Mike Morgan | Charitable Giving

Charitable giving and foundations

You’ve likely supported charitable causes in one way or another. But have you ever considered having a more formal philanthropic strategy in place? Perhaps you’d like to educate and get the next generation involved?

If so, your family may want to consider setting up a charitable foundation. This could be a public or private foundation, depending on your needs.

Both options let you make contributions and receive tax receipts. Both will also accept gifts of cash, publicly listed securities, mutual funds and life insurance—some of which have tax benefits associated with them.

The capital in your foundation will be invested in a balanced approach, and grants are disbursed over time to charities you and/or your family are connected to.

With a public foundation—or a “donor-advised fund”—all administration and reporting will be taken care of, giving you the option of being anonymous; whereas, with a private foundation, you are required to be responsible for fund administration and releasing annual reports to the public.

If you’re looking to be actively involved in your philanthropic activities, then a private foundation could be the right option for you. If you want the tax and legacy benefits that a charitable foundation offers—with less administration—then consider a public foundation.

This video is provided by RBC Wealth Management for informational purposes only. The comments contained in this video are general in nature, and do not constitute legal, investment, trust, estate, accounting or tax advice. RBC Dominion Securities Inc.*, Royal Trust Corporation of Canada, The Royal Trust Company, RBC PH&N Investment Counsel Inc., RBC Wealth Management Financial Services Inc. are affiliated corporate entities and member companies of RBC Wealth Management, a business segment of Royal Bank of Canada. *Member – Canadian Investor Protection Fund. Please visit www.rbc.com/legal/ for further information on the entities that are member companies of RBC Wealth Management. ®/TM Trademark(s) of Royal Bank of Canada. Used under license. © 2020 Royal Bank of Canada. All rights reserved.

Charitable Giving

As a whole, Canadians are a caring group. We care about our social and religious institutions, community facilities, arts, education, research and hospitals. We care especially about those less fortunate than us.

When done properly, charitable giving benefits both society and you, the donor. It allows you to help the causes you care about. If you are considering making large gifts, be sure to include these gifts in your tax, financial and estate planning.

Some examples of strategies commonly used are as follows:

Tax-smart charitable giving by donating shares in-kind vs cash or donating an insurance policy
Leaving a lasting legacy with charitable remainder trusts
Starting early by establishing a private charitable foundation
Reducing corporate taxes by making corporate charitable donations

We provide this guide below to help you consider the options when making a gift to a charity, that achieves both personal donation goals, and at the same time provides you tax and estate planning benefits.

Selling the business, creating a charitable legacy

After selling their business, Drew and Sue wanted to focus their time and wealth on making their community a better place. Find out how a team of experts helped this family build a charitable legacy.

View transcript

[Meet Sue and Drew RBC Wealth Management Clients]

[DREW:] Sue and I met at University. I was getting a coffee in the lounge and saw her and just fell in love. Just that simple.

[Drew and his partners recently sold their national network of veterinary hospitals “Calgary North Veterinary Hospital and Emergency Service”]

When the sale of the company came on there's a lot of things that came with that and taxes and creating trusts and things like that that you know aren't really our strength.

[SUE:] You're just relying on what you hear from friends, what you get online and you know, it's difficult because you're always worried you're going to miss something.

[DREW:] We had our goals. They were pretty roughed in goals. We didn't really know exactly how they would be actuated and the team pulled it together and sort of said, “Okay well if you want to do it, here’s the options.”

[VI LIVINIUK:] Drew and Sue sold their Veterinarian Practice.

So that meant that things on the financial front became a little more complicated, and they didn’t really know where to start.

[Vi Liviniuk, CIM, CFP, B.Ed. Vice President, Associate Portfolio Manager. RBC Dominion Securities Inc. RBC Wealth Management]

At that point it was important that would that I bring in all of my financial partners that are specialized in helping clients with different facets of their financial well-being. Whether it's a state planning, tax planning, insurance planning, right down to charitable giving.

[VAN THAI:]

[Van Thai, PFP. Private Banker. RBC Wealth Management]

If you're dealing with the advisor on investment front, and you dealing with me on the personal private banking front, it's just seamless. We are a team.

[DREW:] It's important to us to have a community influence and our local community is important to us and we probably spread our donation dollars out to the various human charities, but the majority of what we do stays within that animal realm, and most of it to the Calgary Humane Society.

[Cody Cormier:]

[Cody Cormier, B.B.A. (Finance), LL.B., TEP Vice President, High Net Worth Planning Services RBC Wealth Management]

(Sue and Drew wanted to impart their values and beliefs to their son, but I suggested that they schedule annual family meetings and at that family meeting one of the things they could do is talk about philanthropy and setting up a private endowment fund inside a public foundation would be a good idea, and that endowment fund would generate income annually and it could get directed to the parents’ favorite charity or the son's favorite charity.

[DREW:] To have a fund that's of itself can can make its own wealth and not just be a stagnant donation every year that comes out of your general account. And it's doing quite well so that's also good for our charities.

[SUE:] Whenever we want to make a contribution, we just give them a call and it's all taken care of. We just have to give them the name of the charity and that's it.

[DREW:] It's a rewarding thing to put something together and then have it come through exactly how you envisioned it.

[SUE:] We have this team of people and they know us and they know what we want to do, what our goals are, what our aspirations are and I can’t say enough about it.

[UNKOWN WOMAN SPEAKING]

RBC Wealth Management is Canada's leading Wealth Manager. Our approach brings the best of RBC to you. Our resources solutions and full access to our team of experts, through one single contact, your Wealth Manager.

Simply put, there's wealth in our approach.

[Wealth Management Dominion Securities logo]

Charitable Giving

Charitable giving and foundations

Charitable Giving

Mike Morgan, CFP, CIM

Selling the business, creating a charitable legacy