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Inspire Gifts of Securities – 2024

Donations of stock and mutual funds can have an incredible impact on the work of your congregation. What is the biggest reason people aren’t giving this way? Well, there are actually two: they don’t know it’s an option, and they don’t know how to do it. By incorporating a securities donation strategy into your overall stewardship plan, you will likely discover that there are people in your community of faith who can support you in a way they never have before. Ministries of all sizes can develop new revenue streams to support operations and special projects.

Imagine receiving a major gift from folks you never imagined were in a position to give so generously. Or from those you knew could, if only they could find a creative solution to do so. By creating awareness and reminding your congregation about gifts of securities, you can!

How does it work?

Folks as us all the time if congregations and other organizations need to set up a special account with the Foundation to be able to accept securities donations. The answer is no! By making the donation through the Foundation, there is very little work on your part at all! The donor initiates the transaction through their broker using our transfer form, the Foundation receives and sells the securities, transfers the proceeds to you, and issues the charitable tax receipt on your behalf. Donors can even split their donation between several registered Canadian charities, making it an even easier way to give!

Your congregation must continue to engage in the vital work of telling the story of your ministry, nurturing relationships, and inspiring this faithful giving. The Foundation provides a streamlined process for accepting donations of securities, allowing you to focus on your ministry.

Here are some tips to encourage gifts of securities to support your work:

• Make sure folks are educated. The Foundation often posts important industry news and educational resources that will ensure your supporters have the most-up-to-date information to make their gifts. Share our social media posts, blogs, webinars, and newsletters!
• Ask past securities donors to share their experience, and/or share a story of what has been made possible in your congregation thanks in part to a gift of securities. Personal testimony is always the most powerful motivator!
• Keep this way of giving top of mind. Include something on your social media, in your newsletter, bulletin, on your pledge forms, so when it comes time to make a gift, people will remember that it’s an option! Use the templates and sample text we’ve provided below as a start.

Changes to the Tax System for 2024

Canadians owning securities (stocks, bonds, mutual funds) that increase in value experience what is called a “capital gain.” These capital gains are taxable when the securities are sold. Although selling shares in a publicly traded company will generate personal income, stockholders must pay a significant amount of tax on 50% of the capital gain.

Fortunately, since May 2006, a holder of securities can eliminate taxes on their capital gain by donating them directly to a registered charity like the United Church of Canada Foundation. By doing so, the gain is eliminated, and the donor receives a charitable tax credit for the full market value based on the close price on the day when the transfer goes into the Foundation’s account. This is a great opportunity to support the United Church ministries and other causes they care about while also benefiting from tax savings, because the Foundation is able to then direct the proceeds of the sale of the shares to congregations, camps, chaplaincies, and other Canadian charities.

The 2023 Federal Budget included the elimination of this tax exemption for capital gains on securities donations, which caused some concern in the charitable sector. In response to some of these concerns, the 2024 federal budget proposes to allow taxpayers subject to Alternative Minimum Tax (AMT) to claim 80% of the charitable donation tax credit when calculating the AMT, instead of the previously proposed limit of 50%. However, the 2024 federal budget provides no relief on the inclusion of 30% of capital gains on donations of publicly traded shares in the AMT calculation, instead of such donations being free of capital gains. The Foundation encourages all individuals to speak with their financial advisors to determine the best path forward.

Resources

First and foremost, please encourage your supporters to speak with their financial advisor to determine the most appropriate course of action.

• Our latest securities transfer form
• Sample text to use in your bulletin or newsletter
• Customizable social media posts (can also be used in your other communications)