Charities & COVID: do good, feel good
The pandemic has presented challenges for many, and charitable organizations are among the hardest hit. As you can imagine, one of the biggest struggles for charities is decreasing donations at a time when more and more people need help. According to Imagine Canada’s Sector Monitor Survey, three quarters of charities have seen donations drop and half have seen declines in earned income.1
As we continue to move towards an economic recovery, charitable efforts matter more than ever before in helping to keep our communities strong. When people like you support charitable organizations, it can make all the difference for those in need.
To support charities on a ongoing basis, consider long-term giving options, like investing in a donor advised fund or setting up a private foundation. Donors receive income tax deductions or credits for gifts to a donor advised fund or private foundation in the year of contribution. Then the funds can be distributed to registered charities in Canada over time.
Create your own charitable donor advised fund
A donor advised fund is like having your own charitable foundation where you can be involved in deciding which charities or causes will receive funds, but without the high costs and complexity that comes with establishing a private foundation. You can establish your own donor advised fund for as little as $25,000.
If you establish your donor advised fund using the CIBC Giving Back Program, we professionally manage the investment of your donor advised fund and provide you with regular reporting and feedback on its performance. You’ll also receive details on donations, grant activities and the charitable sectors that benefitted from your generosity.
You can even personalize your legacy by naming your own fund. We’ve partnered with BenefAction Foundation, a public foundation registered with the Canada Revenue Agency (CRA). BenefAction Foundation manages your funds in compliance with the CRA rules including paying the funds to the appropriate charities.
Establish your own private foundation
A private foundation is a registered charity in Canada that makes donations to other Canadian charities. It may also be able to undertake its own charitable activities.
People often take this approach if they want more control over the administration of the charity or they want the charity to carry on its own charitable activities. When you set up a private foundation, you have to oversee its administration in accordance with charitable laws. This structure allows you to control the investments and policies of the foundation.
Private foundations are most appropriate if you’re looking to donate a significant amount, generally at least $2 million.
Did you know? Giving back and the happiness factor
Participating in charitable activities can also improve mental health and encourage positive moods. Studies show that donating money to charity has been proven to have a positive impact on the brain. These effects are similar to activities people usually associate with joy and happiness like eating, exercising, or affectionate gestures like giving someone a hug.2
When you give back, you make a lasting impact on someone’s life—an accomplishment that carries more weight than any personal purchase. The gift of giving comes full circle.
Contact us anytime to discuss how a donor advised fund through the CIBC Giving Back Program or a private foundation can fit into your wealth plan.
Clients are advised to seek advice regarding their particular circumstances from their personal tax and legal advisors.