Handouts for the Planned Giving for Small Shops: It CAN Be Done! during AFP-Toronto congress on November 28-30, 2011.

1. 1
Planned Giving in a Small Shop: It CAN be Done!
AFP-Toronto Congress
November 28-30, 2011
Let’s begin with Charity Village’s planned giving self-test. Please take a couple of minutes to
answer these questions.
1. The definition of planned giving is making a gift with the right asset, in the right way, at the
right time for the right purpose.
True
False
2. From the list below, pick out the correct statement about planned giving.
Tax and financial benefits are the main motivating factors in planned gifts
A planned gift is always made later - after a person’s death
The most common type of planned gift is a bequest by will
3. When assessing your readiness to start a planned giving program, you should look at your
current donor base. Before starting your planned giving program, a rule of thumb is that you
need a minimum of:
At least 100 donors who have given to you every year for the past three years, and at
least 1000 donors over the age of 50
Experience soliciting major gifts
If not a planned giving staff person, then at least a lawyer and an accountant on your
board
A minimum of five years with an active fundraising program
4. You should set realistic goals for each phase of your new planned giving program. Which one
of the following goals would not make sense for year one.
Create your case for support
Develop your basic policies and procedures
Solicit the board to give their own planned gifts
Raise $100,000 in new planned gifts
Develop and begin to implement your marketing plan
5. When it comes to planned giving, it’s important that your ‘behind the scenes’ administrative
systems are in order. Pick out the most important element that should be in place.
Maintain a tickler system allowing you to follow up with your donors in a timely and
appropriate way
Ensure all gifts can be receipted and acknowledged promptly
Call members of your planned giving advisory committee on a monthly basis
Have your planned giving policies and procedures reviewed by a lawyer
Ligia Peña, M.Sc., CFRE
Diversa Consultants
Tel.: 514.699.6046 ; ligia@diversa.ca ; @lpdiversa

2. 2
6. Answer true or false to this statement:
Your organization might consider partnering with a local community foundation so you can have
en endowment fund. All community foundations share these features:
- They are public charitable organizations
- They hold permanent endowment funds
- They support community organization within a defined geographic area
- Can legally hold endowment funds for other registered charities
True
False
What is planned giving, gift planning or legacy giving?
The CAGP-ACPDP definition is as follows:
Gift planning is the donor-centered process of planning charitable gifts, whether current or future
gifts, that meets philanthropic goals and balances personal, family, and tax considerations.
Objective
To maximize the financial, tax and philanthropic benefits of the gift.
Characteristics
• Mostly future gifts
• From assets vs. revenue
• Highly personal gift
• Donor-driven (timing and type)
• Revocable
Time and vehicle determines the gift, not the tax savings = IMPORTANT TO UNDERSTAND!!
Some key figures
Importance facts about planned gifts:
• Wealth transfer over next 30 years estimated at $14 to $44 billion
• 77% of wealth held by persons aged 50+
• Not just for the wealthy
Ligia Peña, M.Sc., CFRE
Diversa Consutlants
Tel.: 514.699.6046 ; ligia@diversa.ca ; @lpdiversa

3. 3
The cause 1%
2% 20% 77%
Your personal values 2%4% 29% 65%
The charitable organization 2% 5% 26% 67%
Tax savings 7% 16% 47% 29%
The timing of the charitable request 16% 29% 41% 14%
Personal control or advisory role in use of donation 26% 33% 28% 14%
Personal/family legacy for the future 31% 32% 22% 15%
Long-term giving through a private foundation 41% 40% 15% 4%
Public recognition 60% 29% 9% 2%
Not at all important Not too important Somewhat important
Very important The timing of the charitable request Personal control over, or an advisory role in the use of the donation
Personal/family legacy for the future Long-term giving through a private foundation Public recognition
Source: Scotia Private Client Group survey, June 2006.
There have been over 20 new incentives in the Income Tax Act to encourage gifts of assets
from individuals since 1996, such as:
• Contribution limit for lifetime gifts = 75% income
• Contribution limit at death = 100% of income
• Elimination of capital gains on gifts of publicly-listed securities, employee stock options,
ecologically sensitive options
• Direct designation of RRSP/RRIF assets and life-insurance benefits
Statistics Canada came out with a study on the ageing population:
• The number of people 65 years old and over went from 2.4 million in 1981 to 4.2 million in
2005.
• They estimated this would increase to 4.3 million in 2006 and 9.8 million in 2026.
What are the different planned giving vehicles out there?
These are presented in order to importance. See chart of planned giving vehicles with benefits
Bequests
A bequest is a gift of real or personal property under a will which is directed to a specific
beneficiary or beneficiaries.
Ligia Peña, M.Sc., CFRE
Diversa Consultants
Tel.: 514.699.6046 ; ligia@diversa.ca ; @lpdiversa

4. 4
There are three types of bequests with sample wording:
1. Specific bequest or legacy
“My Trustee/Liquidator/Executor shall pay or transfer (description of the property) to XYZ Charity
(proper legal name and charitable number) the sum of (amount).”
2. Residual bequest
"My Trustee/Liquidator/Executor shall pay or transfer to XYZ Charity (proper legal name and
charitable number) all (or stated percentage) of the rest, residue, and remainder of my estate."
3. Contingent bequest
"If (name/s of primary beneficiary/ies) do/es not survive me, or shall die within ninety (90) days
from the date of my death, or as a result of a common disaster, then my Trustee/Liquidator/
Executor shall pay or transfer to XYZ Charity (proper legal name and charitable number)
(describe amount of cash, property, or percentage of residual estate)."
Key to success:
• Sample bequest language - make it very accessible
• Policies and procedures
• Tracking confirmed bequests
• Valuation of bequest expectancies and reports to the Board
• Marketing plan with implementation
• Recognition program
• Integrated strategy with development colleagues
Life-insurance
Not all life insurance plans are created equal. There are different products out there.
Term insurance: covers a specific period and pays death benefit during that period. No cash
value is built up.
Term to 100: it’s a low cost life insurance policy with no cash value, premiums remain constant
for life and is paid-up at 100.
Whole life insurance: policy with death benefit and cash value.
Universal life insurance: it’s a combination of term insurance or term to 100 insurance and a tax-
deferred investment account.
Critical illness insurance: pays face amount if insured develops one or more of named illnesses
and is paid out during lifetime, not after death.
1. Transfer the ownership of a paid-up policy
It is the equivalent of an outright cash gift. The charity may retain the policy and eventually
collect the death benefit, OR cash in the policy. The charity will need to have the policy
evaluated to establish the fair market value of the cash surrender value (it costs approximately
$2,500 for an actuary to do this).
Ligia Peña, M.Sc., CFRE
Diversa Consutlants
Tel.: 514.699.6046 ; ligia@diversa.ca ; @lpdiversa

5. 5
Prospects:
• Individuals who purchased policies years ago to provide family protection when their
children were small
• Policy has out-lived original purpose
• Becomes an idle, but valuable asset
2. Existing policy with premiums owing
From the moment the donor gives the policy to the charity, he will get a tax receipt for the fair
market value/cash surrender value upon the transfer and for subsequent premium payments.
Assuming the donor continues to pay the premiums, the cash value will increase each year and
the charity will eventually collect the death benefit.
Prospects:
• Individuals with sufficient insurance for family
• May be the best way to give while preserving other assets for the family
3. Donation of a new policy
Donor designates the charity as owner and beneficiary of a new policy. It is a significant gift for
small outlay of funds. Donor receives a tax receipt in the amount of the premiums (get proof of
payment from insurance company) and make sure the policy will be paid within 10 years.
Example
• Female donor, non-smoker, aged 32 years old
• Purchases a life insurance policy and transfers ownership to the organization
• Premiums are of $420 per year for 10 years
• The organization will receive death benefit of $25,000
• Net cost of this gift, after tax savings = $2,470
Gift to the organization as owner and beneficiary
(death benefit of the policy) $25,000
Annual premium payment (payable over 10 years) $420
Charitable tax receipt $420
Annual tax savings (tax credit of 48%) $173
Net cost of annual premium (after tax savings) $247
True cost of gift ($ 247 X 10 years) $2,470
4. Name the charity primary beneficiary of a policy
If the owner keeps the policy in force and does not change the beneficiary, the charity will
eventually receive the death benefit. The beneficiary can be changed so you’ll have to steward
the donor very well! The tax receipt will be issued to the donor’s estate.
5. Name the charity co-beneficiary of a policy
Other beneficiaries may be individuals or other charities. This happens when you;re dealing with
an individual with other charitable commitments. The tax receipt will be issued to the donor’s
estate.
Ligia Peña, M.Sc., CFRE
Diversa Consultants
Tel.: 514.699.6046 ; ligia@diversa.ca ; @lpdiversa

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6. Charity as the contingent beneficiary
The charity may still receive a gift. The donors clearly still requires a policy for family financial
security. Show gratitude, the situation may change in the future.
Securities
Which securities are eligible for charitable gifting?
• Appreciated stocks, bonds, and mutual fund shares and units listed on major exchanges
or have regularly published values
• Stocks, debt obligations, rights listed on major stock exchanges (Canadian and US
exchanges)
• Includes units in listed Income Trusts
• Gifts of shares purchased through the exercise of employee stock options in public
companies
The donation much like a gift-in-kind. The tax receipt amount is determined on the closing price
on the day of receipt by the charity. Usually charities sells the stocks immediately but you can
keep them and sale them if you think the price will increase.
Gift of cash proceeds Gift of securities
Fair market value of stocks $10,000 $10,000
Cost of stocks $1,000 $1,000
Capital gain $9,000 $9,000
Taxable capital gain (based on a 50% tax rate) $4,500 $0
Charitable tax receipt for the donation $10,000 $10,000
Income tax credit for the donation $5,000 $5,000
Maximum tax on the capital gain ($4,500 x 50%) = $0
$2,250
Net financial advantage of the gift ($5,000 - $2,250) = $5,000
$2,750
Charitable gift annuities
An annuity is a contract that you buy, from an insurance company, that provides income to the
donor. There are self-insured annuities (the charity makes the payments and assumes the risk)
and reinsured annuities (the insurance company makes the payment to the donor).
Annuities are usually for middle-class donors over the age of 75 who are charitable but cannot
afford to relinquish income from capital.
Ligia Peña, M.Sc., CFRE
Diversa Consutlants
Tel.: 514.699.6046 ; ligia@diversa.ca ; @lpdiversa

7. 7
There are other planned giving vehicles but these are the most commonly used.
Getting started
Here’s a little advice ....
1. As the fundraiser, you need to feel confident that a planned giving program can be
managed without being a financial expert, lawyer, or accountant.
2. A good planned giving program is built on solid, basic development principles, some of
which may already be in place in your charity. This can include a managed pool of
prospects, an annual giving and major gifts program, active volunteer leadership, and a
willingness to engage in programs that benefit the nonprofit.
3. Start by setting very specific personal and program goals. Be realistic about what can be
accomplished, taking in consideration other work demands. It’s important to start a
planned giving program, however small, because the rewards of such a program are
worth the investment of time and resources.
4. Most importantly, surround yourself with experts that know thing you don’t know (planned
giving professionals, lawyers, accountants, financial planners, notaries, life insurance
agents, trust officers, etc.)
Establishing a gift planning program
Source: Canadian Association of Gift Planners Original gift planning course
A. Who receives planned gifts?
Nearly all charities with an established presence can, and regularly do, receive certain kinds of
planned gifts such as bequests, life insurance policies, and securities. Most of them have not
formally established a gift planning program and many of them are reactive rather than
proactive.
B. Should every charity establish a gift planning program?
Every charity should encourage bequests, life insurance policies, securities and other gift
arrangements that require little administration or liability.
C. How does a charity know when it is ready to establish a gift planning program?
It should meet the following criteria:
• Perceived by the community as having a long-term future
• Significant number (usually 1,000 or more) of donors and prospects over age 50
• Several hundred donors who have given $100 or more in a single year
• Ability to make a current investment for a future return
• Committed board, willing to appropriate funds for the program, become familiar with
the types of planned gifts, and set an example by making planned gifts
D. Is a gift planning program the same as en endowment program?
They are not identical because planned gifts can be unrestricted, designated for a current need,
or designated for an endowment. However, the majority of planned gifts probably will be for
endowment purposes. Many charities have built their endowments largely through planned gifts.
Ligia Peña, M.Sc., CFRE
Diversa Consultants
Tel.: 514.699.6046 ; ligia@diversa.ca ; @lpdiversa

8. 8
E. If a charity appears to meet the criteria for establishing a gift planning program, what steps
shout it take?
1. The board appoints a Gift Planning Committee (or Endowment Committee)
2. The Gift Planning Committee:
• Drafts policies and guidelines regarding (a) types of planned gifts to be sought,
(b) criteria for accepting gifts, (c) administration of gifts, and (d) recognition of
planned gifts.
• Consider staffing responsibilities for the gift planning program, and
• Develops a proposed budget
3. The Gift Planning Committee submits to the board the proposed policies and
guidelines, budget and staffing recommendations
4. Assuming approval by the board, take steps for implementing the program. Here’s a
checklist of things to do:
• Terms of Reference for Gift Planning Committee
• Procedures for administering various types of gifts
• Endowment policies (if necessary and if they don’t already exist)
• Prototype endowment agreement (if necessary)
• Sample bequest language to give to donors and lawyers
• Plan for funding the program
• Procedures for recognizing gift planning donors - possibly establish a heritage
society
• Comprehensive marketing plan
• Creating in-house or purchasing gift planning literature
F. Who should be appointed to the Gift Planning Committee?
The chairperson of the committee should be a member of the board, and other board members
may also be appointed. However, not all committee members need to be board members. It is
recommended that the committee include some professional estate planners - lawyer,
accountant, notary, insurance agent, trust officer - and one or more persons with marketing
expertise. Make it a relatively small, working committee.
G. How should the gift planning program be staffed?
Ideally, a full-time Director of Gift Planning but in a small charity, that won’t likely be possible. If
you are the sole fundraiser in your organization, make sure you set aside a few hours per week
to work the program, either by identifying new prospects, calling potential gift planning
prospects, or setting up the program.
H. If a charity foes not meet the criteria for establishing a gift planning program, what should
it do?
Become more proactive, especially in seeking bequests. Any charity can implement a bequest
program, even with limited resources. Create some basic marketing material (even off the
computer) or purchase Leave A Legacy marketing material. Eventually, the charity will evolve to
the point where it is appropriate to establish a program.
I. How should a gift planning program be funded?
Board members must be willing to invest current dollars for a future return.
Ligia Peña, M.Sc., CFRE
Diversa Consutlants
Tel.: 514.699.6046 ; ligia@diversa.ca ; @lpdiversa

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J. How should the various types of planned gifts be counted and recognized?
• Realized bequests (distributions from estate)
Counted: full amount in gift totals
Recognition: listed in annual report, donor wall, listed endowment (if applicable), and
publicity
• Bequest expectancies
Counted: do not count in gifts totals. Amount, if known, may be recorded in expectancies
report. If the amount is unknown, an “average bequest amount” may be shown in the
expectancies report.
Recognition: heritage society
• Life insurance (ownership of policy assigned to the charity)
Counted: cash value at time of assignment and future premium payments counted in gift
totals. Do not count death proceeds in gift totals.
Recognition: cash value at time of assigned and premium payments recognized - the
same as outright gifts of cash. Death proceeds may be recognized the same as realized
bequest.
• Life insurance (charity the beneficiary, not owner of policy)
Counted: Do not count anything in gift totals when charity is named as beneficiary. Count
full amount of death proceeds in gifts totals.
Recognition: Heritage Society. Death proceeds may be recognized the same as a realized
bequest.
• Charitable remainder trusts and other residual interest gifts
Counted: present value of residual interest counted in gift totals.
Recognition: present value may be recognized the same as an equivalent cash gift and/or
Heritage Society. Some charities recognize the future value of the gift.
• Charitable gift annuity
Counted: only the donation receipt.
Recognition: amount retained by the charity recognized same as equivalent gift of cash.
Heritage Society.
K. How can a consultant assist with the development of a gift planning program?
• Initial presentation to the board regarding the potential of a gift planning program (may
convince them to take the next steps)
• Seminar to acquaint board with the giving instruments
• Staff training
• Strategic advice to staff on program design and gifts
• Donor support
• Providing or drafting gift planning policies, endowment policies, endowment agreements,
gift agreements, and procedures
• Helping draft or review marketing material
• Assistance with recruitment of Director
• Audit of existing program, or feasibility study for developing a new one
Developing your planned giving budget
Consider the following expenses to include as budget items in the plan:
Ligia Peña, M.Sc., CFRE
Diversa Consultants
Tel.: 514.699.6046 ; ligia@diversa.ca ; @lpdiversa

10. 10
Office Supplies/Materials
• Letterhead
• Postage
• Business equipment
• Files/Folders
• Furniture
Trainings/Education
• Conference
• Subscriptions
• Professional Memberships
• Seminars
Travel
• Air
• Hotels
• Restaurants
• Rental cars
Computer hardware/software
• Planned giving software
• Computer laptops
• Service contracts
• Telephone/Fax
Professional Services
• Consultant
• Legal services
• Financial service fees
• Outside administrators
Marketing
• Design change
• Printing
Programs and events
• Workshops
• Recognition program
• Events
• Outreach
Salaries
• Director
• Planned giving assistant
Who are planned giving prospects and donors?
Because planned giving often take years to materialize, it’s necessary to build a large pool of
prospects. To build this pool, consider:
• Identify donors who have contributed for many years
• Identify and meet with existing donors to introduce them to planned giving concepts
• Identify and work with 1 or 2 key volunteers who are willing to solicit others for a PG
• Get all board members to make a PG and then encourage them to help you identify
and solicit their network
• Establish a planned giving society
Ligia Peña, M.Sc., CFRE
Diversa Consutlants
Tel.: 514.699.6046 ; ligia@diversa.ca ; @lpdiversa

11. 11
Marketing your planned giving program
Despite having a small or non-existent budget, you can market planned gifts to your donors
through publications, mailings, events, etc.
The four components are part of a marketing program:
1. Continuity: shows the recipient that each individual marketing effort is part of a
whole
2. Consistency: the message should be consistent visually and in terms of content
3. Repetition: once the process of marketing has begun, it must be repeated over time
with each effort reinforcing and building on the previous efforts
4. Cumulative effect: no single marketing effort is responsible for causing a donor to
act or develop a positive impression; rather, all of the marketing efforts have a
cumulative effect. This is why marketing cannot be done occasionally. Marketing
must be done frequently and regularly to produce the ultimate results.
Publications
• Draft planned giving advertisements and articles for existing development
newsletters or publications
• Create a planned giving letter to send to your prospects and donors
• Run planned giving, financial planning and estate planning columns in a
development or planned giving (death brochure) newsletter
• Revise annual fund reply device to include a planned giving appeal
• Create a general planned giving brochure to offer to donors and prospects
• Identify and publicize organization-wide funding opportunities and needs through
various existing publications
• Draft and “Inventory of Assets” booklet to help donors with estate planning matters
and to identify assets that may be used to make a gift
• Create an endowment book that lists existing endowed funds at the organization
Mailings
• Segment the database to develop a targeted population of donors who have made
annual gifts of $25 or more for three or more years to send planned giving mailings
• Segment the database to select donors or prospects who are 75 years old or older
to send specific PG information, such as information on charitable gift annuities. If
the donor’s ages are not known, present a table showing payouts for donors at age
65, 70, 75, 80.
• Target donors 30 to 55 years old for life insurance gifts
• Select all donors who have given $5,000 or more cumulatively to the organization to
receive PG information
• Target geographical areas for mailings by selecting donors living in postal codes that
indicate wealth
• Prior to year-end, send existing PG donors and prospects a year-end tax letter that
highlight the benefits of charitable giving and current tax tips
• Mail a publication 4 times per year to all PG donors and prospects
• Mail a “Ways to Give” brochure to prospects along with a letter showing the benefits
of making a PG during retirement
Ligia Peña, M.Sc., CFRE
Diversa Consultants
Tel.: 514.699.6046 ; ligia@diversa.ca ; @lpdiversa

12. 12
Events
• Host a series of seminars (afternoon tea) for donors, prospects, and friends of the
organization to focus on pre-retirement planning, retirement planning, and financial
planning to attract people who may be capable of making a PG
• Host a luncheon for all donors who have made a PG to the charity
• Conduct PG seminars for area professional advisors
Ligia Peña, M.Sc., CFRE
Diversa Consutlants
Tel.: 514.699.6046 ; ligia@diversa.ca ; @lpdiversa

13. Canadian Charitable Gift Matrix
Type of Gift Benefits to Charitable Benefits to the Donor Gift Examples Most Appropriate
Organizations For
Gift of cash • Available for immediate • Donation receipt for full • Cash • Everyone (any age)
use amount • Cheque who can afford to
• Liquid • Straightforward transactions give up some
• Credit Card
principal and the
• No risk • Satisfaction of seeing gift at • Pre-Authorized interest it would
work today Contributions (PAC), otherwise earn
usually paid monthly
A Gift of • Immediate Use • Donation receipt for fair • Stocks • Owners (any age) of
Publicly Listed • Liquid market value • Bonds stocks, bonds and
Securities • No capital gains tax other securities who
• Little risk • Mutual Fund Units
(including can afford to give
• Generally simple and low • Satisfaction of seeing gift at • Employee Stock
segregated & the asset and the
cost to implement work today Option Shares
mutual fund units) interest or dividends
it earns
Life Insurance • Immediate access to cash • Donation receipt for cash • Any whole life policy • Persons (generally
Policy value, assurance of death value and any future (participating or ages 30- 60) who i)
(Charity named as proceeds if policy retained premiums paid universal) have an older policy
owner and (Term policies are often • Small current outlay • Term policy no longer needed,
irrevocable not retained as donor gets leveraged into larger future (personal) or ii) want to make a
beneficiary) older) gift large gift but have
limited resources
Life Insurance • Will receive death • Satisfaction of providing a • Any type of life • Persons (any age)
(charity named as proceeds unless donor future gift while retaining full insurance policy whose personal
beneficiary but not changes beneficiary control of policy needs and family
owner) designation • Donation receipt to estate for situation may be
full value of death proceeds subject to change
Bequest of • Future gift provided • Satisfaction of providing a • Registered • All individuals, but
Retirement beneficiary designation(s) possible future gift while Retirement Savings especially single
Plan and/ or bequest wording preserving personal security Plan (RRSP) and persons, and
Accumulations are not changed • Gift receipt that offsets tax Registered surviving spouses
on distribution of retirement Retirement Income who have made
funds Fund (RRIF) other provisions for
accumulations heirs
Bequest by Will • Expectancy of future gift • Satisfaction of providing for • Cash, securities, real • All individuals (any
provided that bequest future gift while retaining full estate, tangible age), but especially
wording is not changed control of property personal property older persons with
• Donation receipt for use with few or no heirs
final income tax return
• For bequest of listed
securities, no capital gain
tax, for most other property
50% of capital gain will be
taxable but can be offset by
tax credit from gift, likely
resulting in tax savings to
estate.

14. Canadian Charitable Gift Matrix
Type of Gift Benefits to Charitable Benefits to the Donor Gift Examples Most Appropriate
Organizations For
Shares in a • Public charity - Donation • Public charity - Donation • Shares held in • Entrepreneurs who
Privately- receipt for appraised receipt for appraised market privately-owned are philanthropic
Owned market value at time of value at time of gift, issued corporation • Venture
Corporation gift, issued immediately (if immediately (if gift to public philanthropists
gift to public charity) charity)
• Private Foundation - • Private Foundation -
Donation receipt issued Donation receipt issued only
only when foundation sells when foundation sells
shares. Receipt value is shares. Receipt value is the
the lesser of amount lesser of amount realized by
realized by foundation and foundation and the fair
the fair market value at market value at time of gift.
time of gift. • 50% of capital gain taxable,
• 50% of capital gain offset by tax credit from
taxable, offset by tax credit donation receipt
from donation receipt
Gift of Real • Proceeds available as • Donation receipt for fair • Real estate including • Owners (generally
Estate soon as property is sold market value (FMV) principal residence, over 50) of a
• Sometimes property itself determined by appraisal vacation properties, principal residence
can be retained and used (independently obtained by and investment or investment
charity) properties property who do not
• Valuation and ongoing
• 50% of gain taxable, (unless need the property or
maintenance
property is donor’s primary the proceeds from
considerations can add
residence, in which case no its sale
complexity to gift
administration taxable capital gain), offset
by tax credit from donation
receipt
Gifts of • Can be retained or sold • Donation receipt (if • Artworks, furniture, • Owners (generally
Tangible and proceeds used for applicable*) for fair market equipment, over age 50) of
Personal current needs value determined by collections, objects which they
Property (other • Decisions to retain assets appraisal automobiles, musical no longer intend to
than cultural warrant careful • 50% of gain taxable, offset instruments use
property) consideration, in light of by tax credit from donation
implications for valuation • Satisfaction of seeing gift at
and usefulness for work now or in near term
charitable purposes, and
ability to issue donation
receipt
Charitable • Irrevocable future gift of • Net income from property for • Cash, securities, real • Persons (generally
Remainder remaining trust assets life or a term of years estate over age 60) who
Trust (CRT) • While often complex to • May result in donation want to make a
administer, can be a highly receipt for present value of future gift and
effective gift planning the remainder interest issued obtain present tax
instrument in selected at time trust established relief but want to
circumstances preserve investment
• Property not subject to
income for
• Trust cannot allow probate
themselves and/ or
encroachment of capital or
a survivor
guaranteed income

15. Canadian Charitable Gift Matrix
Type of Gift Benefits to Charitable Benefits to the Donor Gift Examples Most Appropriate
Organizations For
Gift of Residual • Irrevocable future gift of • Ability to continue using • Principal residence, • Persons (generally
Interest in real property property for life or term of other real estate, over age 60) who
estate or years artworks otherwise would
artworks • Donation receipt for present give the property
value of residual interest under their will
issued at time of gift
• Avoidance of tax of a portion
of capital gain if donor
retains life interest
• Property not subject to
probate
Outright Gift of • Immediately added to • Donation receipt for fair • Artworks, collections, • Owners (generally
Certified collection and available for market value determined by artifacts or historic over age 50) of
Cultural display or exhibition appraisal structures certified cultural treasures
Property • 100% contribution limit by Cultural Property who would like to
Review Board preserve the
• No tax on capital gain
(CPRB) property within
• Satisfaction of preserving Canada
property of national
significance
Interest-free • Provides capital for • Principal is recoverable • Cash and cash • Persons (any age)
Loan (normally building or investment • Interest earned on loaned equivalents who have more than
payable on without interest cost funds not taxable to donor enough current
demand) • Public Foundations (like income but want to
• Satisfaction of helping
community foundations) preserve all
charity today
not currently eligible for principal for their
these gifts due to debt own future security
restrictions under the and/or heirs
Income Tax Act
Charitable Gift • Irrevocable gift of • Guaranteed life payments, • Cash or marketable • Oldest donors
Annuity* whatever principal remains all or substantially tax-free securities (usually 65 and
(self-insured) after making required • A donation receipt for a older) who want the
payments portion of contribution security of
guaranteed income
payments
Charitable Gift • Irrevocable gift of that • Cash or marketable • Oldest donors
Annuity portion of the contribution securities (usually 65 and
(reinsured) retained after purchasing older) who want the
commercial annuity security of
guaranteed income
payments
*Note: Only charities designated as charitable organizations (i.e. not public or private foundations) and authorized under provincial law, may currently
issue gift annuities.
Source: Minton & Somers, Planned Giving for Canadians, Third Edition (Adapted and revised)