Can you believe we’ve crossed the critical half-way point and in the home stretch for tax and smart charitable planning in 2022?
The good news is that, with four months to go, charities and advisors have a valuable runway to engage in discussions about tax planning and charitable giving with their donors and clients, and donors have the time to make a difference for themselves and their communities. But there isn’t a moment to waste. The big push toward year end begins now.
Ideally, a charity reaches out for funding armed with not only a strategy but also the information needed by a prospective donor to understand and unlock their giving potential. The donor’s financial advisor also plays an important role by helping to reduce their client’s tax exposure: in essence, helping the donor trade a donation in exchange for tax reduction or elimination on their taxable capital gains.
With the stock market still hovering near all-time highs and unlocked capital gains still in investors accounts, individuals should be looking well beyond simply donating from their chequing account with after-tax dollars. Instead, their advisors and fundraisers should illustrate the benefits of a donation from assets that will be taxed once sold. In this situation, the advisor transfers the donor’s shares to the charity, no tax is incurred on the capital gain, and the donor receives a tax credit for the donation. The result is a win for the client/donor, the charity, and the advisor.
Bill Petruck, president of FUNDING matters® Inc., a consulting firm that advises charities on capital and endowment campaigns, and the developer of Giftabulator®, an online app that instantly illustrates the tax benefits of charitable giving from appreciated assets and estates, understands that planned giving can be intimidating. “Complex terms, complex calculations, and the risk of penalties if done incorrectly lead many fundraisers and financial advisors away from discussing current tax-efficient and planned giving strategies with their donors or clients, which in turn leads to expensive lost opportunities for all parties.”
Petruck knows many donors “could give more in 2022 in order to save on taxes.” He developed Giftabulator® to make the concepts of major-gift and planned giving easier to understand. “When charities and advisors can teach the core capabilities of strategic philanthropy, they provide value to their clients and that translates to value for everyone.”
Petruck is concerned that 96 percent of current wills do not include a bequest. He emphasizes that charities need to educate donors about giving now or looking to endow from the donors’ estate and current assets. “Rather than relying on a widely and often randomly focused fundraising appeal at the end of the year, both donors and charities would benefit financially from targeted discussions about the importance of donating – and from a tool that shows donors how they can afford a tax-efficient donation from taxable appreciated assets.”
Giftabulator® is that tool, pre-programmed with charitable giving scenarios based on region, household income tax brackets, and tax payable on appreciated assets such as stocks, mutual funds, registered investments, secondary property, and private company shares. Giftabulator® generates outcomes within a split second to illustrate the benefits of a charitable donation.
Addressing the importance of current or planned giving can revitalize a fundraising program. With the right tool and with informed, supported staff, charities can sustain their giving programs and improve the financial position of their donors.
Giftabulator’s purpose is to democratize charitable giving by providing everyone with access to smarter ways of making better donation decisions and, in the end, to raise more money for charities while reducing the cost of donations for donors.
At FUNDING matters® Inc., we understand how important an effective major donor and legacy program is to the success of your organization. We also understand that you need access to an online tool like Giftabulator® to help you make compelling gifting illustrations and proposals.
Giftabulator® provides a virtual donor-engagement process and maximizes your efficiency and productivity. Many organizations across Canada have seen the benefit of Giftabulator® acting like an extension of their own staff. Contact us for a demonstration of what Giftabulator® can do for you.