Philanthropic Legacies

What is the best way to structure my charitable giving that allows me to create a meaningful legacy?

After building wealth and success throughout your career, you want to give back to a charity you support, maybe one that made a difference in your life. It could be a hospital or a charitable foundation researching an illness that has affected you and/or your family. It could be a summer camp you attended as a child that helped shape the person you are today.

A legacy is a heartfelt gesture that allows you to give back for years – even decades – after you’re gone.

Traditional Charitable Giving

There are many traditional ways to leave a gift to a charity.  These include making a donation in cash, leaving an endowment through your will or a trust, designating a charitable organization as the beneficiary of your RRSP, RRIF or TFSA; or through the gift of a physical asset like fine art.

Donating Life Insurance

You can also create a legacy using life insurance, where the beneficiary is a charity or charitable foundation of your choice. This allows you to make significant charitable donations while you enjoy the tax benefits and enhance the value of your estate.

To learn more about the ways Life Insurance and Donor Advised Funds can be used to create a philanthropic legacy, click on the topics below.

  • Beneficiary Gift  
    You name the charity as the beneficiary of your life insurance policy but retain ownership and continue to pay the premiums. When you pass away, your estate receives a charitable donation tax receipt for the life insurance proceeds paid to the charity.
  • Gifting a new life insurance policy to a charity  
    You apply for a new permanent life insurance policy. Once the policy is approved and in force, you transfer the policy’s ownership and beneficiary to the charity. You continue to pay the annual premiums and receive a tax receipt for that amount. When you pass away, the charity (as the beneficiary) receives the life insurance proceeds tax-free.
  • Gifting an existing life insurance policy to a charity  
    You transfer the ownership and beneficiary of an existing in-force life insurance policy to the charity of your choice. You continue to pay the annual premiums and receive a tax receipt for that amount. When you pass away, the charity (as the beneficiary) receives the life insurance proceeds tax-free.

This option is available through certain charitable foundations and gives donors and their families control over how their charitable donations are made.

In Canada, there are more than 5,000 charitable foundations registered with Canada Revenue Agency. Many are structured as neutral channels or “bridges” for flowing funds to registered Canadian charities from qualified donors, thereby simplifying the planning and distribution of sizeable philanthropic gifts.

Some of these foundations offer Donor Advised Funds, which are charitable giving accounts that are typically established by individual donors or families. These donors or their designated successors get to specify which charities they want their funds to support.

With a Donor Advised Fund, your legacy can give gifts of income and/or capital. These gifts can have a short-term, transitional purpose (e.g., a specific one-time expenditure), or they can be structured as a perpetual endowment.

Mark Levine is well acquainted with charitable giving. He has been a member of the Professional Advisory Committee of The Jewish Foundation of Greater Toronto since 2015.

In 2020, he and his family established a Donor Advised Fund to make annual gifts to Sick Kids’ Hospital as well as other charities that he and his family are passionate about.

Let us help you understand tax-effective strategies available to create a philanthropic legacy that can make an impact for generations to come.

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I have worked with Mark Levine since 2005 for my life insurance and estate planning needs. He has always understood my needs and tailored products to accurately accomplish my goals through a combination of different products. His knowledge of tax and family law have therefore been a great asset for me. At all times, he has responded quickly to my requests. It has been a pleasure working with Mark and his team at Integrated Financial Strategies. I do not hesitate to recommend him to anyone looking for his special type of expertise.

Mark Franklin President, Saand Inc.