Opting for Charity Over Taxes and Supporting What Matters to You"
When I think back to reading the book "Would You Rather" to my kids, it reminds me of the choices we face as business owners when selling our businesses or investment properties. We are presented with a real-life version of "Would You Rather": write a cheque to a charity or write a cheque to the government. While it may seem like a no-brainer, many business owners continue to opt for the latter. This article will explore the importance of leaving a legacy, the benefits of donating to charities, and how you can maximize your impact through charitable giving.
Is Legacy Important to You?
Legacy is a concept that holds different meanings for different people. It can be a tangible item or an intangible impact on the world. Regardless of how you define it, your legacy reflects your values and shapes how you'll be remembered. Leaving a legacy of kindness and compassion becomes crucial if you aspire to make a difference. Moreover, your legacy lives on long after you're gone, ensuring that your memory endures.
Leaving a Legacy to a Charity:
There are compelling reasons to choose a charity as the recipient of your legacy over the government. Charitable organizations are adept at utilizing funds effectively, with lower overhead costs and streamlined distribution processes. This means that more of your money goes directly to those in need. Additionally, charities possess in-depth knowledge of the issues they tackle and can target their assistance accordingly. By supporting a charity, you build a stronger community and create lasting change. The impact of your legacy resonates in the lives of those who benefit from the charity's work.
Furthermore, leaving an ongoing contribution in the form of an annuity ensures the long-term viability of the supported organization. You may also receive recognition, such as a plaque or the naming of a building or park, which ensures your legacy continues to inspire. On the other hand, writing a big cheque to the government offers no such commemoration or lasting impact.
Making the Most Impact on Your Charity:
To ensure your donation has the greatest charitable impact, there are a few factors to consider:
Research the organization: Ensure that their mission and work align with your charitable goals, allowing you to make a more informed decision.
Consider the size of your donation: A large donation to a smaller organization can significantly impact a small donation to a larger organization. Assess where your contribution can create the most substantial change.
Determine how you want your donation to be used: You can earmark funds for a specific program or project or provide flexibility for the organization to allocate resources where they are needed most. Tailoring your donation to the charity's specific needs maximizes its effectiveness.
Understanding the Efficiency of Charitable Giving:
The way you give can be just as important as the amount you give. Donating cash, debit, or credit card payments is the least efficient method. Instead, consider donating marketable securities or a life insurance policy to increase your contribution while minimizing costs. Donating corporately rather than personally can also yield greater tax credits, benefiting both the donor and the receiving charity. By exploring these alternative methods, you can make a more meaningful difference to the causes you care about.
Conclusion:
With capital gains taxes on the rise, it's essential for business owners considering selling their businesses or investment properties to explore the various ways of contributing to charitable organizations. By converting capital gains into charitable giving, you benefit philanthropic causes and build a meaningful legacy and enjoy financial advantages. Remember, the choice between writing a big cheque to your favourite charity or the government ultimately determines the impact you leave behind. Choose wisely and make a lasting difference.
