donor advised fund Archives - Charity Exchange

Disbursement quotas for Charities

YV — Thu, 21 Oct 2021 20:30:50 +0000

CRA to review the “disbursement quota” for charities

The “disbursement quota” for charities is under review by the CRA. The “disbursement quota” rule, contained in the Income Tax Act, has been applied since 1976 to the assets of charities not used for charitable activities or administration, which are most often endowments. It requires charities to spend a minimum amount each year on their own charitable programs or on gifts to qualified recipients.

The purpose of the quota is to prevent undue accumulation of these assets and to ensure that assets are disbursed for charitable purposes and activities. The current quota applies mostly to charities that are foundations, which follow a model of annual distribution of grants to other charities, in amounts ranging from the mandated minimum 3.5 per cent of capital assets set by the disbursement quota to four per cent or more, depending on a foundation’s approach. The current minimum was set in 2004 and has not been reviewed publicly since then. Most foundations, both private and public, have met or exceeded the minimum and the flow of charitable giving has steadily increased over the last 15 years as more donors create foundations or donor-advised funds.

Finance Canada stated, in a background paper released this summer, that an “effective disbursement quota should also ensure that adequate funding is available to support the current needs of the charitable sector”.

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University Alumni living in Canada donating to US Organizations.

YV — Tue, 08 Jun 2021 16:18:30 +0000

The top 20 universities in the United States are Harvard University, Stanford University, Massachusetts Institute of Technology (MIT), University of California, Berkeley (UCB), Columbia University, University of California, Los Angeles (UCLA), Yale University, University of Pennsylvania, Princeton University, Cornell University, New York University (NYU), University of Chicago, Duke University, Johns Hopkins University, University of Southern California, Northwestern University, Carnegie Mellon University, University of Michigan, California Institute of Technology (Caltech), Brown University.

There are many Canadian residents who are expats or are alumni of Universities or Colleges in the United States. At times the university, college or community organization in the US hold fundraisers and the expat or alumni seek to donate and or support their cause. Often the question of receiving a Canadian tax-deductible receipt for the donation to the charity in the US is discussed and explored.

For example, alumnus of Harvard University, Stanford University or Massachusetts Institute of Technology (MIT), who are living in Canada and want to support their former school with a donation of $10,000. When sending the donation directly to the American institution, the university may issue a US tax-deductible receipt. However, the former student is currently residing and working in Canada and the US tax-deductible receipt offers no tax benefit or deduction on their tax return.

Charity Exchange offers a solution that can help alumnus in Canada of US educational institutions make a US tax-deductible donation to the Canadian institution through their donation matching program. The donor signs up for a charity exchange donor advised fund account and makes a matching donation using the global matching donation platform. The donations is matched with donors in the US and the US charity or institution receives their donation from the US Donor Advised Foundation.

To learn more about the donation matching program click here

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Tax-Deductible Donations to Yeshiva or Seminary in Israel, Canada or USA

YV — Mon, 26 Apr 2021 17:44:05 +0000

Are you looking to make a tax-deductible donation to a charity abroad?

Would you like to send charitable funds to a Yeshiva, seminary, Shul, Chessed organization, school, camp, or any other charitable organization outside your home country? Do you run a charity and have Donors in other countries who would like to make a tax-deductible donation to your charity?

Charity Exchange Can help! Charity Exchange’s new and revolutionary method of cross border donations can help donors and charities make tax-deductible donations to charities abroad.

Charity Exchange’s charitable foundation and Donor Advised Fund operates in the USA, Canada and Israel. The Foundation offers a Global Donation Matching program. The Global Donation Matching program is a great tool for donors to use when seeking to support charities outside their home country. The benefit of donating to the foundation and using the donation matching program, is that all donations are tax-deductible. Donors receive a tax-deductible receipt for funds deposited to their Donor Advised Fund Account.

How does the matching donation program work?

The concept of the global matching donation program is to pair two (or more) donors from different countries and match their donations. Each donor’s donation supports the other donor’s charity.

Here is an example of how it works.

Justin, from Montreal Canada, wants to make a $1,300 CAD donation to the American Red Cross. Justin sets up an account and creates a $1,300 donation to be matched and sent to the American Red Cross. The donation is pending on the charity exchange platform until a matching donation is found in the USA.

How is a matching donation found?

Joe, from Washington DC in the USA, wants to make a $1,000 USD donation to Feed the Poor Canada organization. Joe creates a $1,000 donation to be matched and sent to Feed the Poor Canada. The donation is instantly matched with Justin’s pending donation to the American Red Cross.

The result, Justin from Canada’s $1,300 CAD donation is sent to Feed the Poor Canada to support Joe’s, from Washington, selected charity. And Joe from Washington $1,000 USD donation is sent to the American Red Cross to support Justin’s, from Canada, selected charity. Essentially the donors exchange donations by making a recommendation (to the Donor Advised fund) to donate their funds to the charity the other donor selected.

To use the service, the donor would need to open a Charity Exchange account and deposit a donation to their Donor Advised Fund account. Once the funds are donated and cleared in the Donor’s account the donor can recommend a donation to any registered charity in the countries Charity Exchange operates in using the matching donation program. Charity Exchange operates in Canada, Israel, and the USA.

Is personal information kept private?

Yes, the donor’s personal information is strictly private and confidential. When a donation match is made and paired with another donor’s donation the donors do not see who they are matched with. Only the receiving charity can see the donor who selected their charity for their donation but not the other donor. Charity Exchange has a strict privacy policy and does not share personal information with any other party.

Are there other unique features offered by Charity Exchange?

Yes. We accept Bitcoin and other Crypto currency donations

Crypto currency donations are an emerging trend for charitable giving. More and more donors are looking to donate crypto to their favourite charities. However, many charities do not have the know how or the tools to accept crypto donations.

Charity Exchange provides a platform for donors and charities to donate and accept crypto currency. Donors deposit their crypto currency into their Donor Advised Fund account and receive a tax-deductible receipt for the fair market value of their crypto currency. Donors then gift the donation to any registered charity in the countries Charity Exchange operates in.

Can Charities Use the Crypto Donate service to accept donations?

Yes. Charities can open a Charity Exchange account and direct donors to their charity profile page on the Charity Exchange platform. Charities can also track the incoming donations and send thank you letters to donors directly from their charity account.

How does Charity Exchange accept crypto currency?

Charity Exchange currently accepts three types of crypto currency, BITCOIN, ETHEREUM and USDC. Donors deposit crypto currency into their Donor Advised Fund account. Once the deposit is complete, charity exchange converts the crypto currency to USDC and redeems the USDC crypto currency for the local fiat currency. In the US it is converted to USD, in Canada to CAD and in Israel to Israeli Shekels. This process helps avoid potential fluctuations in the market and stabilize the value of the crypto currency. It ensure that the charity receive the maximum financial value intended by the donor at the time of the gift. It also allows the donor to put the funds to use immediately.

To sign up or to learn more about the matching donation program or crypto donations visit www.charity.exchange

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What is a Donor Advised Fund?

Admin — Thu, 01 Apr 2021 20:30:28 +0000

What is a Donor Advised Fund?

Many donors and individuals are turning to donor-advised funds (DAFs) to assist with their charitable efforts. There has been an explosion in the use of DAFs, which are funds set up for charitable purposes that can facilitate large donations.

Donor-advised funds are registered charitable foundations that are funded with cash, securities, or other assets. All the contributions are put into an account in the donor’s name, which is held by a DAF sponsor and eventually donated to a charity of the donor’s choosing.

Donors can take a current tax deduction for contributions made to the fund. This is an important feature because it allows a donor to take a tax deduction for all contributions at the time they are made, even though the money may not be dispersed to a charity until much later. This incentivizes donors who need a tax deduction to donate now and then decide where the money will go at a later time when it’s convenient.

DAF’s are very well-equipped to convert appreciated securities or other tangible assets into cash.

The ability to do this can enable many folks to give a larger amount than they would otherwise. For example, a donor with 10,000 shares of Google with a very low-cost basis can hand this over to a DAF and take an immediate deduction for the full value of the donation (subject tax law limitations).

If they wanted to do the same for a local woman’s shelter, they would have to sell the stock and pay the capital gains tax on the sale.

Donor-advised funds can provide donors with an immediate tax deduction for funds that may not actually be distributed to a charity until months or years later.

Charity Exchange is a charitable foundation that operates as donor advised fund. To learn more visit our DAF FAQ page.

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Considering Cryptocurrency Donation

Admin — Fri, 19 Feb 2021 18:29:14 +0000

Why consider donating cryptocurrency?

Cryptocurrency donations are an emerging trend for charitable giving. More and more donors are looking to donate crypto to their favourite charities. In 2019 Anne Connelly published a report on the landscape of cryptocurrency donation across Canada. The report suggest that in 2019 only 4% of Canadian charities accepted donation in cryptocurrency. However, the survey showed that 29% of donors have donated cryptocurrency to charity. So, the crypto donation trend is on the rise.

Can one donate Crypto to charities that do not accept Crypto?

The short answer is yes. Charity Exchange can help increase the accessibility for donors and charities to donate and accept cryptocurrency donations.

Charity Exchange accepts Cryptocurrency donations from donors. Donors can deposit their crypto donations into their Donor Advised Fund account and receive a tax-deductible receipt for the fair market value of their cryptocurrency. Donors can then (recommend and) gift the donation to any registered charity in the countries Charity Exchange operates in.

Charites can also open a Charity Exchange account and direct donors to their charity listing page and accept cryptocurrency donations through the Charity Exchange platform.

The process of how Charity Exchange accepts cryptocurrency.

Charity Exchange users can deposit cryptocurrency into their Donor Advised Fund accounts. The fund currently accepts three types of cryptocurrency, BITCOIN, ETHEREUM and USDC.

Once the crypto has been deposited to the user’s account, charity exchange converts the currency to USDC and redeems the USDC crypto for the local fiat currency. In the US we exchange it for USD, in Canada for CAD and in Israel for Israeli Shekels. This process helps avoid potential fluctuations in the market and stabilize the value of the cryptocurrency. It ensure that the charity receive the maximum financial value intended by the donor at the time of the gift. It also allows the donor to put the funds to use immediately.

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