E. GIFTS OF CASH, INCLUDING MEMORIAL FUNDS

The cash gift is the traditional and familiar form of charitable giving. The Community Foundation of the North Okanagan will issue an income tax receipt promptly after the gift is received. Donors may then, to a limit of 75% of their taxable income within certain limits, obtain a tax credit.

• Lump Sum Gifts

Donations that exceed the 75% threshold can be deducted for tax purposes over the next five years – for a total of six years. Donation receipts can also be saved for up to five years and then used all at once to maximize tax savings. However, the latter option should only be chosen if the donor is sure that the entire amount can be used as if the donation receipts are not used within the time limit, they will be lost as a tax savings vehicle.

• Annual Gifts

An annual cash gifting program can be a tax savings option for an elderly person who has plans to make a large charitable donation upon his or her death. If the gift is saved until the donor dies, the charitable credit cannot be applied backwards the same way it can be applied forwards (see Section E: Gifts Made Through Wills). All cash gifts are added to the capital base (or endowment) of the Foundation.

In either of the above situations, a donor making a cash gift to the Community Foundation of the North Okanagan may direct it:

1. To the Foundation generally;
2. To a particular charitable purpose;
3. To an existing fund within the Foundation;
4. To establish his or her own fund - either immediately, or with a series of payments. In order to keep administrative costs down, an aggregate contribution threshold of $5,000 is required in order to establish a separate fund. Once a fund is established, it receives permanent recognition in the Foundation’s Annual Report.

   A Memorial or Named Fund within the Community Foundation of the North Okanagan is a particularly effective way to marshal cash gifts. After a relative’s death, instead of directing friends to make a small donation to the charity of your choice, the family can direct donations to the Named Fund within the Community Foundation of the North Okanagan. If it is to become a new named fund, a pledge by the estate or interested party to top up the contributions to the $5,000 minimum is required. The deceased receives permanent recognition (the capital is maintained in perpetuity in a fund named for him or her). The family has the option to specify how the distributions of the fund are to be directed, and continue to be involved in the annual allocation of the distributions.

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Technical Reference
Canada Customs and Revenue Agency: IT-110R3 Deductible gifts and official donation receipts