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Tag: finances

Effective donating strategies

Effective donating strategies

Incorporating charitable giving into our lives is not just a philanthropic act; it’s a value deeply ingrained in Jewish tradition. With recent events underscoring the importance of such contributions, it is prudent to explore various giving strategies available in Canada.

Cash Donations

One of the most common ways to give is through cash donations. This straightforward method allows organizations to use the funds to further their operations, while offering valuable tax savings to donors.

image - Table 1: Two Examples of the Tax Benefits of a Donation Based on Living in BCCash donations to registered charities provide a tax credit both provincially and federally. The tax benefits of the donation are based on the donation amount and the marginal tax rate. To keep things simple, Table 1 shows two examples based on living in British Columbia.

In-Kind Donations

Non-cash donations are equally essential for charities, depending on the services and programs they offer. These contributions encompass tangible goods or services, such as clothing, food, furniture, books and medical supplies. Much like cash donations, in-kind donations can make donors eligible for a tax deduction. The value is determined based on the fair market value of the donated goods and services.

In-kind donations in the form of securities or stocks offer a popular and tax-advantageous way to contribute to charitable causes. To qualify for these favourable tax benefits, the donated securities must be listed on a designated stock exchange in Canada. Generally, publicly traded stocks and certain mutual funds meet this eligibility criterion.

The value of the donation is determined by the fair market value of the securities at the time of the donation. An important feature of this method is that the donation itself is exempt from capital gains tax on any accrued capital gains. This means that, if your securities have appreciated in value since you acquired them, you can donate them without incurring capital gains tax on the increase in value.

There is a limitation to consider: you can claim donations of securities for up to 75% of your net income in the year you make the donation. However, any donations exceeding this limit can be carried forward for up to five years. This flexibility allows you to maximize the tax benefits over time, ensuring that your charitable giving aligns with your financial situation.

Donor-Advised Funds

One powerful strategy for charitable giving that warrants further exploration is the use of donor-advised funds through a CRA-registered foundation such as the ZLC Foundation or the Jewish Community Foundation. These funds provide a structured and effective approach to managing and maximizing your philanthropic endeavours, making them an excellent choice for those interested in creating an endowment. By establishing a donor-advised fund, you can exercise a greater level of control and intentionality in your charitable contributions, ensuring that your giving aligns with your values and long-term goals.

Life Insurance

Using life insurance policies to contribute to a charitable organization offers a meaningful way to leave a legacy. While this method differs from the others discussed here, it provides a substantial, long-term benefit. Life insurance policies can be set up to benefit a charity in several ways:

  1. Donating a policy. You designate the charity as the beneficiary while continuing to pay the premiums. Upon your passing, the charity receives the death benefit, and your estate may be eligible for a charitable donation tax credit.
  2. Purchasing a new policy. The charity becomes the revocable beneficiary, receiving the same benefits as in the previous option. You can also transfer ownership to the charity, allowing premium payments to receive tax benefits while you’re alive.
  3. Donating dividends and interest. For whole life policies, you can redirect dividends to cash, which can then be donated to the charity of your choice.
  4. Canada Life My Par Gift. Canada Life recently introduced an innovative participating life insurance product designed for charitable giving. Here’s how it works:
  • A one-time premium payment by the donor.
  • The charity owns and is the beneficiary of the policy, issuing a tax receipt to the donor for the premium paid.
  • This policy, unique to participating life insurance, offers potential dividends, flexibility in dividend options, and cash value growth without tax implications.
  • In the event of the insured’s passing, the charity directly receives the payout. Canada Life My Par Gift policies are exclusively owned by registered Canadian charities, providing a simplified and impactful way to make a significant charitable contribution.

This array of giving strategies not only empowers individuals and organizations to make a difference but also reinforces the values that are central to Judaism. The power of giving back is one of our most enduring strengths, allowing us to face challenges with compassion and purpose.

Philip Levinson, CPA, CA, and Brent Davis are associates at ZLC Financial, a boutique financial services firm that has served the Vancouver community for more than 70 years. Each individual’s needs are unique and warrant a customized solution. Should you have any questions about the information in this article, visit zlc.net or call 604-688-7208.

Disclaimer: This information is not to be construed as investment, legal, taxation or account advice, nor as an offer to sell or the solicitation of an offer to buy any securities. It is designed only to educate and inform you of strategies and products currently available. The views expressed in this commentary are those of the authors alone and are not necessarily those of ZLC Financial or Monarch Wealth Corp. As each situation is different, please seek advice based on your specific circumstance.

Posted on October 27, 2023October 26, 2023Author Philip Levinson and Brent DavisCategories LocalTags charity, donation, finances, taxation

Multiple membership models

Years ago, I briefly served on a synagogue board and did some research into membership dues. Some congregations had flat rates. Others had scales according to income or age. Others had no set dues, members gave according to what they felt they could give, with the congregation merely offering suggested amounts. There are plenty of articles on this topic, and even a book by rabbis Kerry Olitzky and Ari Olitzky. Synagogues cost money to run: salaries, buildings and activities are expensive. If we want Jewish life to continue, we need to consider this because synagogues offer us education, community, lifecycle events and more. However, there is no one size fits all when it comes to membership models.

Just as there are many models for dues, there are different ideas about new members. Some congregations post their membership application forms online and indicate where to submit the finished paperwork. Others offer membership information via email or post when it’s requested. Still others insist that the potential congregant meet with the executive director to gain access to the paperwork or the requirements for membership.

My husband and I have moved a lot in nearly 25 years of marriage. That has included “shul hopping” within communities sometimes. We’ve formally belonged to seven congregations, and attended services at many other places. Our experience hasn’t been limited to one North American movement. Due to our families’ diverse affiliations, geographic limitations and shifting needs, we’ve been members at Reform, Conservative, Modern Orthodox and unaffiliated congregations. We joke, when asked, that “we get around.”

All this resurfaced while I read about Toronto Congregation Beth Tzedec’s recent experiment with membership. This congregation saw that members under age 40 paid only 5% of their total operating income. By waiving dues for members under 40, Beth Tzedec gained 900 members in eight months, according to a recent JTA article. This remarkable leap in membership shows just how much of an obstacle membership dues are for many younger Jewish people in Canada.

For years, when I joined a congregation in a new place, I was asked to join committees, lead services, teach, volunteer or provide other services. Only very rarely did any of these congregations ask first, “What can we do to meet your needs?” or “What are you hoping to gain from this experience?” While it sounds crass to see this as a solely “transactional” experience, it can be painful to spend a lot of money to support a place that sees no obligation to create a relationship or a meaningful experience with its new and/or younger members.

Few congregations have new members start by meeting with a rabbi or cantor or other engagement professional. The first interaction is almost always with an executive director who is essentially asking, “How much can you pay us?” While congregations almost always state that they don’t turn down anyone due to lack of funds for membership, in practice, many people are turned away. They’re turned away or turned off because they don’t even make the embarrassing first appointment where they must admit they cannot afford the full costs of membership.

We just signed on the dotted line at a big, established congregation because our twins are nearing b’nai mitzvah age. We’ve been regular synagogue attendees for years. We had asked about membership when I was pregnant and, at the meeting with the executive director, we felt as though we were being interviewed to join a country club. As older first-time parents, we saw the membership cost was delineated by age and we fell into a more expensive category. Our roof was leaking, we were expecting twins. Our decision was easy – we fixed the roof. Synagogue membership could wait.

Over the years, we briefly joined two other congregations to access their educational opportunities or community events. In the end, though, we faced the same process over a decade later, with a different executive director. He told us that no one was turned away. However, the paperwork indicated that, unless we paid the building fee plus membership dues plus b’nai mitzvah charge, we couldn’t have a lifecycle event at the congregation. That upfront cost was about 4% of our gross annual income, which is a large chunk of change. That’s before paying for a Kiddush luncheon or family celebration.

There’s no one answer to this challenge. Here are some ideas based on our anecdotal experience.

Make synagogue membership paperwork and financial information easily available on a website or via email. It shouldn’t be a secret, offered only in a face-to-face meeting with the executive director. This isn’t a good first impression. Potential members might also want to meet with a rabbi, cantor or other professional rather than the executive director.

Second, consider a membership model that provides multiple options based on income rather than age or a flat fee. There will always be older members who earn less income and younger people who can afford more.

Third, create an environment where members will not begrudge further donations. If the membership fee is a suggestion, and is affordable enough so that people can manage it, then a happy member may want to donate more money in the future. A supportive congregation and positive community experience is worth a lot!  Members who sense that level of support are willing to pay for it.

Finally, recognize that many “middle-class” incomes don’t cover the cost of living the way they used to. Due to inflation, a professional who, for instance, works as a teacher or at a nonprofit may not have much expendable income. Find ways in which professionals might volunteer hours in lieu of part of their membership fees. Despite education and experience, these professionals have often been asked to volunteer for work in a Jewish context that one would have paid for elsewhere. They pay for membership that they perhaps couldn’t afford – for the privilege of also volunteering expertise.

We need each other for many reasons. Membership dues are not just for a minyan but also for the building where the minyan meets. Our tradition teaches us that every person is valuable, that embarrassment should be avoided at all cost, and that Jewish communities are essential. Synagogue membership models should reflect those teachings, too.

Joanne Seiff has written regularly for CBC Manitoba and various Jewish publications. She is the author of three books, including From the Outside In: Jewish Post Columns 2015-2016, a collection of essays available for digital download or as a paperback from Amazon. Check her out on Instagram @yrnspinner or at joanneseiff.blogspot.com.

Posted on April 14, 2023April 12, 2023Author Joanne SeiffCategories Op-EdTags continuity, family, finances, Judaism, lifestyle, synagogues

Know that you have options – term insurance can have advantages over mortgage insurance

When you are approved for a mortgage, your lender will typically offer you mortgage insurance. That may seem convenient, but before you say yes to mortgage insurance, you should know that you have other options.

Term insurance is an option that is rarely offered by a lender, but it can do far better in most circumstances. Protecting your mortgage with an individually owned term insurance plan offers better value and more flexibility.

image - Differences Between Protecting Your Mortgage Using Term Insurance vs. Mortgage Insurance
Differences Between Protecting Your Mortgage Using Term Insurance vs. Mortgage Insurance

In addition to the factors mentioned above, it’s also important to highlight that mortgage insurance coverage ends when your home is paid off. A personal life insurance policy is unaffected by your mortgage being paid off and can keep providing you and your family with protection in the years that follow.

In the same way that you decided to use an independent mortgage broker to help secure your customized home financing solution, it’s ideal that you work with a financial advisor to help you find a suitable insurance solution to protect your family. An independent insurance broker can work with you to find the coverage that works for you.

Also, keep in mind that it’s important to consider critical illness insurance in case you become seriously ill or injured and unable to pay your mortgage and other expenses. If you are an employee, your employers may offer critical illness as a benefit for you, but be sure the coverage is sufficient for your needs.

Because everyone’s circumstances are unique, it is important to review your particular needs with a qualified associate.

Philip Levinson and Brent Davis are associates with ZLC Financial.

Posted on October 28, 2022October 27, 2022Author Philip Levinson & Brent DavisCategories LocalTags finances, lifestyle, mortgage
Community support valued

Community support valued

Camp Hatikvah donors are not only helping ensure the quality of the camp but its inclusivity. (photo from Camp Hatikvah)

Camp Hatikvah is well known for its program offerings, as well as its facilities and its spectacular natural setting in the Okanagan Valley. What many people may not know, however, is that the camp is only the place that it is because of community backing. Camper fees cover things like counseling staff, food, insurance and site maintenance. Everything else – including every building and almost every piece of equipment – has been donated by supporters who want to ensure that Camp Hatikvah can continuously improve without passing on the cost of doing so to the young families whose children attend.

Camp Hatikvah was established in 1937. Its donor base understands the unparalleled value and impact of a Jewish camping experience. They know that today’s campers are tomorrow’s Jewish leaders and that a donation is not a gift to just the organization but an investment in the future of the Jewish community.

More than 20% of campers attend Hatikvah’s program with the help of financial assistance and it is estimated that another 25% are on the cusp of needing to do so as well. Donors appreciate that many camp families are struggling with the affordability of Jewish life in Metro Vancouver and want to help control fee increases without the camp having to compromise program growth or site improvements. By funding program enhancements, equipment upgrades or capital improvements, donors are not only helping ensure the quality of the camp but its inclusivity. While summer camps are expensive – and Camp Hatikvah is no exception – it is because of donors that, on a per-day basis, Camp Hatikvah is one of the least expensive Jewish camps in North America.

Donors have also played an instrumental role in getting Camp Hatikvah through the pandemic. Not able to operate in 2020, the camp was facing a financial crisis. Similarly, in 2021, while the camp was allowed to open, it had to dramatically reduce its capacity in order to manage the COVID protocols. The financial toll of both these summers had the potential to financially devastate the organization for years to come. Yet, as they always have, donors stepped in and stepped up immediately – they covered all the financial losses the camp was facing. The level of generosity and support not only got the camp through the financial challenges caused by the pandemic, but also gave the camp a renewed sense of purpose, determination and passion for serving the community.

The board and staff of Camp Hatikvah thank each and every donor who has played a role in helping the camp become – and remain – one of the best Jewish camps. To learn more about the camp’s programs and the donors who make them possible, visit camphatikvah.com. 

– Courtesy Camp Hatikvah

Format ImagePosted on December 10, 2021December 8, 2021Author Camp HatikvahCategories LocalTags Camp Hatikvah, COVID, finances, kids, philanthropy, summer camp
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