One of the most financially sound ways to support the Crisis Centre is with the gift of securities (stocks, bonds, mutual funds).
Thanks to changes in Canadian tax laws in May of 2006, when you donate stocks, mutual funds and other securities to a registered charity, you pay no capital gains tax and receive a tax receipt for the full amount of the gift. It means a great tax break for you and hope to individuals in need.
Tax advantages
Usually, when you sell a security, you’re required to pay tax on 50% of the capital gain. But when you transfer that same security directly to a charity like the Crisis Centre, there’s no tax on the capital gain realized. This is a tremendous incentive to give securities as a gift now to ease your own tax burden, or as a deferred gift in your will to offset the tax against your estate.
How to Donate Securities
The easiest way to donate securities (and most cost effecting for us) is online through CanadaHelps. Donating online ensures that we can keep our administrative costs low and ensure more support is provided to our frontline, essential services work.
Depending on whether you hold your securities with a broker or as physical documents (i.e. stock certificates), you may donate them by physical delivery. For electronic transfer, please contact your broker and fill out a Direction to Transfer Funds Electronically form.
For more information, we invite you to contact our Development and Communications team by phone at 604-872-1811.
- As a donor you will receive great tax benefits and receive an immediate donation receipt.
- Securities are easily handled and can be transferred physically via delivery or electronically.
- As illustrated by this table, you increase your current after-tax cash flow:
Impact of Federal Budget Provision to Eliminate Capital Gains Tax on Publicly Traded Stock and Securities (Marginal tax rate at 46% for illustration)
How you benefit:
| Sell shares and gift cash to charity | Gift shares directly to charity | |
| Current market value of stock and amount of tax receipt | $100,000 | $100,000 |
| Cost base | $20,000 | $20,000 |
| Capital gain realized ($100,000 – $20,000) | $80,000 | $80,000 |
| Taxable capital gain (50% of $80,000) | $40,000 | $0 |
| Tax due on gain (46% of $40,000) | $18,400 | $0 |
| Donation tax credit (46% of $100,000) | $46,000 | $46,000 |
| Net tax savings from donation (tax credit minus tax due) | $27,600 | $46,000 |
*Assumes donor at 46% marginal tax rate
Securities Donation Policy
The donation must be an in kind transfer of the security itself, not the cash proceeds from the sale of the security. Such a transfer is easily made electronically from your investment account.
The Crisis Centre has a policy of issuing a tax receipt for the closing value in Canadian dollars on the date the shares are received into its brokerage account. If the shares are hand-delivered or mailed, a properly executed power of attorney is required and the Centre has a policy of issuing a receipt for the closing value in Canadian dollars on the date the shares are received and accepted.
The Crisis Centre has a policy to sell shares on the same date they are received, or as close to it as possible.
