Gifts of securities are a tax-smart way to put your investments to good use and impact local health care.
It’s a sunny autumn afternoon in Halifax and Siggy Heinze-Milne is out on a 60 km ride on his e-bike. At age 76, and a two-time cancer survivor, his daily jogs and rides have been an important part of his recovery, along with radiation and chemotherapy at the QEII Health Sciences Centre. His wife, Gail Heinze-Milne recalls when Siggy was first diagnosed with prostate cancer more than 20 years ago.
“He kept jogging through six weeks of radiation treatment, and went to the gym regularly,” she says. “The doctors were amazed.”
In the fall of 2021, Siggy was diagnosed with head and neck cancer. In May of this year, he completed chemotherapy and is currently on immunotherapy. The Heinze-Milne family are big believers in the importance of exercise when facing a health crisis.
“It boosts your immune system, and helps your body cope with the treatments,” Gail says.
With that in mind, the family was inspired to make a recent gift of stock to the QEII Foundation in support of the QEII’s Activating Cancer Communities through an Exercise Strategy for Survivors (ACCESS) program. This free exercise program is designed to help patients cope with their treatments and enhance their overall well-being.
This was the first time the family donated a gift of securities, and they credit their financial planning advisor, Glenn Stewardson, for making them aware of this important option for charitable giving.
“Glenn was able to make this happen very quickly and easily — we didn’t even have to go to the bank,” Gail says. “We were able to make a larger donation than we could have made with cash.”
Gifts of securities form an increasingly important role in the discussions he has with clients, says Stewardson, a financial planning advisor with Assante Capital Management Ltd. Whether the gift is of publicly traded stocks or mutual funds, the strategy offers important tax advantages to donors.
“Stocks and mutual funds that have been held for many years will have a significant capital gain,” Stewardson says. “Selling those stocks will trigger the capital gains tax, and 50 per cent of that gain is taxable.”
A MUTUAL BENEFIT
Making a donation of publicly traded stocks, bonds or mutual funds, by contrast, eliminates the capital gains tax on those assets, while also providing the donor with a charitable tax deduction for their fair market value.
Canadians holding a Registered Retirement Income Fund (RRIF) are required, after age 71, to withdraw five per cent each year, and this is taxed as income. The deduction from a charitable gift can be used to offset the taxes owed on withdrawals from an RRIF account, Stewardson explains.
“People don’t like having to take that money out — and pay tax on it — if they don’t need it,” he says. “This strategy allows people to get money from their RRIF account without paying tax.”
The elimination of capital gains tax is even more attractive if the gift is made from shares inside a corporate or business account, he adds.
“The government will give the corporation a tax credit for 100 per cent of the capital gain,” Stewardson says.
The emerging investment trend of strategic philanthropy allows Canadians to integrate their personal values with their tax and financial plans. The entire process of donating a gift of securities is hassle-free for the donor, Stewardson adds.
“All the donor really has to do is sign a form authorizing a transfer of the assets,” he says. “It’s not a cumbersome process.”
With Siggy’s passion for exercise, the Heinze-Milne family wanted their donation to go to the QEII’s ACCESS program. The ability to direct your donation to a specific area of care or research makes a gift of securities an appealing option, says Geoff Graham, Charitable Giving Advisor with the QEII Foundation.
“We’ve had donors over the years who have helped us in every care area,” Graham says. “It could be cancer, heart health, mental health or our QEII patient support programs.”
Donors can also direct their gifts towards the QEII Foundation’s We Are campaign; a fundraising initiative with a $100-million goal and transformative projects that will have an immediate impact on patient care and health system transformation.
“We’ve also had grateful patients come forward and ask that their donations be directed to a particular unit or department,” Graham says. “We have a number of donors who make these gifts of securities on an annual basis, so we are happy to sit down with them to talk about our current priorities, and where their gift could have the most impact.”
As we kick-off the season of giving, it’s clear that gifts of securities – of all sizes and market value – can play a pivotal role in advancing care at the region’s largest and most specialized adult hospital. With the QEII seeing more than one million patient visits a year, chances are your investment will one day impact someone you know or love.
The Heinze-Milne family recently learned that their donation allowed the ACCESS program to accept an additional 100 participants. While the tax write-off was nice, Gail says, the greatest satisfaction comes with knowing their gift of securities will help other cancer patients and survivors on their healing journey.
“We’re thrilled that our gift will mean more people get to experience the benefits exercise can make in their own cancer recoveries.”