“I found it very easy dealing with you and the Foundation in making my idea of a gift a stock a reality. I knew that stock could be donated, but I didn’t know how to do it or how my congregation, the recipient, could deal with it. The Foundation made it a simple process, and you responded promptly to all my e-mails. I am very glad that we have the United Church of Canada Foundation.”
A gift of publicly listed securities such as stocks and mutual funds can be a good way to make donations to organizations you care about and get an extra tax credit as there are no taxes on capital gains of donated publicly listed securities. A charitable gift of stocks or mutual fund units is free of tax on the capital gain. This gives you an extraordinary opportunity to save tax dollars even while making a generous gift to the Foundation’s Living Spirit Endowment Fund or Mission Focus Funds, establishing your Personal Endowment Fund, or supporting your congregation and other charities through a Gift Fund.
The process is quite simple:
- You fill out the Transfer form and send a copy to the Foundation and a copy to your broker. This ensures we are able to provide you with a receipt and know what you want us to do with the proceeds of the sale.
- Your broker transfers the stock or mutual fund you directed to the Foundation.
- The Foundation provides you with a tax receipt for the value of the shares or mutual fund units at the close of the markets on the day the Foundation receives them.
- The Foundation sells the securities as soon as possible and then passes on the proceeds to the organization(s) you listed on the form.
The whole process takes approximately three weeks. There are occasions when it takes longer. If your gift is time-sensitive, please speak with Foundation staff before initiating the transfer.
The only fee associated with a gift is the $9.95 our discount broker charges per sale of shares.
There must be a gift to a United Church Institution and a gift must be a minimum of $300 for it to be passed on. Gifts to charities not affiliated with the United Church may be reviewed by the Foundation before approval of a grant. The Board of Directors retains the right to disallow gifts to ineligible charities.
Even though the Foundation sells the shares or mutual fund units it receives as soon as it has access to them, more often than not there is a variation between the value of the tax receipt you receive and the proceeds of sale. This is due to price fluctuations in the market and is beyond the Foundation’s control. If your gift must be a certain amount (e.g., you are fulfilling a pledge to a building campaign or annual operating fund), please speak with Foundation staff before initiating the transfer.
Here’s the difference it makes to give shares rather than writing a cheque after selling the shares. Let’s assume that you are considering a gift of shares worth $50,000, and that the original purchase price was $25,000. Let’s also assume you are in the top tax bracket (46%).
|Giving shares||Writing a cheque after selling shares|
|1. Value of the shares||$50,000||$50,000|
|2. Original purchase price||$25,000||$25,000|
|3. Capital gain||$25,000||$25,000|
|4. Taxable gain at 50%||$0||$12,500|
|5. Donation tax credit at 46%||$23,000||$23,000|
|6. Tax on capital gain at 46%||$0||$5,750|
|7. Net tax savings||$23,000 – 0 = $23,000||$23,000 – $5,750 = $17,250|
|8. Donation receipt||$50,000||$50,000|