As the pandemic rages on, COVID-19 has caused us to think about something we’d rather not: our own mortality. With that comes an opportunity to create a legacy of charitable giving.
After 18 months of uncertainty, the world is starting to open up again. In October, the Canadian Government lifted the global advisory on non-essential travel. And just last week, it dropped the molecular COVID-19 test requirement for short trips abroad. It’s a big step toward getting back to normal, and a welcome reprieve for those itching to escape the cold winter weather. But the reality is that we’re still living in a global pandemic. The health threat to ourselves and our loved ones, though reduced thanks to the rollout of vaccinations, still requires us to travel with care. For many, that means more than preparing a will (only 50% of Canadians currently have one, according to Statistics Canada), but thinking about the legacy they want to leave behind. Skeptics will question whether it’s possible to support both their family and their favourite causes. It is. And the simple truth is that charitable organizations need your support—now more than ever.
Those who already donate to charity know the sector is on its knees. From changes in policy and infrastructure to uncertainty in the economy, many non-profit and charitable organizations have dealt with blow after blow to their operations—some better than others. A full quarter of charity leaders surveyed by Imagine Canada say their organizations will not be able to operate for more than one year. But if just 3.5% more Canadians include a charitable gift in their will in the coming decade, $40 billion could be directed to charitable causes. For charities at risk of collapse, receiving a legacy gift could make all the difference.
There are big benefits to leaving a legacy gift. In 2018, the Government of Canada introduced a new tax incentive to encourage more people to include a charitable gift in their will. When you choose to support a charity, your estate can receive a donation tax credit for the full value of your gift; offsetting the amount of taxes to be paid and maximizing the amount left in your estate for your loved ones.
But leaving a charitable gift in your will is about more than tax breaks. It also allows you to bring future generations into your charitable activities. By involving your family in the decision-making process, you can make your gift more meaningful and ensure its viability long after you’re gone. Indeed, you may make it easier for friends and family who are charged with settling your affairs by naming your charity in your will. For some, knowing your loved ones will still be connected—and in some cases, inspired—by your contribution is very comforting.
So, how can you maximize your gift and make sure you have enough left for your family? A charitable bequest can be a specific amount of money, a percentage of your estate, or a residual gift. This type of gift allows you to take care of yourself and your family first by covering the costs of taxes, debts, burials, and other bequests, then give your remaining wealth to a charity. You’d be surprised how a small portion of your estate can create significant change for the causes and communities you care about, while still supporting your loved ones.
No matter what approach you choose, you want your gift to have the highest impact, both for your favourite cause and your family. A philanthropic advisor can partner with your legal or financial support team to design your gift in a way that helps the good work live on. Find the right advisor for you, and learn more about giving the gift of a lifetime at willpower.ca.
Kathy Arney is a philanthropic advisor, a chartered professional accountant and a master financial advisor in philanthropy (MFA-P) based in Alberta. In 2013, Kathy founded KEA Canada to help build stronger, more effective non-profit organizations, and contribute to a better world by nurturing generosity and philanthropy. Since then, she has consulted with organizations across Canada, including universities and colleges, arts organizations, community organizations, and the health sector. Now, she’s turning her attention to strategic philanthropy.