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A smarter way to give

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A smarter way to give

  1. 1. A smarter way to give. <ul><li>Today and for the future </li></ul>Melissa Dailey Consultant Investors Group Financial Services Inc.
  2. 2. This presentation… <ul><li>Is provided by Investors Group Financial Services Inc. (In Quebec, a financial services firm). </li></ul><ul><li>Is provided by Investors Group Securities Inc. (In Quebec, a firm in financial planning). </li></ul><ul><li>Is presented as a general source of information only, and is not intended as a solicitation to buy or sell investments, nor is it intended to provide professional advice including, without limitation, investment, financial, legal, accounting or tax advice. For more information on this topic or on any other investment or financial matters, please contact an Investors Group Consultant </li></ul><ul><li>Although we have tried to ensure the accuracy of this information, tax laws change frequently so the provisions and exemptions mentioned in this presentation may change. </li></ul><ul><li>Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual Funds are not guaranteed, their values change frequently and past performance may not be repeated. </li></ul><ul><li>™ Trademark owned by IGM Financial Inc. and licensed to its subsidiary corporations. </li></ul><ul><li>®Imagine Canada’s logo, “Imagine Canada”, Imagine’s logo and “Imagine” are all trademarks used by Imagine Canada, and are used with permission. </li></ul>
  3. 3. The Investors Group culture of giving <ul><li>Longstanding heritage of: </li></ul><ul><ul><li>Grassroots involvement </li></ul></ul><ul><ul><li>Corporate Funding </li></ul></ul><ul><ul><li>Seed Funding for new initiatives </li></ul></ul><ul><ul><li>Strong employee involvement in the community </li></ul></ul><ul><li>A Founding member of Imagine Canada’s Caring Company Program. </li></ul><ul><li>Belief that a well-rounded financial plan should not be without a charitable gift planning strategy. </li></ul>
  4. 4. The growing generosity of Canadians 1998 1999 2000 2001 2002 2003 2004 2005 2006 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 Source: Statistics Canada Donations ($-billions) Total annual Canadian donations
  5. 5. Charitable gift planning <ul><li>Charitable bequest </li></ul><ul><li>Donate publicly traded stocks or securities </li></ul><ul><li>Establish a charitable remainder trust </li></ul><ul><li>Donate a life insurance policy </li></ul><ul><li>Establish a charitable life annuity </li></ul><ul><li>Gifts of Registered Plans or Life Insurance </li></ul><ul><li>Establish a private foundation </li></ul><ul><li>Establish a donor advised fund </li></ul>
  6. 6. <ul><li>Why is establishing your own personal account within the Investors Group Charitable Giving Program a smarter way to give? </li></ul><ul><ul><li>Similar to having your own private foundation. </li></ul></ul><ul><ul><li>No administrative responsibilities. </li></ul></ul><ul><ul><li>No upfront costs. </li></ul></ul><ul><ul><li>Immediate tax benefits. </li></ul></ul><ul><ul><li>Ability to support your favourite charities now and in the future. </li></ul></ul><ul><ul><li>Builds a long-term charitable gift planning strategy. </li></ul></ul>
  7. 7. The Investors Group Charitable Giving Program <ul><li>Five easy steps: </li></ul><ul><li>Name your account </li></ul><ul><li>Name your successors </li></ul><ul><li>Make your initial gift </li></ul><ul><li>Make your recommendations </li></ul><ul><li>Further gifts </li></ul>Let’s take a look at how easy it was for Alex Jones to set up her own Investors Group Charitable Giving Program account…
  8. 8. Step 1: Naming the account <ul><li>The Investors Group Charitable Giving Program will establish an account. </li></ul><ul><li>Alex can name the account however she chooses. </li></ul><ul><li>For example: </li></ul>“ Jones Family Fund” “ Alex Jones Fund” “ Alex Jones Foundation”
  9. 9. Step 2: Alex names her successor <ul><li>As part of the initial account set-up Alex must: </li></ul><ul><ul><li>Name a successor to take-over and/or </li></ul></ul><ul><ul><li>Name charities to automatically receive grants </li></ul></ul>
  10. 10. Step 3a: The initial gift – Cash donation <ul><li>Alex Jones makes a cash donation of $50,000 to start the “Jones Family Fund” </li></ul><ul><ul><li>Remember: the donation is irrevocable. </li></ul></ul><ul><li>Receives a tax receipt for $50,000 – reducing her overall tax bill. </li></ul>
  11. 11. Step 3b: The initial gift – “In kind” donation <ul><li>Alex Jones makes an in-kind donation of $50,000 worth of mutual funds to start the “Jones Family Fund”. </li></ul><ul><li>Receives a tax receipt for $50,000 – reducing her overall tax bill. </li></ul><ul><li>She is not required to pay capital gains tax on the appreciated value of the in-kind donation. </li></ul>*Assumes the value of the mutual fund when received by foundation is $50,000.
  12. 12. Step 3b: The initial gift – “In kind” donation <ul><li>The adjusted cost base of the mutual fund is $20,000. </li></ul><ul><li>If Alex had instead redeemed the mutual funds and then donated the net value to the “Jones Family Fund”: </li></ul><ul><ul><li>She would have had to pay $6,750 in tax on the capital gains.* </li></ul></ul><ul><ul><li>Her net contribution to charity would be lower. </li></ul></ul>*Assuming a 45% tax rate on the capital gains would be 45% x 50% x ($50,000 - $20,000) or $6,750.
  13. 13. Step 3c: The initial gift – Donation of life insurance <ul><li>Alex Jones makes a donation of a life insurance policy worth $50,000 to start the “Jones Family Fund”. </li></ul><ul><li>Receives a tax receipt for $50,000 – reducing her overall tax bill. </li></ul><ul><li>Alex also receives a tax receipt for every additional insurance premium payment. </li></ul>
  14. 14. Example: Tax reduction benefits <ul><li>Receives a tax receipt for $50,000. </li></ul><ul><li>Example: </li></ul><ul><ul><li>Alex Jones has annual income of $95,000, taxed at a combine rate of $95,000. </li></ul></ul><ul><ul><li>She donates $50,000 to the Jones Family Fund. </li></ul></ul><ul><ul><li>Alex can use her tax credit to reduce her taxes by $22,500. </li></ul></ul>Donation $50,000 Tax credits (federal and provincial) $22,500 ($50,000 x 45%)* Net cost of gift $27,500 ($50,000 - $22,500) *Assumes a combined Federal and Provincial tax credit rate of 45%
  15. 15. Step 4: Making your recommendations <ul><li>Alex selects which eligible funds in which she would like to invest her initial amount and contributions. </li></ul><ul><li>Annual notification of funds available for grants. </li></ul><ul><ul><li>Typically grant approximately 3% to 5% of the account. </li></ul></ul><ul><li>This year, the Jones Family Fund has $2,000 available. </li></ul><ul><li>She can recommend which charitable organizations will receive support. </li></ul>
  16. 16. Step 4: Making your recommendations <ul><li>Alex is required to distribute the full $2,000 to various qualifying organizations </li></ul><ul><ul><li>Note: The minimum grant per charity is $500 </li></ul></ul><ul><li>This year, she chooses the following grants: </li></ul><ul><ul><li>Royal Conservatory of Music: $500 </li></ul></ul><ul><ul><li>Canadian Red Cross: $1,000 </li></ul></ul><ul><ul><li>Canadian Olympic Association: $500 </li></ul></ul><ul><li>Grants are recognized as from the “Jones Family Fund”. </li></ul>
  17. 17. Step 5: Further gifts <ul><li>Alex contributes to the Jones Family Fund as much or as frequently as she chooses. </li></ul><ul><ul><li>Note: Contributions must be a minimum of $5,000. </li></ul></ul><ul><li>She can also: </li></ul><ul><ul><li>Name the Jones Family Fund account as the beneficiary of a life insurance policy . </li></ul></ul><ul><ul><li>Name the Jones Family Fund account as the beneficiary of her RRIF . </li></ul></ul><ul><li>Her family and friends can contribute to her account. </li></ul><ul><li>Tax receipts are provided to all who contribute. </li></ul>
  18. 18. Keeping you informed <ul><li>Additional contributions to the Jones Family Fund each year. </li></ul><ul><li>Ongoing reporting statements. </li></ul><ul><li>Can change her grant recommendation from year to year. </li></ul>
  19. 19. Why the Investors Group Charitable Giving Program? <ul><li>Simple, cost effective and flexible. </li></ul><ul><li>Donor recognition or anonymity. </li></ul><ul><li>Support your favourite charities now and in the future. </li></ul><ul><li>Immediate or deferred tax savings. </li></ul>
  20. 20. Is the Investors Group Charitable Giving Program right for you? <ul><li>Do you have assets you have already earmarked for charity as part of your estate? </li></ul><ul><li>Would you like to support your favourite charity now and over the long term? </li></ul><ul><li>Do you want a simple, cost effective way of giving back? </li></ul><ul><li>Have you considered establishing a private Foundation but feel you cannot afford the time or money? </li></ul>
  21. 21. A smarter way to give <ul><li>Your own unique circumstances and preferences will determine the best way for you </li></ul><ul><li>We understand – because we care too </li></ul>I can help: See me about setting up an appointment to discuss the most appropriate charitable gift planning approach.
  22. 22. Questions? “ We make a living by what we get; We make a life by what we give” Winston Churchill “ A smarter way to give” – C3527 – 07/2008

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