For many people, the holiday season is a time for giving and that means getting charitable. Canadians are known for their generous spirit and many will happily head to the soup kitchens, donate gifts and make a pledge.
While all this should be encouraged, advisors should also be talking to their clients about making monetary donations.
Jackie Porter is a planner with Carte Wealth Management. She says, aside from it being a wonderful thing to do, there are a few other reasons advisors should be talking charity.
“At this time of the year it allows for a reduced tax bill if donations are made before the end of the year. Also for people who have never given before there is a new donors tax credit that gives additional tax benefits to donors who are giving for the first time.”
This means that while the act of giving can be truly selfless, making a donation can also reduce clients’ tax bills. As the end of 2015 approaches, there isn’t much time left to gain tax credits.
As it stands, donations made to registered charities are eligible for tax credit and this can affect tax bills.
These conversations can also allow advisors to tap into what charities clients care about, their own legacy as well as their tax bill.
“Charitable giving opens the conversation for me to start encouraging clients to be more deliberate in planning their tax bill and organizing their estate. Fruitful conversations about creating a legacy and determining how they would like to be remembered can come out of a thoughtful donation strategy.”
It could be that clients would like to leave money behind for a worthy organization or want money donated in their name. Talking about charity can lead to these necessary conversations that allow planners to provide a more substantial plan for a client factoring in all of their goals.
While such conversations can be useful to advisors, it should not detract from the idea that giving to charity is a wonderful thing and that regardless of tax or legacy, it’s a good thing for advisors to encourage clients to do.
Porter doesn’t think enough Canadians donate in significant way. While this could be lack of thought or resources, Porter says she’s talking to all of her clients to learn more about charities they are passionate about so that she is able to help incorporate them into a long-term strategy.