Community foundations and your legacy
Most of us don’t approach the task of preparing a will with great enthusiasm, but instead with the sober realization that we are taking steps to make life easier for our loved ones after we are gone. As we engage in estate planning, we consider many factors—personal, legal and financial—in order to ensure that the transfer of assets will proceed according to our wishes and with minimal complications.
A will can also be a powerful instrument that allows us to support and preserve the ideals, causes and charities that are important to us. According to Will Power, an education campaign designed to inspire and empower Canadians to leave a bequest to charity, only 5 per cent of us do so. Yet, imagine what our favourite charities could accomplish if more Canadians left them a small bequest. And it’s not only charities that benefit; charitable gifts made in a will can reduce the amount of taxes levied against your estate.
If you are considering leaving a charitable bequest, it’s well worth having a closer look at your local community foundation. More than 90 per cent of Canadians are served by a community foundation, with a national total of 191, and British Columbia leads the country with 49.
Community foundations are charitable, non-profit organizations that serve geographically defined communities, building endowment funds in order to give grants to projects that improve the local quality of life. Community foundations are governed by local boards and generally supported by donations pooled from within the community. They vary greatly in size and scope, from the Vancouver Foundation, which makes a huge impact province-wide, to foundations operating on a much smaller scale, offering targeted grants that build healthier and more livable communities.
“All community foundations are true examples of neighbours helping neighbours,” says Kate Merry, Salt Spring Island Foundation board member and chair of the Donor Relations Committee. “Many rely on volunteers to do much of their work, which means that they maintain strong grassroots connections to their communities.”
Endowment funds allow community foundations to assist with long-term needs, such as mental health support, affordable housing, food security and community infrastructure, as well as projects in many other areas. But community foundations also support funds that meet immediate needs, which has been critically important to the survival of charities during the COVID-19 pandemic. With deep community connections, they partner with donors and other local organizations to encourage community action, stimulate new ideas, build participation and strengthen philanthropy.
Community foundations offer personal and flexible service, helping donors to meet their goals while offering tax advantages. If you choose to leave a legacy to a community foundation, you can specify that it be pooled with other gifts in a permanent endowment fund or spent within a shorter period of time.
Grants given by community foundations generally assist a wide range of initiatives, but there are also field of interest funds that address specific areas—children and youth, arts and culture, the environment and mental health, to name just a few. Depending on the amount of your bequest, you may be able to designate a field of interest fund or even a specific charity as a recipient. Alternatively, you can allow the community foundation to choose where your funds can best meet a pressing community need.
Kate Merry offers a few tips for those considering a legacy to a community foundation:
• Meet with representatives of your community foundation to learn more about their work and to ensure that gifts are structured in the best possible way to fulfil your wishes. Each community foundation has its own policies and guidelines. Community foundations will also provide sample clauses for your will to use in consultation with your advisors.
• Discuss your plans with your financial and legal advisors to ensure that you will benefit from maximum tax advantages. This could include the option of naming a charity as a beneficiary of your RRSP, RRIF or TFSA.
• Discuss your plans with your family. This will make your future wishes clear and more likely to be implemented without challenge, and it involves your partner, children, grandchildren or other beneficiaries in your philanthropic goals.
The COVID-19 pandemic has reinforced the importance of a healthy and caring community. We all benefit from strong and resilient local infrastructure and charities that assist with medical, social, environmental and food security needs. Many of us now work where we live. Community foundations offer the opportunity to give where we live and to leave an enduring legacy for future generations.
To find your local community foundation to speak to about your legacy, visit communityfoundations.ca/find-a-community-foundation.