The Anglican Church of Canada, along with other churches and charities in Canada, will benefit substantially by the elimination of the capital gains tax on donations of publicly listed securities as announced in the May 2 Federal Budget. The provision is effective immediately.
The federal Department of Finance estimates this step “will help create a donations pool of about $ 300 million annually that can be used to support worthy charitable causes and projects.” It is expected to cost the federal treasury about $ 50 million annually in foregone revenue.
“This will be a fabulous measure for communities and charities,” says Monica Patten, chair of General Synod’s Financial Management and Development committee. Ms Patten is also chief executive of Community Foundations of Canada, a national network of public foundations which provided $ 115 million in grants to charities last year. The network has been lobbying Ottawa to eliminate completely capital gains taxes on securities donated to charity as a way to encourage greater giving.
“There’s sound rational for expecting a jump in donations corresponding to greater tax breaks,” Ms. Patten said in a pre-budget statement to Canadian Press. When the former Liberal government in 1997 reduced by half the capital gains tax applied to stock donations, the value of such gifts tripled in the following three years. The percentage of stock contributions as gifts almost tripled, from 1.6 per cent of total donations to foundations in 1997 to 3.9 per cent by 2000. “The numbers have risen still more since then,” says Ms. Patten. Churches and other charities have reported similar gains.
“We have continued to see a significant increase in giving from donors who had shares that had realized gain….for charity and for a good tax break. Eliminating the tax, previously 25 per cent of the value of the capital gain, will encourage even more donations,” she says.
Canadian Press reported that “while high-income donors would be the most obvious beneficiaries of the tax break, Prime Minister Stephen Harper has argued they’re not the only winners.”
“The real beneficiary of this particular measure are charities themselves,” Mr. Harper said during last winter’s election campaign, where he first pledged to cut the capital gain tax on gifts of listed securities. “What is happening here is not only a transfer of income, but a transfer of wealth from individuals who are fairly well off, to charities. I think this is a very positive thing for everybody involved.”
Ms. Patten agrees, suggesting communities also benefit when their churches and charities are well-funded.
Archdeacon John Robertson, national gift planning officer of the Anglican Church, expressed his delight by the announcement. He urged diocesan finance officers, gift planning consultants, clergy and wardens to encourage gifts of listed securities for parish and diocesan ministry and program, along with support for General Synod’s Letting Down the Nets initiative, Council of the North and its work with partners overseas.
Included in Archdeacon Robertson’s ever-growing list are General Synod’s Canadian partners — the Anglican Foundation, The Primate’s World Relief and Development Fund, the Anglican Journal, with Anglican-related theological colleges, and fund-raising efforts of dioceses which are nearing completion of their support for the Residential Schools Settlement Fund.
“Offering gifts of listed securities would go a long ways toward providing wonderful and generous support for these essential programs, ministries and projects. In addition, the donor would receive more than just relief from tax owing on capital gains, as was the case before May 2. He or she would now receive a donation receipt which would offer a full tax credit for the value of the securities contributed,” Archdeacon Robertson said.
He suggested that donors, parish clergy and lay leaders contact their diocesan financial officer or gift planning consultant to ensure the listed securities are properly transferred. Tax benefits will be greater when securities are transferred to the church rather than cashed in by the donor with simply the proceeds being donated.
Parish or diocesan officials who have questions about appropriate procedures are invited to contact Archdeacon Robertson or General Synod Treasurer Peter Blachford for assistance.
For more information contact –
Archdeacon John M. Robertson
National Gift Planning Officer
General Synod of The Anglican Church of Canada
80 Hayden St., Toronto, ON M4Y 3G2
Telephone 416.924.9199 ext 268
Email: [email protected]
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