US-Canada Charity Archives - Charity Exchange

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.

_{Legal Notice: Opinions in this blog post do not reflect the opinion or endorsement of Charity Exchange or its affiliates. The opinions in this post should not be used as legal or financial advice for any financial decision. The advice or opinions shared in this blog post are solely those of the author and are not the opinion of Charity Exchange or its affiliates. For legal or financial advice, always consult with your financial advisor or legal council.}

The post What is a Donor Advised Fund? appeared first on Charity Exchange.

Global Donation Matching 101

Admin — Mon, 08 Mar 2021 17:30:04 +0000

How does global donation matching work?

In short, a donor’s gift is matched with another donor’s gift either a private donor, a business, corporation or a charity to double the donation amount. However, global donation gift matching can take on different forms depending on who is offering the program.

Business and corporations
When a business or corporation offers a donation matching program the business is seeking to encourage philanthropy and increase charitable spirit amongst their staff and employees. It also helps charities maximize the charitable income in a creative way. https://doublethedonation.com/ explains how the global donation matching program works with corporations.

Private Donors
Charities create matching donation campaign in partnership with private donors. The goal of the charity is to effectively double the impact of an individual gift. It allows both the donor and others to support the charity. The donor commits to a specific donation amount that is matched by other community donors. The benefits to the charity and donor is an increase in donation revenue and the expansion of their donor base. https://www.charidy.com/ is an online platform that helps charities and donors create matching campaigns.

Charitable foundations and non-for-profit
Charitable foundation looking to help charities offer charitable grants in order to match donations dollar-for-dollar for the duration of a fundraising campaign.

Donor Advised Funds
Charity Exchange offers a unique donation matching program for global donors. Many donors, when donating to a global charity, cannot benefit from a tax deduction if the charity is not located in their home country. Charity Exchange helps donors create a global charitable matching gift that can offer a local tax deduction for their donation. The program matches 2 donors in different countries. Each donor makes a charitable donation to a charity in their home country. The charity in their home country is chosen by the donor in the other country. To learn more about charity Exchanges matching donation program click here.

Read about other donation matching programs in this article by https://recharity.ca/matching-gifts-guide/

The post Global Donation Matching 101 appeared first on Charity Exchange.

US-Canada Income Tax Treaty for Charity

Admin — Thu, 25 Feb 2021 18:16:52 +0000

In 1980 the U.S. and Canada have entered into a mutual agreement. The agreement was named The US-Canada Income Tax convention.

Under the terms of the United States-Canada Income Tax Treaty agreement, recognized religious, scientific, literary, educational, or charitable organizations that are organized under the laws of either the U.S. or Canada will automatically receive recognition of exemption without application in the other country.

U.S. organizations must be recognized as exempt under section 501(c)(3) of the Code in order to qualify for this treatment. Similarly, Revenue Canada must recognize Canadian organizations as Canadian registered charities. Recognized charitable organizations resident in one country will be eligible to receive deductible charitable contributions from residents of the other country.

The treaty provides limited tax benefit to individuals residing in one country with income in the other country.

To read the full treaty click on the link to the Canadian Government website and here for the US Government website

The post US-Canada Income Tax Treaty for Charity appeared first on Charity Exchange.