Giving to Charity? Do This to Save Tax

Want your charitable giving to go further? Jamie Golombek explains in our new podcast how donating investments can save you money on taxes while supporting causes you care about.

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The best way to give to charity is to give appreciated securities if you have them in a non-registered account. So think shares of Apple shares of NVIDIA, mutual funds, segregated funds, anything that’s gonna up in value, because when you give those shares directly to a registered charity. Or in some cases to a foundation that could be a, a donor advised fund that’s run by many of the banks have them, or maybe the public foundations have that as well as; city foundations, community foundations.

But when you give these appreciated shares to charity, not only do you get a donation receipt for the fair market value of that donation, which depending on the province, it’s worth, you know, up to 50%.

Right.

But in addition to that, you pay no capital gains tax.

That’s the key.

So imagine you bought Shopify, you know, a year ago or so, and, and now you’ve like got 4X your money, right?

You give that to charity, the entire gain is tax free. So you get a receipt worth 50%, and you save 26% potentially, depending on your tax bracket of capital gains tax. So this is the number one way people have appreciated securities outside of an RRSP or a DI, right? You have to have them in a non-registered account should be giving to charity.

People think it’s complicated. I do it every year. It takes five minutes. By the way, five minutes. That’s how much it takes me to donate my shares to a registered charity.

So you work with a charity that knows what they’re doing, like a big major, you know, either a foundation or a donor advised fund or you know, whatever. And I sign a form, scan it. It’s done, five minutes, and I’ve saved 26% capital gains tax.

 If you are lucky enough to have big gains and, and non-registered accounts to your point earlier, and you want to make charity contributions, the way to look at this is it’s by far the most tax efficient way to do it. And the, and the savings are not insignificant.

I mean yeah, they’re huge.