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Building a philanthropic legacy

November 15, 2023

As you work to build a legacy and give back to causes you hold dear, developing a philanthropic plan can benefit you and the recipients. Working with an expert in charitable giving can deliver even more impactful results and eliminate worries about the effects of donations on your long-term personal wealth.

In this article, we look at the important considerations and choices when setting out a philanthropic plan.

Candice Jay, Wealth Advisor, Associate Advising Representative at CC&L Private Capital in Toronto suggests, “Talk to your professional advisors, such as accountants, lawyers and other financial professionals, about your philanthropic goals. They can help you get there in a more strategic and tax-efficient way.”

How do you envisage your legacy?

The first step is to identify your philanthropic mission, vision and values. These will give you direction and purpose in your giving, help define the benefactors you wish to support and determine the most effective methods to achieve your gifting goals.

Questions to ask yourself include

  • What causes are most meaningful to you and your family?
  • What are your core philanthropic objectives?
  • Do you want to include your children and grandchildren in your charitable endeavours?

Once you clearly define who or what you would like to give to, you can move on to how best to leverage your wealth now and in the future to support your chosen causes

Five ways to give

The next step is to decide how best to achieve an effective outcome. There are many different types of giving strategies, and here we examine five of the most useful.

1. Donating via a donor advised fund

A donor advised fund is a fund at a public foundation. You make tax-efficient donations into the fund, for which you receive a tax receipt for the value of the donation, and when you wish, you recommend grants be paid from the fund to your chosen charity. Your contributions are invested and appreciated tax-free in the fund. At the same time, the public foundation takes care of the administration for a fee typically less than you would pay for your own private foundation. Setting up a donor advised fund can be a simple and cost-effective way to leave a legacy and create a collaborative family mission through generations.

2. Donations in-kind to a charity

You can donate in-kind to a charity all sorts of non-cash items, from cars to property to securities, while benefiting from paying reduced or no capital gains tax. For example, gifting in-kind eligible securities that have increased in value attracts the double benefit of no capital gains tax and the ability to claim a charitable tax credit based on the securities’ fair market value. The tax treatment means you may make more of an impact by donating the asset directly instead of selling it and gifting the cash proceeds. As with all tax matters, we recommend you talk to your tax advisor about your situation.

Candice says, “Donating to charity in your will doesn’t mean you can’t take care of your family. There are many ways to structure your assets and will so that you are simply redirecting money to charitable dollars that would otherwise go to taxes.”

3. Donations of life insurance 

If you want to donate a sizeable sum but are concerned about the impact doing so now could have on your available capital, then naming a charity as the beneficiary of a life insurance policy you take out on yourself could be a solution. Other benefits of gifting a life insurance policy include being able to claim the policy premiums as charitable donations and your estate being issued a tax receipt for the total amount of the life insurance proceeds on your death.

4. Donations of registered accounts 

Another way to secure your legacy is to designate your chosen charity as a beneficiary of one or more registered accounts, such as an RRSP, RRIF or TFSA, where provincial law allows. You can also donate directly from your registered account to a charity without the need to pay withholding tax at source if you submit a T1213 form before processing the donation. Like donating the proceeds of a life insurance policy, your estate will get a charitable tax receipt when the gifts are made.

5. Donations of land

Land donations can be complex and require an application to the federal government; however, there are enhanced tax incentives for donating ecologically sensitive land to a charitable organization through the federal Ecological Gifts Program. By using a conservation easement, covenant, or servitude on the land, you can protect its conservation value by placing conditions on its use. Furthermore, you would continue to own the land while the recipient ensures that the restrictions put on the property are followed in the future.

We counsel clients to incorporate charitable giving strategies into their considered, long-term financial plans as we work together to steward their wealth with confidence. 

Our wealth advisors across the country are always ready to answer your questions about how we can help you achieve your long-term financial goals. Whether you are a valued client or interested in discovering more about the services CC&L Private Capital offers, please feel free to call or email us anytime.



This post is for information only and not intended as investment advice. The views expressed are subject to change at any time.

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Catherine Dorazio
Managing Director
Business Development

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