WAYS TO GIVE

There are many ways to make a gift to the FundyCommunity Foundation. With increasing demands for
support it is important to take the time to determine how to make "the best gift" š the gift that provides
maximum benefit to the community within one‰s capacity to give.

The Fundy Community Foundation accepts the following gifts:

• Cash 
• Appreciated Securities 
• Insurance Policies 
• Bequests 
• Charitable Remainder Trusts 
• Other Assets 

A very straightforward way of making a gift to the Fundy 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 more information:

Gifts of Appreciated Securities

Gifting appreciated securities enables the donor to give the most to the Fundy Community Foundation for the least cost. Over the past several years, federal budgets have effectively reduced the taxable portion of the capital gain on gifted appreciated securities from 75% to 25%. In effect, the tax payable on the appreciation on the gifted securities is offset by the donation tax credit and in addition a portion of their giftcan be used to offset taxes on other income. For more 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 more 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 Fundy Community Foundation. You may specify that your bequest be used toestablish a new fund in your name, be added to an existing fund or be added to a fund that you or yourfamily have established during your lifetime. For more 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 aspecified term of years. At the end of that time, the residual capital is payable to the Fundy CommunityFoundation. Expert council is needed to complete this type of transaction.For more 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 thistype of gift.

DISCLAIMER

 This information is intended to provide general examples for understanding the ways in which charitable gifts may be made to the Fundy 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

Further Information on Gifts of Cash š 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 ëEstate‰ and is therefore not contestable and does not attract various estate settlement fees. Click here to go back

Further Information on Gifts of Appreciated Securities 

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.

The following example illustrates the different savings to be realized through a cash donation from proceeds of stock sales (Donor A) and a gift of appreciated, publicly traded securities (Donor B)

Donor A š Cashes in stock and make a cash donation
Donor A has stock valued at $10,000. She bought this stock when it was only $2,000 so her capital has gained in value by $8,000. She has her broker cash in the stock, calculates 50% of the gain to be $4,000 and š being in the highest income bracket š pays 46.4% tax (for 2001) or $1,856. 

Donor B š Makes a gift of appreciated, publicly traded securities
Donor B has the same stock valued at $10,000, also bought when it was only $2,000. However, instead of cashing in this stock and making a donation of the proceeds, Donor B makes a gift of the appreciated securities, by transferring the ownership certificate to the Foundation. In this case, only  25% of the gain is taxable. So 25% of $8,000 is $2,000. At the 46.4% tax rate (for 2001), this  would mean paying tax on the capital gain of only $928. Therefore, Donor B's tax savings are $928  larger than Donors A's. Click here to go back 

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

Further Information on Charitable Bequests š 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 Fundy Community Foundation to be held in perpetuity.

I give, devise and bequeath the residue of my estate to the Fundy 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 Fundy
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 Fundy 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, ërepresentative‰ interest-rate and life expectancy.

There are a number of advantages to the donor when establishing an irrevocable Charitable Remainder Trust:

• provision of lifetime income to the donor 
• provision of an immediate tax receipt 
• provides beneficial treatment of capital gains 
• donor is free from investment decisions since the trustee can arrange for professional management of the trust assets 
• avoids probate and other estate costs because the assets in a trust pass outside of the estate
• process not contestable 
• provides privacy for those donors who wish their philanthropy to remain a private manner