One of the greatest legacies you can leave is through charitable giving in your will. The vast majority of Canadians give to charity every year during their lifetime. In Alberta, the percentage of people making gifts to charity every year is the highest in Canada. However, less than 7% of Canadians leave a gift to charity in their will. This despite the fact that your life is now over and you no longer have any expenses.
On top of that, there are tax advantages for charitable gifts that can make the gift far less expensive than the actual dollars donated to the charity. During your lifetime you can claim charitable tax credits in the year of the donation and you can also carry that forward into future years. In the case of a deceased individual, obviously there is no ability to carry tax credits forward to a future year. Instead, the Income Tax Act allows you to deduct the full eligible amount of any charitable gift against 100% of the deceased’s net income in the year of death. Any unused part of these gifts can be carried back up to 100% of the deceased’s net income for the preceding year. This can generate substantial tax credits to the estate. The ultimate beneficiaries of the estate will therefore see a reduction in the amount they receive which is much smaller than the total amount of the actual gift.
When looking at charities, one of the best reviews I have found has been assembled by Money Sense magazine. You can find their 2012 review of the top 100 charities in Canada by clicking on the following link: www.moneysense.ca/2012Charity100. Once there, you will find an analysis of how much each charity spends on their programs and how efficiently they raise funds. You can also check the amount of compensation they provide to their management. Each charity is then given a grade based on their financial performance.
In the Edmonton area, I highly recommend checking out the Edmonton Community Foundation. This organization acts as an umbrella for a large number of charitable pools. They have a stellar track record of prudent financial management. Through the foundation, you can direct your gift to the area of your choice. You can even create your own fund with very specific criteria. For more information check out their website at www.ECFoundation.org