are reflected inyour financial plan – thereby creatingyour ongoing personal Passionate Legacy*.

*registered trademark of Nancy Griffin

www.blackmont.com/thegriffingroup

RBC Private Banking

Royal Bank Plaza200 Bay Street, 10th FloorToronto, ON M5J 2J5Contact: Nora Jones, CA, MBA, CFP,TEPPhone: 416-974-6296Fax: 416-974-5380Email: [email protected]

RBC Private Banking offers customizedservices for individual clients and theirfamilies, trusts and holding companiesthrough a one-on-one relationship with aPrivate Banker who can provide planningfor estates/trusts and charitable giving, aswell as develop tailored solutions forinvestment and credit needs.

TD WaterhouseCanada Inc.161 Bay Street, 3rd FloorToronto, ON M4J 2T2Contact: Jo-Anne Ryan, Vice President,Philanthropic Advisory Services

[email protected]

Jo-Anne is responsible for developing philanthropic planning strategies. She isalso the architect and Executive Directorof the Private Giving Foundation, the first donor advised fund program to belaunched by a financial institution inCanada as a simple alternative to a private foundation. Jo-Anne specializes in working with executives and businessowners to develop tax effective philan-thropic planning strategies.

www.tdwaterhouse.ca/privategiving

TD Waterhouse Private Client Services66 Wellington St. West, 2nd FloorToronto, ON M5K 1A2

Contact: David Kelly, MBA, CIM, FCSIRegional Vice President and MarketLeaderPhone: [email protected]

Our Centres leverage teams of experts toprovide integrated banking, investment,insurance and estate and trust solutionsthrough a seamless, holistic approach towealth management.

www.tdwaterhouse.ca


DIR

ECTOR

Ycollections care, gallery and exhibit devel-opment, research and education.

Website: www.rom.on.ca

Ryerson University350 Victoria StreetToronto, ON M5B 2K3Contact: Janet NankivellPhone: 416-979-5000 ext. 7922Fax: 416-979-5368Email: [email protected]

With 23,000 students, Ryerson Universityis Canada’s leader in career-focused edu-cation, with more than 80 graduate andundergraduate programs spanning a widevariety of disciplines.

Website: www.ryerson.ca

SickKids Foundation525 University Ave., 14th FloorToronto, ON M5G 2L3Contact: Angela L. MurphyPhone: [email protected]

Our mission is to inspire our communitiesto invest in health and scientific advancesto improve the lives of children and theirfamilies in Canada and around the world.Our vision: Healthier children. A betterworld.

www.sickkidsfoundation.com

Southlake Regional HealthCentre Foundation615 Davis Drive, Suite 304Newmarket, ON L3Y 2R2Contact: Julie Castle, Director, MajorGiftsPhone: 905-836-7333 / 1-877-457-2036Fax: [email protected]

Supporting Southlake Regional HealthCentre, which provides a complete spec-trum of acute care services as well as fiveadvanced regional programs for YorkRegion and South Simcoe County.

Website: www.southlakeregional.org

St. Michael’s HospitalFoundation30 Bond StreetToronto, ON M5B 1W8Contact: Cynthia Collantes, PlannedGiving OfficerTel: 416-864-5879 Fax: [email protected]

Committed to helping St. Michael'sHospital fulfill and enhance its mission asinspired and fostered by the Sisters of St.Joseph, the St. Michael’s HospitalFoundation is responsible for securingresources for the hospital’s patient care,teaching and research efforts.

Website: www.stmichaelshospital.com

Sunnybrook Health ScienceCentre Foundation2075 Bayview AvenueToronto, ON M4N 3M5Contact: Sandra ScianPhone: 416-480-5877Fax: 416-480-6155Email: [email protected]

Sunnybrook is proud to be an academiccentre of excellence, recognized as a worldleader in patient care, education, researchand knowledge transfer. Our primaryfocus areas include cardiac, cancer,orthopaedic and arthritic, neurosciences,as well as perinatal and gynaecology programs. Sunnybrook is home to one ofCanada’s largest Veterans’ residences, andCanada’s first and largest trauma unit.

The Canadian Hearing Society271 Spadina RoadToronto, ON M5R 2V3Contact: Katherine Hesson-BoltonManager, Major & Planned GivingPhone: 416-928-2500Fax: 416-928-2506Email: [email protected]

Providing services, products, and informa-tion that remove barriers to communica-tion; advance hearing health; and promoteequity for deaf, deafened, and hard ofhearing people.

Website: www.chs.ca

Canadian Mental HealthAssociation, Ontario180 Dundas St. West, Suite 2301Toronto, ON M5G 1Z8Contact: David AlgePhone: 416-977-5580 / 1-800-875-6213Fax: 416-977-2813Email: [email protected]

Working on behalf of, and with ourBranches, CMHA, Ontario promotesmental health and advances excellence inthe delivery of mental health servicesthrough knowledge transfer, policy devel-opment, advocacy and the inclusion ofconsumers and family members in deci-sion making.

Website: www.ontario.cmha.ca

Christian Children’s Fund ofCanada (CCFC)1200 Denison StreetMarkham, ON L3R 8G6Contact: Dorothy Tam, CFRE

Barry BoyackPhone: 905-754-1001Fax: 905-754-1002Email: [email protected]

CCFC reaches out around the world tochildren in need, families and communi-ties of all faiths to demonstrate Christ’slove.

Website: www.ccfcanada.ca

The Heart and StrokeFoundation of Ontario2300 Yonge Street, 13th floorToronto, Ont. M4P 1E4Contact: Mary Goodfellow, Planned Giving Officer1-800 205-4438 ext. 2email: [email protected]

Invest in a future filled with promise, andinclude the Heart and Stroke Foundationin your will. You are supporting leadingheart and stroke research that will make alasting difference in the lives of everyCanadian, for generations to come. Yourlegacy will line on in all of us.

Website: www.heartandstroke.ca

Juvenile Diabetes ResearchFoundation (JDRF)7100 Woodbine Avenue, Suite 311Markham, ON L3R 5J2Contact: Maureen PrycePhone: 905-944-4628Fax: 905-944-0800Email: [email protected]

JDRF’s mission is to find a cure for dia-betes and its complications through thesupport of research.

Website: www.jdrf.ca

Mount Sinai HospitalFoundation of Toronto522 University Avenue, Suite 1001Toronto, ON M5G 1W7Contact: Yolanda Bronstein

Phone: 416-586-4800Fax: 416-586-8639Email: [email protected]

The Foundation lends support to advancethe patient care, teaching and research initiatives of Mount Sinai Hospital andit’s world-renowned Samuel LunenfeldResearch Institute.

Website: www.mtsinai.on.ca/foundation

Multiple Sclerosis Society of Canada175 Bloor St. E., Suite 700, North TowerToronto, ON M4W 3R8Phone: 1-866-679-4557Fax: 416-922-7538Email: [email protected]

To be a leader in finding a cure for multi-ple sclerosis and enabling people affectedby MS to enhance their quality of life.May is MS Awareness Month

Website: www.msbequesthelpdesk.ca

Pet Trust, OVCAlumni House, University of Guelph50 Stone Road EastGuelph, ON N1G 2W1Contact: Andrew Moore ext. 54370Phone: 519-824-4120 ext. 54431Fax: 519-822-2670Email: [email protected]

OVC Pet Trust promotes the health, healthcare, and wellbeing of companion animalsby supporting studies, projects, and studentsat the Ontario Veterinary College.

Website: www.pettrust.ca

The Princess Margaret HospitalFoundation610 University AvenueToronto, ON M5G 2M9Contact: Jill Nelson, Director ofPlanned GivingPhone: 416-946-6562Fax: 416-946-6563Email: [email protected]

Princess Margaret Hospital is the onlyhospital in Canada completely dedicatedto cancer and is one of the top cancer hos-pitals in the world.

Website: www.pmhf.ca

Providence HealthcareFoundation3276 St. Clair Avenue EastToronto, ON M1L 1W1Contact: Gloria Vidovich, Director,Planned GivingPhone: 416-285-3630Fax: 416-285-3753Email: [email protected]

Providence Healthcare, a Catholic-spon-sored facility, provides rehabilitation,complex continuing care, long-term careand outreach programs within a welcom-ing community of compassion, hope andhealing.

Website: www.providence.on.ca

Royal Ontario MuseumGovernors100 Queen’s ParkToronto, ON M5S 2C6Contact: Michelle Osborne, CFRE Phone: 416-586-8012Fax: 416-586-5649Email: [email protected]

The Royal Ontario Museum Governorsraises and manages funds in support ofthe Royal Ontario Museum. Each year,the office of the ROM Governors grantsfunds received from outright gifts andendowment earnings for acquisitions,

Thank you for ensuring SunnybrookHealth Sciences Centre will continue to be there when it matters most.

www.sunnybrookfoundation.ca

Toronto General & WesternHospital FoundationR. Fraser Elliott Building, 5S – 801190 Elizabeth StreetToronto, ON M5G 2C4Contact: Paul Grossman, AssociateDirector, Major and Planned GiftsPhone: 416-340-4854 Fax: 416-340-4864Email: [email protected]

Toronto General & Western HospitalFoundation is dedicated to supportingexcellence in healthcare by raising funds forleading-edge research, medical educationand the enhancement of patient care atToronto General Hospital and TorontoWestern Hospital.

Website: www.tgwhf-uhn.ca

UNICEF Canada1100 - 2200 Yonge StreetToronto, ON M4S 2C6Contact: Michael J. McClintock,Director Major GiftsPhone: 416-482-4444 ext. 809Fax: 416-482-8035Email: [email protected]

UNICEF works in 156 countries to promote child health, nutrition, and education, and to protect children fromdisease (including AIDS and Malaria),exploitation, natural disasters and conflict.

Website: www.unicef.ca

The United Church of Canada3250 Bloor St. W., Suite 300Toronto, ON M8X 2Y4Contact: Bill Steadman, Executive Minister, Financial StewardshipPhone: 416-231-7680 ext.2022Fax: 416-231-3103Email: [email protected]

The United Church supports congregations,education centres and schools, outreachministries, global and ecumenical partnersseeking peace, justice, and respect for creation.

Website: www.united-church.ca

University of Guelph50 Stone Road EastGuelph, ON N1G 2W1Contact: Ross ButlerPhone: 519-824-4120 ext. 56196Fax: 519-822-2670Email: [email protected]

Canada’s top comprehensive university,engaged in teaching and research in food,health, the environment, energy, the artsand social science, agriculture and veterinary medicine.

Website: www.alumni.uoguelph.ca

World Vision Canada1 World DriveMississauga, ON L5T 2Y4Phone: 1-800-714-3280Fax: 905-696-2161Email: [email protected]

World Vision is a Christian humanitarianorganization working in almost 100 coun-tries, to create lasting change in the lives ofchildren, families and communities livingin poverty.

www.worldvision.ca/plannedgiving


Princess Margaret Hospital is

Canada's cancer research hospital.

We are world leaders in cancer

research, education and treatment.

And because everything is under

one roof, cancer patients benefit

immediately from research.

Your bequest to help fight cancer may be

the most significant charitable

gift you ever make. So make sure it

counts. Find out how you can be

remembered for a legacy of helping

to conquer cancer.

For information about bequests and other

ways to plan your gift, please call or write:

The Princess Margaret Hospital Foundation

Planned Giving Office

610 University Avenue,

Toronto, Ontario M5G 2M9

Phone 416.946.6562 Fax 416.946.6563

[email protected] www.pmhf.ca

you can helpconquer cancer

with a gift in your will

Magazine CARP AD 2006:CARP AD 2006.qxd 3/29/2007 10:23 AM Page 1

Prev. UserJob # Filename Last Modified

PERS

ON

NEL

CON

TEN

T

SETU

P

DOCUMENT LOCATIONFONTS

PLACED GRAPHICS INKS

Courier Std (Medium), Frutiger (57 Condensed, 77 Black Condensed)

GB05-A075.eps Cyan Magenta Yellow Black

..._07036_CharitableGivingAd:GBC_07036_GBCFoundationAd.indd

GOW_07036 GBC_07036_GBCFoundationAd.indd 3/20/07 12:50 PM Chris Gayle / Studio Outsource

Bleed 8 in x 3 in

Trim 7.5 in x 2.5 in

Safety 7 in x 2 in

Headline None

Ad Number None

Publication(s) None

Section None

Insertion Date 03/23/2007

Art Director Mark Hickmott

Artist Chris Gayle

Media Contact Andy Gawenda

Production Gawenda & Co.

Acct Mgr. Andrew Zalvin

416.767.7671 9 Edgedale Rd., Toronto, Ontario M4X 1N5

PUB

LICA

TIO

N IN

FO

FLATTENER DETAILSFlattener Style: [High Resolution]Line Art Res: 1200 ppiGradient Resolution: 300 ppiForce Text Outlines: Off

COLOR IMAGE HANDLINGBicubic Downsample to 300 ppi above 450 ppiAuto / Maximum

GRAYSCALE IMAGE HANDLINGBicubic Downsample to 300 ppi above 450 ppiAuto / MaximumCompress Text: OnCrop Image Data: On

LAST PDF EXPORT DETAILS

File: SOS3 Export Time: 3/22/07 6:11 PMStyle Name: [PDF/X-1a:2001] (modified)Compatibility: Acrobat 4.0PDF/X Standard: PDF/X-1a:2001PDF/X Output Intent: Document ProfileColor: , Document Profile

416.415.5000, ext 2054 georgebrown.ca/foundation

George Brown College F O U N D A T I O N

A legacy for academic excellence and student success

A legacy for academic excellence and student success

T:7.5 in

T:2.5 in

Federal Government Supports Giving to Private FoundationsCONTINUED FROM PAGE 6

divestiture.If the reduction does not

occur within the specified time,the foundation will face apenalty of 5% of the value ofthe excess holdings at the end ofthe relevant period. The penalty

is 10% for a second offencewithin five years. Failing toreport the required informa-tion doubles these penalties.

Non-arm’s Length

Non-arm’s length personsfor these purposes will include

any person, or member of arelated group of persons, thatcontrols the foundation, andany person not dealing at arm’slength with such a controllingperson or controlling groupmembers. There is an excep-tion where a person is 18 yearsof age and living separate andapart from the controlling per-son or member of the controlgroup and the Minister deter-mines the person is dealing atarm’s length.

Transitional Rules

To assist private founda-tions operating under the cur-rent legislative regime, transi-tional provisions will allowfoundations to divest excessholdings present on March 18,2007 over a period of five totwenty years. Subject to detail,the excess holdings should bereduced by 20% every five yearsuntil they are eliminated.

The government proposesto deny donors the exemptionfrom tax on gifts of publiclylisted securities to those privatefoundations not able to elimi-nate the excess holdings beforeMarch 18, 2012. It is not obvious why if the transitionrules are appropriate, the

government felt the need to addthis penalty. Hopefully thisaspect of the proposals will beeliminated.

Conclusion

Encouraging philanthropywith the extension of the capitalgains exemption to gifts of pub-lic securities to private founda-tions is desirable. However, it isdisappointing the governmentused this as an opportunity topropose such far reaching andcomplex rules which completelychange the regulatory regimefor existing private founda-tions. The excess business hold-ings rules penalize existing private foundations and addthe compliance burden ofmonitoring the shareholdingsof both the foundation and ofnon-arm’s length persons.

Private foundations holdingmore than 2% of a class ofprivate or public shares shouldseek legal advice immediately.

Susan Manwaring is a partner at Miller ThomsonLLP and Chair of the National Charities and Not ForProfit Industry Group. Her practice is focussed onproviding advice to charities and not for profitsacross Canada. She can be reached at 416.595.8583or [email protected]

Kate Campbell is an associate practicing charity andnon-profit law at Miller Thomson LLP. [email protected] 416-595-8197


Most people assume thatwealth and giving go hand-in-hand, and admittedly givingdoes increase as people climbthe economic ladder. Donorsfrom high-income householdsplay a key role in donating tocharitable organizations andcauses. In fact, according to the Canada Survey of Giving,Volunteering and Participating,2004 by Statistics Canada,individuals with householdincomes of $100,000 or morecontributed 36% of the totalvalue of all donations despiterepresenting only 19% of thetotal population.

But research also suggeststhat it’s not simply the absolutesize of one’s wallet that impactsgiving, but a subjective sense ofoverall financial security. Inother words, it’s not about the

amount of cash in your bankaccount, it’s about whether ornot you believe you have thediscretionary income to give.

Planning Strategies

Fortunately, there are plan-ning strategies that can helpyou fulfill your philanthropicgoals without making you feellike you’re under financialduress. Strategies like donoradvised funds that generallystretch out giving over a multi-year period are a solid option.Likewise, gifts of appreciatedstock have a psychologicalappeal because it’s money thatwas technically never in handin the first place. But of all thestrategies available, life insur-ance is probably the best way tomaximize your giving withoutstressing over affordability.

By now, many of us can rat-tle off the litany of benefits

associated with using lifeinsurance to fund a plannedgift. Like other strategies, it canbe set up in advance, paid onan “installment” plan andyields attractive tax benefits.But life insurance is unique in harnessing the multipliereffect. Using the power ofleverage, life insurance canturn relatively modest contri-butions into an ultimately sub-stantial gift. Premiums that area fraction of the gift’s finalvalue can add up to a consider-able donation without impair-

Make Giving Affordable

Joe Stephen

ing your overall sense of finan-cial well-being.

While the benefits mightsound familiar, few are aware ofa common insurance optionthat can sweeten the pot still further — it’s what’s referred toin the industry as “joint-last-to-die.” Joint-last-to-die means thattwo people share a single lifeinsurance policy and the deathbenefit is paid out only whenboth policyholders have died.

Because the insurance com-pany is insuring two lives, butonly paying out the proceedsupon the second death, joint-last-to-die policies are typicallymuch less expensive than purchasing a policy on oneindividual.

Consider the example inChart 1 (below): a 40 year old

Do you consider yourself wealthy? If you’re like most people, probably not. But asthe old saying goes, “Wealth is not a prerequisite to be a planned giver. Assets are.”And while this may seem like splitting hairs, it’s a subtle but important distinction.

McGill University owes its very existence to a bequest by James McGill in 1821. For generations, McGill’s faculty and students have pushed the boundaries of science and the arts, healed the sick, and played leadership roles in business and politics.

By including McGill in your estate plans you can write the next chapter in a remarkable story that began with a great legacy and continues to change lives and create new opportunities across Canada and around the world.

YOUR BEQUEST CAN MAKE A DIFFERENCE FOR GENERATIONS TO COME

For more information on Bequests and Planned Gifts contact:Colleen Cowman at McGill’s Ontario Regional Of�ceTel: 416-703-9795 or 1-888-488-0499Email: [email protected]

Tessa Barrans and Vanessa Nolet, Class of 2006, Faculty of Education

Visit our website: www.mcgill.ca/alumni-planned


Joint-Last-to-Die Individual Policy Individual PolicyMale and Female Female Only Male Only

Age 40 $33 $44 $54

Age 50 $49 $81 $101

Age 60 $88 $155 $192

Chart 1. Examples of monthly premiums for a $100,000life insurance policy

Source: LifeGuide; permanent life insurance quotes from various companies, standardunderwriting; non-smoker; Joint-Last-to-Die are shown both at same age.


Thanks to breakthrough research funded by the

Canadian Cancer Society, Ethan Mask recovered from

a rare childhood eye cancer, and is now a thriving teenager.

You can help future Ethans beat cancer through a gift to

the Society in your Will. Your bequest will help fund

research on all types of cancers, educate Canadians about

cancer prevention, and support people living with cancer.

I invite you to call me and discuss how...

You can make cancer history.

Stephanie Miller, Personal Giving Coordinator

Canadian Cancer Society, Ontario Division

Telephone: 1 800 268-8874, ext. 2308

E-mail: [email protected]

Help the next Ethan beat cancer.

CCS_LegacyAd_7.5x5fa 3/27/07 3:51 PM Page 1

healthy, husband and wifewishing to fund a $100,000 giftusing life insurance would save31% in monthly premiums byopting for a joint-last-to-diestructure as compared to a pol-icy on a 40 year old male alone.That figure jumps to 54% insavings for a couple age 60 ascompared to a policy on a 60year old male.

Joint-last-to-die policiesare particularly effective in set-tling an estate after the deathof the second spouse — espe-cially if there is a charitable giftinvolved. Charitable dona-tions of the face amount (inthis case, $100,000) are 100%deductible against the income

reported in the final tax returnof the deceased. Provided thecharity is the designated bene-ficiary, the donation can thenbe used to offset taxable gainsfrom cottages, securities orshares in a private businessduring the estate settlementprocess.

For example, many Canad-ians do not realize that theirRRSP or RRIF assets are fullytaxable as income in the yearthat the surviving spouse dies.At a 46% marginal tax rate, a$200,000 RRIF balance willpay only $108,000 to the estateof the surviving spouse.The $100,000 joint-last-to-dieinsurance proceeds can be leftto a charity and still reduce thetax due in this example by

Joe Stephen is life and living benefits special-ist for Stephen Financial Services Inc. withexpertise in using insurance as a strategic partof an overall tax, estate or charitable giftplan. He can be reached at [email protected]

50%. See Chart 2 above.So you see, wealth is not a

precondition for making aplanned gift. Instead, it’s thefeeling that you can afford togive without impairing youroverall worth or adverselyaffecting the financial securityof your loved ones. In thisregard, joint-last-to-die lifeinsurance is a win-win strategy:

you can leave a substantial legacy to the charity or cause ofyour choice while still beingable to sleep at night.

Make Giving AffordableCONTINUED FROM PAGE 17

Chart 2. Example of taxes owed on a $200,000 RRIF with andwithout a charitable gift with insurance

Without Charitable Charitable Gift Gifting or Insurance With Insurance

RRIF Balance $200,000 $200,000

Less Charitable Gift $0 $100,000

Taxable Amount $200,000 $100,000

Taxes Owed @ 46% MTR $92,000 $46,000


Many are motivated by theenormity of global problemssuch as poverty, AIDS, educa-tion, or emergency relief. Othersare impressed with the hugeeffect that their donation canhave in a developing country –often many times greater thanthe same funds used at home.Others have lived abroad andhave a substantial attachment tocauses and communities outsideof Canada.

There are many opportuni-ties to make a gift that will havean impact outside of Canada,including bequests, gifts ofmarketable securities and othercurrent or deferred giving vehi-cles. There are 82,000 registeredCanadian charities and of thatalmost 12,000 currently conductoperations outside of Canada.Each charity has its own inter-ests, values, perspective, level of experience, philosophies,expense ratios, and willingnessto accept risk. If you are making

Mark Blumberg a sizable gift, it is worthwhile todo your ‘due diligence’ to findthe right charity and to struc-ture the gift appropriately. Aswell, one can also encourage acharity that is not operatingabroad to start doing so or to setup a new charity to operateabroad.

If you want to involve aCanadian charity in doing thework, and obtain a Canadian taxreceipt, you will want to considerthe rules and guidelines thatapply to charities operatingabroad. The Canada RevenueAgency (CRA) has preparedsome useful publications onCanadian charities operatingabroad and the restrictionsplaced on them, the mostimportant one of which isRegistered Charities: OperatingOutside Canada (RC4106).

Perhaps the biggest miscon-ception held by many is that adonor in Canada can make adonation or gift to a Canadiancharity and that charity can thengift the funds to a foreign

non-governmental organization(NGO) or foreign charity. TheCanadian Income Tax Act allowscharities to conduct their chari-table purposes only by: 1) theirown activities (at home orabroad) or 2) to give monies toanother "qualified donee" (usu-ally a Canadian charity but alsothe United Nations and a smallnumber of foreign entities). ACanadian charity cannot giftmoney to a foreign NGO or for-eign charity unless they are aqualified donee, and almostnone are.

A Canadian charity can haveemployees outside of Canadabut can only transfer funds to a foreign charity or NGO in alimited number of circum-stances. These would include theCanadian charity conducting itsown activities abroad, includingby written agency, joint venture,cooperative partnership agree-ment between the charity and aforeign agent, joint venturer orpartner who carries out theproject on behalf of theCanadian charity. A Canadiancharity can also use a privatecontractor by written agreementto, for example, drill a well.

If a bequest is used theyshould always be handled care-fully including ensuring that

there is clarity of the gift, validi-ty of the Will, capacity of thedonor, that the correct name ofthe organization is used and thatit is, in fact, a charity. There alsoneeds to be careful considera-tion of any restrictions or condi-tions in the Will. Any legallybinding restrictions or condi-tions in a bequest should care-fully consider the position andlegal responsibilities of the char-ity that must either obey suchdirections or refuse the gift.Poorly thought out restrictionsalso can impose enormousadministrative costs and ineffi-ciencies on the charity.

The rules governing Canadiancharities operating abroad,while somewhat complicated,are not too onerous, and it isimportant that they and theirdonors understand the rules andcomply with them. Otherwisethe charity could face the possi-bility of fines and the revocationof its charitable status. Cana-dians who want to supportcharitable work carried on out-side of Canada should do socarefully and strategically.

Increasingly, Canadians are interested in using their donations to achieve global impact.

Planned Giving Internationally

Mark Blumberg of Blumberg Segal LLP hasassisted many individuals and charities inter-ested in operating outside of Canada and canbe reached at [email protected].


would work to address environ-mental problems and mattersof children’s health and well-being. These issues are impor-

tant to you because you love totravel and in the course of yourtravels, you’ve observed theimpact of society’s disregardfor the environment. You’vealso seen how poverty and lack

CONTINUED FROM PAGE 7 of education can result in ableak existence for children ofdeveloping countries. You enjoyspending time with family andfriends, travelling (meetingnew people and seeing newplaces), writing, public speak-ing, and teaching, which allowsyou to both impart knowledgeand to learn new things fromyour students.

How can your personalvalues shape your giving plan?If you were ambitious andcould afford the time andmoney to do so, you could volunteer your services to ahumanitarian group withoverseas projects to buildschools for children in impov-erished areas. You could electto go for a finite or an extendedperiod. Depending on thetime that you had available,you could help to build aschool (perhaps recruitingfamily and friends, too) or volunteer to teach after aschool is built. By educating thechildren (and their families),environmentally-sound alter-natives could be developed forgenerating income in place oflogging nearby hardwood

forests. After you returnhome, you could increase theawareness of the organiza-tion’s projects by writing andspeaking to donors and other interested parties.

How have your personalvalues been reflected in yourdonation of time and/ormoney? You satisfied your lovefor travelling. If you were ableto convince family and friendsto join you, you shared aunique experience with them.You used your teaching skillsto benefit children, their fami-lies and their environment.You used your writing andspeaking abilities to encourageothers to participate.

Not everyone can under-take a project of such magni-tude; however, there are multi-tudes of worthy causes close tohome. If you examine yourpersonal values, you can findmeaningful ways to make adifference.

Aligning Personal Values with Giving Objectives

Cynthia Kett, CA, CGA, RFP, CFP is Principal of Stewart & Kett Financial Advisors Inc.,an advice-only financial planning, accountingand tax services firm in Toronto


Planned giving today is abeneficial component to a soundfinancial plan. Recent statisticsreport that 5.7 million Canadianscontributed 6.9 billion dollars tocharitable organizations last yearalone.

Many individuals may notrealize the impact of deferredtaxes that will erode their estateon death. Aside from a tax freespousal rollover, all assets willbecome a deemed disposition ondeath where the CanadianRevenue Agency (CRA) willclaim all final income taxesowing. To name a few taxableassets:

• RRSPs/RRIFs• Stocks• Mutual Fund Portfolios• Capital Property• Holding Companies• Shares in a Private

Corporation

With some simple planning acreative solution can be found.

Current maximum tax reliefavailable: 75% of annual netincome and 100% of net incomein the year of death and preced-ing year.

Beneficiary Designation

If an individual designates a charity as beneficiary of theirRRSPs and RRIFs, they can flowdirectly to the named charitytherefore by-passing probate and legal fees. Any percentagecan be designated allowing multiple beneficiaries of family and/or charity. Non-registeredinvestment products at life insur-ance companies (and there aremany) can accommodate a designated beneficiary whichwould flow directly to charity,also by-passing probate and legalfees. No codicils or new Willdrafting is required.

Donor Advised Funds

Donor advised funds allow adonor to reap many of the benefitsof a private foundation withoutthe complexity. They offer a wide choice of investments andthe flexibility to recommend thecharities that will benefit from afund. The donor may contributegifts throughout their lifetime aswell as through their estate as partof their legacy.

Charitable tax receipts areissued for each donation to adonor advised fund.

Life Insurance

There are many ways a donorcan make a gift using life insur-ance:

Donate an existing life insur-ance contract to your favouritecharity. A tax receipt is issuedequivalent to the cash surrendervalue of the contract. (This trans-fer of ownership is considered adeemed disposition).

Name a charity as the pri-mary beneficiary of a personallyowned life insurance policy. A taxreceipt equivalent to the deathbenefit will be issued to the estateupon the passing of the insured.

Purchase a new insurancepolicy making the charity theowner and beneficiary. Theinsured will receive an annual taxreceipt for each premium paid.No tax receipt is issued to the estate upon death. This is abrilliant way of creating a legacyas the cost of insurance is a fraction of the future realized gift.

Charitable Gift Annuities

Donate a sum of money tocharity and the remainder purchases an irrevocable annuity that will pay continued incometo the donor for life.

A Summary of Charitable Giving OptionsThe “Late in Life” community in Canada is experiencing a phenomenon. A strong and vibrantgroup of Canadian philanthropists are now choosingto self-direct their income taxes. One of the most popular choices is to leave one’s final income tax billto their favourite charity.

Charitable Remainder Trusts (CRTs)

A CRT is an irrevocable, inter-vivos (living) trust established bya donor making a contribution.The donor would receive incomefrom the trust during their life-time and the charitable organiza-tion would be the beneficiary ofthe remainder of the trust assets.

Publicly Listed Securities

Donors can now gift appreci-ated stock or mutual funds andnot incur a taxable deemed dispo-sition; no capital gain taxes areincurred on the transfer of own-ership. Donation receipts areissued for the fair market value ofthe securities.

For many of us, we feel grate-ful and blessed for the fruits oflife. Giving can create a happysoul. Service can create a happycommunity and better environ-ment.

What legacy would you like toleave?

Whitney Hammond is the founder of Sovereign WealthManagement Inc. in Burlington. She has been successful in helping charitable organizationsto strengthen their fund development capacity. Planned Giving, Tax + Estate Planning, and BusinessSuccession Planning are specialties in her practice.

Whitney Hammond, CFP


CONTINUED FROM PAGE 10

The Changing Nature of Philanthropy

Your legacy will live on in all of us when you include the Heart and Stroke

Foundation of Ontario in your Will.

Her heart was the first thing we listened for when she was born.And it echoes our hopes for her future.

Call Mary Goodfellow at 1-800-205-4438 ext. 2, or email [email protected] to learn more.

SEE WHAT HAPPENS WHEN YOU PUT YOUR HEART INTO IT.™

health causes had been languish-ing, as Dr. Jim Kim, former HIVdirector at the World HealthOrganization puts it, “The GatesFoundation has made global

health cool.”Though high profile donors

such as Gates and Buffett makethe headlines, more and morenon-billionaires are also settingup their own donor advisedfunds, as they have become more

Brad Offman is Vice President, StrategicPhilanthropy at Mackenzie FinancialCorporation and Managing Director of theMackenzie Charitable Giving Fund.

Brad is past Chair of the Leave A Legacy Programfor the Greater Toronto Area and served on theExecutive of the Toronto Roundtable of theCanadian Association of Gift Planners.

readily available and affordable.Donor advised funds are cur-rently offered by a range oforganizations in Canada, fromcharities such as the TorontoCommunity Foundation andSickKids Foundation to financialinstitutions like TD Private GivingFoundation and MackenzieFinancial Corporation.

Demographic Trends

The potential for philanthropyis immense. In Canada, between$15 and $20 trillion is expected to shift from parents to their children between now and themiddle of the century. Some portion will make its way intophilanthropic aims, particularlyas the recipients begin the estateplanning process. The implica-tions for the charitable giving sector are significant, as the bulkof these recipients are babyboomers that have quite differentvalues from those of their parents.With this demographic, a newculture of giving is developing.

Doing It Their Way

As they have done in somany other areas of their lives,the baby boom generation ishaving a significant impact on

the world of charitable giving.Not content to simply write acheque and move on, donorsexpect transparency andaccountability; they also want tobe involved in how their dona-tions are spent. Their focus is onsolving specific problems, notfunding services, and they wantmeasurable results. To achievetheir aims, many of these youngerphilanthropists are collabo-rating with existing charities.Conversely, many charities arerevisiting the way they operate inorder to attract their share ofthese dollars.

Conclusion

Philanthropy in Canada willexperience some transforma-tional shifts over the nextdecade. Charities will need toposition themselves in order tothrive and survive and Canadiandonors must continue to educatethemselves in order to developcharitable giving strategies thatmaximize philanthropic impact.

www.givingtowestern.uwo.ca/legacies

The O’Hagans have made a bequest in memory of Jeff’s brother, Craig (BESc’96), who died at the age of 30. Their gift will supplement the Craig O’Hagan Memorial Award in the Faculty of Engineering.

Honour your memories at Western.

To learn more, contact the Gift Planning Office at 519-661-2199, 1-800-258-6896 or [email protected]

Memories inspired Westernalumni Jeff and Tara O’Hagan to

create a legacy for tomorrow

Memories inspired Westernalumni Jeff and Tara O’Hagan to

create a legacy for tomorrow


dations. This year’s budgetextended this exemption undercertain circumstances to gifts of publicly listed securities toprivate foundations. This is agreat incentive for owners of allpublicly listed securities, butwhen you take this incentive fordonations of publicly listedshares and couple it with the tax incentives available to theinvestor of a flow-through sharethe results are especially pronounced.

A Note of Caution

Companies issuing flow-through shares are often smalljunior resource companies withminimal liquidity and are poten-tially volatile. The shares areoften subject to a hold period(usually two years) and may notretain their original value overthe period. Charities should beparticularly careful to ensurethey will be able to find a marketfor the gifted shares. If thedonated flow-through shares arenot readily marketable at thetime of the donation, the valuefor receipting purposes will like-ly be affected. It is important forthe investor/donor and the char-ity to work together to ensurethe gift of flow-through shares isa win-win for both parties. Bothshould obtain legal and taxadvice regarding the transaction.

Sophisticated investors willbe familiar with the tax incen-tives provided for Canadianswilling to invest in the domesticresource industry with a view tofostering exploration in Canada.Canadian mining and resourcecompanies that issue “flow-through shares” are permitted torenounce their deductions forexploration costs and flow theseexpenses out to the shareholders.The shareholders in turn candeduct the expenses which arerenounced to them subject to thelimit that they cannot deductmore than the amount they orig-inally paid for the shares. Theseresource expenses are generallyfully deductible against otherincome. This “flow-through ofexpenses” makes the acquisitionof an otherwise risky investmentmore attractive to an investor.The deductions claimed reducethe investor’s cost base of theflow-through share. Assumingthe maximum deduction isclaimed, the cost of the share tothe investor is nil.

Once the exploration is complete, the flow-throughshares are typically convertedinto other securities of the issueror units of a mutual fund (on atax deferred basis). Dependingon the success of the investment,a significant taxable capital gainmay accrue to the investor whenthe securities are ultimately soldor transferred.

Last year’s Federal Budgetexempted from tax the gainsrealized on the donation of pub-licly listed securities to charitableorganizations and public foun-

Donations of Flow-through SharesRachel Blumenfeld andSusan Manwaring

Susan Manwaring is a partner at MillerThomson LLP and Chair of the NationalCharities and Not For Profit Industry Group. In her practice she provides advice to charitiesand not for profits across Canada. She can bereached at 416.595.8583 [email protected].

Rachel Blumenfeld, a partner at MillerThomson LLP, is a member of the firm’s PrivateCient Services group and practices in the areasof tax and estate planning and charities andnot-for-profit law. She can be reached at416.596.2105 [email protected].

An Example of Gifting Flow-through Shares

An investor purchases $10,000

in flow-through shares of a publicly

listed issuer. The issuer agrees to

renounce the expenses to the

investor and the investor receives

$10,000 worth of deductions

(assuming a marginal tax rate of

46%, the investor is able to save

about $4,600 in tax; the invest-

ment has thereby essentially cost

her$5,400). If the investor sells the

flow-through shares once they are

marketable, assuming the value

remains at $10,000, because her

cost has been reduced to zero, she

will pay tax on the capital gain of

approximately $10,000.

If the investor donates the

flow-through shares to a registered

charity (provided the shares are

publicly traded at the time of the

donation), the tax on the capital

gain is eliminated. Moreover, she

receives a tax receipt for the dona-

tion which can be used to shelter

other income from tax. Assuming

the donation tax credit is based on

the current value of $10,000, which

provides a tax savings of $4,600, the

investor’s actual cost of the donation

is only $800 ($5,400 - $4,600).

The results of such gifts can be

overwhelmingly positive for both

investors and charities.

L I F E I S I N T H E T H I N G S Y O U G I V ETo create a meaningful legacy that includes Mount Sinai Hospital,

please call or visit:

Yolanda Bronstein416-586-4800 ext. 2963

Mount Sinai Hospital Foundation of Toronto1001-522 University Avenue, Toronto

www.mtsinai.on.ca/foundation


Your legacy will help others to experience the daily miracles that happen at St. Michael’s

Hospital. Please include us in your will.

CompassionInnovative Patient CareResearch DiscoveriesEducation

ST. MICHAEL’S HOSPITAL FOUNDATION

CYNTHIA COLLANTES, PLANNED GIVING OFFICER

30 BOND STREET, TORONTO, ON M5B 1W8Tel: (416)864-5879

Advancing care. Every day.

for their gifts. They also manage all thegrant making and administration associat-ed with your charitable gift.

An innovative approach has beendeveloped by BMO with their “SupportingYour Community” program. BMO hasformed a national alliance with theCommunity Foundations of Canada, thenational organization of over 145 commu-nity foundations. This offers the best ofboth worlds with BMO providing fundmanagement while the community foun-dation provides donor support in grant-making and administration - a great com-bination.

Investment counseling firms andmutual fund companies are also gettinginto the business of donor advised funds.For example, the CGOV Foundation, creat-ed by Cranston, Gaskin, O’Reilly andVernon Investment Counsel, allows thepartners and associates to contribute a per-centage of their profits each year to theFoundation. Mackenzie Financial has cre-ated the Mackenzie Charitable Giving

Fund. Clients may make donations to theFund and their endowment can be invest-ed in any one of eight balanced mutualfunds professionally managed byMackenzie Financial Corporation.Donors then recommend grants to theirfavourite charities from the income gener-ated from their investments.

Even hospitals are creating donoradvised funds, illustrated by SickKidsCharitable Giving Fund. As the first hos-pital charity in Canada to offer donoradvised funds, this program gives donorsthe opportunity to create a named fundthat supports The Hospital for SickChildren as well as providing donors withthe option of supporting other charitiesacross Canada. A donor advised fund atSickKids gives flexibility to those wantingto support the hospital as well as otherCanadian charities in a cost-effective, effi-cient manner.

Depending on the organization thathelps you establish your donor advisedfund, there is a minimum level required tostart a fund. These range from as low as$5,000 to a high of $250,000. While quick

Donor Advised FundsCONTINUED FROM PAGE 13

and efficient, there are fees that start from0.75% of the fixed asset per annum. Someorganizations charge a flat rate, while oth-ers charge an investment management feeas well as an administrative fee for grant-making. There can be other fees as well, somake sure you know what you are buyinginto. Before you choose your donoradvised vehicle, do some research into thesuccess of the organization’s donoradvised funds, the return on investmentand the satisfaction of other donors inworking with a particular organization. Itis your gift and you want to make sure it isinvested and managed wisely.

Donor advised funds are a great alter-native to creating your own private foun-dation and some can be set up in as littleas twenty-four hours. Easy, quick, smart!

Terry Smith is President, Philanthropic Partnerships Inc.providing strategic support to donors and corporations intheir philanthropic giving. www.philanthropic.ca

Be Part of OurNext Discovery.

For more information please contact:Paul GrossmanAssociate Director, Major & Planned GiftsT: 416-340-4854 E: [email protected]


What does a lawyer add tothe equation?

1) Clarity The lawyer ensuresthat the Will is clearly drafted toavoid subsequent confusion orconflict including using properbequest clauses that will be ofbenefit to the executors of theestate and the charity.

2) Validity The lawyer ensures

that the Will is properly executedin accordance with the provin-cial requirements which arequite complicated. If theseprovincial requirements are notstrictly followed, the Will couldbe held to be invalid along withthe bequest.

3) Capacity The lawyer can bea witness as to the testamentarycapacity of the deceased at thetime of making the Will. If the

Will is set aside then the charitymay not receive the bequestunless it was provided in a previ-ous Will.

4) Correct Name of Charity Alawyer would conduct corporatesearches on the charity to ensurethe correct name is used andthat it is clear which charity isreceiving the bequest. This willavoid a conflict later betweensimilarly named charities.

5) Charitable Status A lawyercan ensure that the “charity” iscurrently registered with theCanada Revenue Agency. Thereare many worthy non-profitorganizations that are not regis-tered charities and a gift to themby an individual will not resultin a tax receipt.

6) Acceptability of Bequest orRestrictions Many conditionsor restrictions are placed inbequests by well meaningdonors without fully under-standing the effect of such con-ditions or restrictions. A lawyercan make inquiries to a charitywith respect to whether the pro-posed bequest is within theobjects of the charity to ensurethat the legacy is not ultra vires(outside) the objects of the char-ity. A lawyer can discuss with thecharity whether any restrictionscontemplated in the legacy areappropriate and whether the giftwould be accepted. Many chari-ties have gift acceptance policies,some of which limit who cangive to the charity, what restric-

tions are acceptable and thetypes of gifts the charity is prepared to accept. If thought isgiven to this issue ahead of timea donor’s intentions can berespected and alternatives canbe found.

7) Avoiding the "DisappearingWill" Having a lawyer retain aWill in a "Will’s safe", or at leasta copy in the lawyer's file, willreduce the likelihood that theWill just “disappears” whenother beneficiaries wouldreceive a greater benefit if therewere no Will and one dies“intestate”. Another way toensure that your wishes arerespected is to inform the chari-ty of the gift and perhaps evenprovide the charity with a copyof your Will.

8) Other Planned Giving IdeasThere are times when a bequestmay not be the most appropri-ate or tax effective method ofmaking a gift. A major gift dur-ing the lifetime of the donor oranother type of planned giftmay be more suited to thedonor's individual situation.

9) Estate Planning A lawyer canassist with many aspects ofestate planning including Wills,powers of attorney for property,powers of attorney for personalcare, trusts and other matters.A legacy left in a Will should beproperly integrated with adonor’s estate plan.

If you have any questionsabout including a bequest inyour Will, please contact yourlawyer.

Avoid Common Legal ProblemsWhen Making BequestsLeaving a bequest to a charity in your Will can be an excellent way to support a cause you care for and create a lasting legacy. Unfortunately, if a Will is not written by a qualified lawyer, there may be problems and expenses for the charity. In some cases, it can result in the gift being declined. Donors shouldobtain legal advice when making a bequest to a charity.

Mark Blumberg

Mark Blumberg of Blumberg Segal LLP hasassisted many individuals and charities inter-ested in operating outside of Canada and canbe reached at [email protected].


Age Limit for Maturing RPPs and RRSPs

Under the current rules, anRRSP and an RPP must be converted to a RegisteredRetirement Income Fund(“RRIF”) in the year in which anindividual attains the age of 69years. The budget proposes toincrease this age to 71 years. Inother words, under the currentproposals, an RRSP and an RPPmust be converted by the end ofthe year in which an individualreaches the age of 71 years.Under the proposals, if an indi-vidual attains the age of 70 or 71in 2007, that individual need notmake a withdrawal from his or

her RRIF in 2007. Similarly, if anindividual attains the age of 71years in 2008, he or she need notmake a withdrawal from his orher RRIF. The changes permitan individual to contribute totheir RRSP until the end of theyear in which the individualturns 71.

RRSP Qualified Investments

Under the current rules,RRSPs and other registered plansare restricted to investing in“qualified investments” that arelisted in the Income Tax Act.The 2007 Federal Budgetexpands this list to include debtobligations that are a part of aminimum $25 million issuanceand that have an investmentgrade rating from a recognized

Estate and Tax Planning with the 2007 Federal BudgetCONTINUED FROM PAGE 8 wave and tidal energy).

Conversely, the budget also pro-poses to phase out certainfavourable CCA deductions forassets used in an oil sands project.

International TaxDevelopments

The 2007 Federal Budget not only focused on domestictaxing issues but also addressedmany international tax issues.Included in these measures wasthe restriction on Canadian resi-dent taxpayers to deduct theinterest cost on money borrowedto invest in a foreign affiliatewhere the income of that foreignaffiliate is not subject to tax inCanada. This will have a directimpact on many cross bordertransactions.

Under the current rules thewithholding rate on interest paidto a non-resident of Canada is25%. If the payment of interestis made to a resident of theUnited States the withholdingtax is reduced to 10%. Thebudget proposes to eliminatewithholding tax on interest pay-ments made to a non-resident ofCanada if certain conditions aremet.

The budget also proposesthat limited liability companiesin the United States will be eligi-ble for benefits under theCanada – United States IncomeTax Convention. In the past,limited liability companies havebeen denied treaty protection.

credit rating agency.

Donation of Medicines for the Developing World

Under the current rules,where a Canadian corporationsuch as a pharmaceutical com-pany donates its inventory to aregistered charity, it receives a taxdeduction equal to the fair mar-ket value of the property donat-ed. However, it is also subject toan income inclusion for thesame amount. The budget pro-poses to provide an incentive tocorporations that donate medi-cines from inventory by provid-ing an additional deductionequal to the lesser of:(a) 50% of the excess of fair

market value over cost; and(b) the cost of the donated

medicine;upon a donation to a registeredCanadian charity that receivesCanadian International Develop-ment Agency (CIDA) funding.The donation must be used out-side of Canada.

Increased Capital CostAllowance for Certain

Industries

The capital cost allowance(CCA) system under the IncomeTax Act allows businesses towrite off depreciating assets atcertain prescribed rates. In orderto boost the manufacturing sec-tor in Canada, the budget pro-poses to increase the CCA ratefor manufacturing and process-ing machinery equipment from30% to a 50% straight line rate.This will mean tax savings formanufacturing corporations.

The budget also proposes toexpand the list of certain “greentechnologies” that qualify for afavourable 50% CCA rate (i.e.,

James A. Hutchinson and Amanda J. Stacey are members of the Tax, Estates and Trusts Group ofMiller Thomson LLP. James is a partner practicingprimarily in the area of corporate tax. Amanda is anassociate practicing in the areas of personal tax,estates, and charities.

James can be reached by phone at 416-597-4381, or bye-mail at [email protected].

Amanda can be reached by phone at 416-595-8169, orby e-mail at [email protected].


Celebrating a CanadianPhilanthropic Milestone

On May 2, 2006, the FederalGovernment eliminated capitalgains tax for donations of appreci-ated securities to charities. As wemark the first anniversary of thishistoric decision, we also have anopportunity to reflect on itsimportance to our society.

I believe that, in future years,we will recognize this date as themoment when Canada’s philan-thropic landscape was trans-formed. Previously, Canadians,who are generous and communi-ty-minded by nature, possessed alimited menu of giving options.With the elimination of capitalgains tax, Canadians have the

opportunity to see their wealth in anew way, and to think in a morestrategic manner about their char-itable decisions.

It helped that the Federal Government acted during a periodof robust economic growth. Thisconvergence of growing wealthand expanding philanthropicoptions has created short- andlong-term ripple effects across thecountry. In the short term, charita-ble organizations have experienceda spike in gifts of securities, whichwill help us all to expand our vitalprograms and plan for futuredevelopment. Over the long term, Ipredict that more Canadians willbegin to understand that theircharitable giving need not be a

momentary impulse, but caninstead be a significant componentof their financial portfolios andplanning.

As Canadians are given newphilanthropic options and advan-tages, we will begin to see theimpact of our charitable contribu-tions in increasingly sophisticatedways. Together, we will begin tofully understand the role that ourgiving can play over our entire lifecourse, as well as the role that ourphilanthropy can play in creatingsustainable solutions in education,social services, the arts, health, andscientific discovery.

Michael O’Mahoney

Michael W. O’Mahoney is President, SickKidsFoundation. www.sickkidsfoundation.com

T O R O N T O V A N C O U V E R W H I T E H O R S E C A L G A R Y E D M O N T O N L O N D O N K I T C H E N E R - W A T E R L O O G U E L P H M A R K H A M M O N T R É A L

For a complimentary subscription to our Charities & Not-for-Profit newsletter or our Private Client Servicesnewsletter Wealth Matters, please e-mail:

[email protected]

WWWWWW..MMIILLLLEERRTTHHOOMMSSOONN..CCOOMM

ONE OF CANADA’S LEADING LAWFIRMS, OFFERING INFORMEDAND INNOVATIVE ADVICE ON ALLASPECTS OF ESTATE PLANNINGAND CHARITIES LAW, INCLUDING:• WILLS AND TRUSTS

• GIFT PLANNING

• STRUCTURING ENDOWMENTS, PRIVATEFOUNDATIONS AND OTHER CHARITIES

• PERSONAL TAX PLANNING

• TRUSTS AND ESTATES ADMINISTRATIONAND LITIGATION

If not now...When will it matter most?

G I V E A G I F T T H AT W I L L C H A N G E L I V E S .I T M AY B E T H E M O S T I M P O RTA N T G I F T Y O U E V E R M A K E .

As one of Canada’s leading hospitals, Sunnybrook is inventing the future of health care today – by providing world-class patient care, pioneering new discoveries, and nurturing tomorrow’s medical leaders. We need your support to deliver our best.

Treating the gravely i l l , the seriously injured or those at h ighest r isk means we must respond quickly and compassionately. Lives are at stake, and every moment counts.

And every gift counts at Sunnybrook. Including us in your estate planning ensures that your commi tment to Sunnybrook cont inues . The promise of your gift today enables us to plan better for tomorrow.

Talk to your family. Talk to your advisor. Talk to us.

You can be sure whatever you give will help save l ives, when it matters most.

Telephone: 1-866-696-2008 ext. 5877Email: [email protected]: www.sunnybrookfoundation.caCharitable Business Number: 899 209 118 RR0001

Documents

Charitable Giving€¦ · Charitable GivingYOUR GUIDE TO & ESTATE PLANNING Charitable GivingYOUR GUIDE TO For 88 years, Baycrest has been giving the best possible care to seniors