When it comes to charitable giving, many people think of simple cash donations. But what if there was a way to give that not only helped your chosen cause but also offered significant financial benefits to you? Gifts of securities, shares, or mutual funds are exactly that kind of strategic giving option. For Canadians looking to support their favorite charities in a meaningful and impactful way, this method can be incredibly rewarding.
What is a Gift of Securities?
A gift of securities involves donating publicly traded stocks, bonds, or mutual fund units to a charity. This type of giving works through the direct transfer of stock or mutual funds. Instead of selling the investment and donating the cash proceeds, you can transfer the asset directly to the charity. This straightforward process has important tax advantages that make it a smart choice for donors.
Why Consider a Gift of Securities?
The benefits of giving through securities extend both to the charity and the donor. Here’s why this option is worth considering:
1. Tax Advantages
One of the most compelling reasons to donate securities or mutual funds is the significant tax savings. When you sell an investment, any increase in its value (also known as capital gains) is taxable. However, if you donate securities directly to a registered charity, the taxable capital gain is eliminated. At the same time, you’ll receive a donation receipt for the full fair market value of the securities, which you can use to claim a charitable tax credit. This means you avoid capital gains taxes while also maximizing your tax deduction. It’s a win-win!
2. Maximize the Value of Your Gift
Because there’s no tax on the capital gains, the charity will receive the full value of the securities, not just the amount left after taxes. This increases the impact of your donation, ensuring more funding goes toward the programs and services that make a difference in your community.
3. Simple and Efficient
The direct transfer of stock or mutual funds is a simple and efficient process when arranged through the right channels. Many charities, including Link Charity, make it easy to facilitate these types of gifts. Once you decide to make a gift of securities, the transfer can be completed quickly, often within a few days.
A Strategic Giving Option in Canada
For Canadians who own stocks, mutual funds, or other investments that have appreciated in value, donating these assets is a powerful way to support causes close to your heart. This option offers donors the chance to make a larger impact with their giving while also enjoying personal financial benefits. It’s an opportunity to give smarter, not just bigger.
Charities are always grateful for cash donations, but gifts of securities have become an increasingly popular way to give because of their unique advantages. By choosing this method, you could make a significant contribution to your community and keep more of your hard-earned money.
How to Get Started
If you’re ready to explore the option of donating securities or mutual funds, start by contacting the charity you wish to support. They will guide you through the steps for a direct transfer of stock or mutual funds and answer any questions you may have. Organizations like Link Charity are experienced in handling these gifts and can ensure the process is smooth and beneficial for everyone involved.
By thinking strategically about how you give, you can make a bigger impact and enjoy real financial benefits. A gift of securities could be the perfect avenue for you to combine generosity with smart financial planning. Why not consider this option for your next charitable donation? It might just be the most rewarding way to give.
