It is not unusual for those making charitable donations to have concerns. Consider, for example, the case of a person wishing to make a legacy donation to one or more of his or her favorite charities.
Typical concerns may be as follows:
How quickly will the money be spent? It is not uncommon for donors to want to create a legacy — to provide support for years to come, or even in perpetuity.
The donor may feel some apprehension with respect to providing a charity with a lump sum, with the freedom to spend it without any control.
A preferred option may be to have the money invested, with an annual amount going to one or more charities.
In such a case the donor may want to have some input as to how their donation is invested.
A donor may have a number of preferred charities today, but may wish to have some flexibility to look at other options in the future.
A donor may wish to have some input as to how donations to a charity are used.
There are a number of ways to deal with these concerns, but in many cases the solutions are complex and expensive, and require significant administration.
An alternative may be to consider a Donor-Advised Giving Program.
Offered by a number of Canadian institutions these programs simplify much of the legal, accounting and administrative issues involved in setting up a charitable foundation, and in the process provide a simple and effective way of addressing the above-mentioned concerns for Canadians wishing to support their favorite charities.
For example:
• The donor can control how much will be dispersed in any given year.
• The donor has input with respect to investment options.
• The donor can change his or her mind at any time with respect to which charity to support.
• The donor can maintain a dialogue with specific charities for the purpose of understanding how ongoing support will be used. If the donor does not approve of the charity’s plans, he or she can consider other options.
Donor-Advised Giving Programs can be used for inter-vivos or testamentary donations. CRA regulations surrounding these programs have changed recently (for the better). For more information please feel free to call or email.
To receive PDF versions of this or previous articles please email jim.grant@raymondjames.ca.
Jim Grant, CFP (Certified Financial Planner) is a Financial Advisor with Raymond James Ltd (RJL). The views of the author do not necessarily reflect those of RJL. This article is for information only. Raymond James Ltd. is a member of Canadian Investor Protection Fund. For more information feel free to call Jim at (250) 594-1100, or email at jim.grant@raymondjames.ca. and/or visit www.jimgrant.ca.