Creating Your Own Charitable Foundation? Camber Has a Solution...
Have you ever wanted to have your own charitable foundation, where you can support charities of your choosing, get a tax credit, and still have a say in how the funds are managed? If yes, consider Camber’s Donor-Advised Fund account.
Camber’s Donor-Advised Fund (DAF)
Camber’s Donor- Advised Fund (DAF) is a brokerage account opened through a registered charity/public foundation that allows donors to make a charitable contribution, receive an immediate tax benefit, and then decide which charities will get the money over time. It's a flexible way for individuals, families, and corporations to manage their charitable giving without the cost or regulatory burden of running your own formal charitable foundation.
It's simple, really.
- Contribute: You add money, stocks, or other assets to your DAF.
- Tax Deduction: You get an immediate tax credit for your contribution.
- Invest: The money in the DAF can be invested and grow tax-free.
- Donate: You choose which charities to support.
Benefits of Donor-Advised Funds:
- Immediate Tax Benefits
When you contribute to your Camber DAF, you get a tax credit right away. In Canada, this means you can lower your taxable income for the year, reducing your tax bill.
- Flexible Giving
DAFs provide flexibility in terms of timing. You can contribute assets now, receive the tax credit, and decide later which charities to support. This is particularly useful if you want to take advantage of a tax credit in a high-income year but need more time to plan your charitable giving.
- Investment Growth
The assets in your DAF can be invested and grow tax-free. This means that over time, your charitable giving potential can increase, allowing you to make a more significant impact.
- Simplicity and Convenience
Camber’s DAF simplifies record-keeping by consolidating all your charitable giving into one account. This can save you the hassle of keeping track of multiple donations and receipts.
- Family Philanthropy
Your DAF can be a powerful tool for involving family members in philanthropy. You can name successor donors to your DAF, allowing your charitable legacy to continue beyond your lifetime.
Use Cases for Donor-Advised Funds:
- Planned Giving
If you have a strategic approach to your philanthropy, your DAF can help you plan and execute your charitable goals. You can create a giving plan, set funding priorities, and involve family members in decision-making.
- Tax Planning
For individuals looking to maximize their annual tax benefits, Camber’s DAF offers a convenient way to make a large charitable contribution before December 31, ensuring you receive the tax credit for that year.
- Controlling the Purse Strings
Camber’s DAF allows you to control when and where your support goes. If you want to support a charity with regular donations, your DAF allows you to provide ongoing support through periodic grants, ensuring the organization receives steady financial support. If your philanthropic interests change over time, you can redirect your support to those charities that better align with your vision.
- Donating Appreciated Assets
If you have stocks or property that have increased in value, contributing them to the DAF can help you avoid capital gains taxes while receiving a tax credit for the fair market value of the asset.
Things To Keep in Mind
- Irrevocable Donations
Once you donate to the DAF, you can’t take the money back. Make sure you’re committed to giving it away.
- Fees
Many DAF providers charge administration fees of more than 1%. Camber’s DAF administrator, Charitable Impact, keeps their fees low making more money available for your charities:
- First $1MM -50bps
- Next $1MM+ -25bps
- Timing
Charitable tax credits can only be carried forward for up to 5 years. If you can’t use the tax benefits immediately, or over that period, it may be best to delay creating your foundation.
- Charities Must Be Registered
Your distributions must be directed to registered charities only.
Conclusion
A Donor-Advised Fund is a great tool for Canadians who want to make their charitable giving more effective while getting tax benefits. By understanding how DAFs work and what to watch out for, you can make smart decisions and maximize your impact. Whether you’re just starting to give or are looking to simplify your donations, Camber’s DAF can help you achieve your philanthropic goals.
Talk with Camber today to set up your Donor-Advised account.
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