DONORS
WAYS TO GIVE

Gifts of Cash
A very straightforward way of making a gift to the Niagara Community Foundation is by way of cash or cheque. This is an attractive form of gift for the donor who has cash readily available and wants to make an immediate donation. The Foundation is able to invest the donation immediately to generate funds to support charity. The donor enjoys immediate tax savings. For further information

Gifts of Appreciated Securities
Gifting appreciated securities enables the donor to give the most to the Niagara Community Foundation for the least cost. Over the past several years, previous federal budgets have effectively reduced the taxable portion of the capital gain on gifted appreciated securities from 75% to 25%. The 2006 Federal Budget had reduced the capital gains inclusion rate for such donations to zero. In effect, taxpayers can now donate qualifying securities with appreciated gains to a charity and not have to pay any tax on the capital gain that would otherwise be realized. For further information

Gifts of Insurance Policies
A gift of life insurance, by either making the Foundation the owner and beneficiary of an existing policy or purchasing a new policy and making annual premium payments, has many benefits. It allows you to make a significant gift at a fraction of the value from your disposable income. You can provide for your gift now. Your annual payments are generally modest and eligible for tax credit, giving you annual relief on your income tax return. For further information

Charitable Bequest
A bequest in your will may specify a certain sum of money, a particular asset, or a portion of your estate, to be donated to the Niagara Community Foundation. You may specify that your bequest be used to establish a new fund in your name, be added to an existing fund or be added to a fund that you or your family have established during your lifetime. For further information

Charitable Remainder Trust
This is an arrangement under which you irrevocably transfer property (cash, securities or real estate) to a trustee, usually a trust company. You retain the right to the income from the trust, either for life or for a specified term of years. At the end of that time, the residual capital is payable to the Niagara Community Foundation. Expert council is needed to complete this type of transaction. For further information

Gifts of other Assets
(property, art, royalty interests, closely held corporate securities, gifts-in-kind)
The Foundation will consider gifts of other assets on an individual basis because there are a number of factors to consider with each type of gift. Please contact the Foundation office if you are considering this type of gift.

DISCLAIMER
This information is intended to provide general examples for understanding the ways in which charitable gifts may be made to the Niagara Community Foundation. Every effort has been made to ensure the accuracy and currency of the information presented. Donors reviewing this information should consult with professional advisors for independent advise on the optimal way to achieve their objectives.

Further Information On Ways To Give
Gifts of Cash – Tax Effect
If the individual donor wishes to liquidate an asset to make the cash gift, the possibility of gifting the asset rather than cash should be considered. There may be tax advantages, particularly with appreciated securities and possibly with other types of assets as well.

With a gift of cash, the donor receives an income tax credit (for corporations a deduction is claimed) for all amounts up to 75% of net income as defined in the Income Tax Act. For amounts over $200, the donation reduces tax liability at the full marginal tax rate.

The donor may carry excess donations (those not claimed in the current tax year) forward for five taxation years.

In many cases, retired or self-employed persons can obtain immediate benefits by reducing quarterly tax installments. Employed persons may obtain immediate authorization to reduce employer income tax withholdings.

Since this gift is made prior to death, it does not form part of the ‘Estate’ and is therefore not contestable and does not attract various estate settlement fees. Click here to go back

Gifts of Appreciated Securities – Further Information
The following are the criteria, which must be met in order to qualify for this very favourable tax treatment. Only gifts of qualifying securities are eligible which include: shares, bonds, warrants, options listed on a prescribed stock exchange, mutual fund shares/units, segregated fund units, and prescribed debt obligations. The actual securities must be transferred to the Foundation. The gift will not qualify for favourable tax treatment if the securities are sold and then proceeds gifted to the Foundation.

Further Information on Gifts of Insurance

This type of gift is especially of interest to younger donors who want to provide significant benefit but currently lack wealth to make an immediate substantial gift. Whether donors decide to make the Foundation the owner and beneficiary or simply have the proceeds paid to the Foundation as a beneficiary, it is important to know that proceeds pass outside of the estate and therefore will not be subject to probate fees.

Gift of an Existing Insurance Policy
The donor donates the policy designating the Niagara Community Foundation as both owner and beneficiary. If the policy is paid up, no further premium payments are required. If the policy requires further premiums, the donor continues to make premium payments. The Foundation issues a charitable receipt for the cash surrender value at the time of the transfer. A further receipt is issued for premiums paid subsequent to transfer. Normally, the donor makes payments directly to the insurance company. In December of each year, the insurance company issues a letter to the foundation specifying premium payments for which the Foundation issues a receipt to the donor.

Gift of a New Insurance Policy
The donor makes arrangements with a life underwriter for a policy designating the community foundation as both owner and beneficiary. The donor clarifies their intent by letter to the foundation regarding designation. The donor makes premium payments on schedule directly to the insurance company. Annually, the Insurance Company informs the foundation of the premiums paid. The Foundation issues a charitable receipt annually to the donor. Click here to go back

Charitable Bequests – Tax Information and Sample Will Clauses
Because a bequest is revocable, it provides no current income tax credit. However, the estate will be entitled to a donation receipt for the full value of the bequest. This can significantly reduce the tax payable with the estate’s final income tax return. Any unused portion of the receipt may be carried back one year.

In gifting by bequest, donors should consider providing the Foundation with a copy of the clause in the Will pertaining to the bequest. This will be particularly helpful when issuing a receipt for the estate at the appropriate time. The following are some suggested clauses to be inserted in a Will. Please note that these samples should be adapted to meet the donor’s particular needs. They must also be approved by the donor’s legal representative.

I give and bequeath the sum of $_________ to the Niagara Community Foundation to be held in perpetuity.

I give, devise and bequeath the residue of my estate to the Niagara Community Foundation to be held in perpetuity.

In case any bequest made by this will shall by reason of the death of the beneficiary in my lifetime, or for any other reason fail to take effect, the property so bequeathed shall be transferred to the Niagara Community Foundation, to be held in perpetuity.

After the death of ____________________ (life tenant) I give, devise and bequeath the residue of my estate to the Niagara Community Foundation, to be held in perpetuity. Click here to go back

Further Information on Charitable Remainder Trust
When you establish the trust, you receive, provided certain criteria are met, a charitable donation receipt for the value of the remainder interest. Generally the valuation is relatively straightforward and is based upon a valuation of the gift property, the expected duration of the life-interest, ‘representative’ interest-rate and life expectancy.

Donors should be aware that there are a number of issues to consider when looking to establish an irrevocable Charitable Remainder Trust. Since the gift is irrevocable, title of the property has been transferred and in the case of a financial reversal, the donor cannot regain access to the principal. Most financial institutions will not establish a trust for amounts under $100,000, so the capital outlay is quite large. There are set up fees and ongoing costs charged by the trustee (if a financial institution) which the donor must incur.

It is very important that donors considering this type of gift seek professional counsel.

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