Ask the Expert: The Season for Giving

As the year winds down, the season of celebration and generosity invites us to reflect on how we can give back. Whether gathering with family, honouring traditions or planning for the year ahead, it’s an ideal moment to consider charitable giving. We spoke with Michelle Coleman, a tax and estate planning expert at MNP, about why year-end donations are so impactful — and how thoughtful giving can support community needs while helping you achieve your own financial planning goals.

Q&A

Edmonton Community Foundation (ECF): Why is it important to plan charitable donations before December 31?

Michelle Coleman (MC): For individuals in Canada, donations to a registered charity made before December 31 of a particular year qualify for a tax credit on that year’s Personal Tax Return. This credit can be used to reduce taxes payable for that year or be carried ahead for up to f ive years. Aligning your giving with the calendar yearend may make it easier to forecast taxes and cash flow.

ECF: What are the tax advantages of donating publicly traded securities instead of cash?

MC: Donating publicly traded securities directly — rather than selling them and giving the cash — can create significant tax advantages. When you donate securities that have increased in value, you don’t pay tax on the capital gain, and the charity receives their full market value. You also get a tax receipt for that full amount. If you sell the securities first, you’ll pay tax on the gain, which reduces both your benefit and the charity’s. Donating directly makes your gift go further. It’s a win-win!

ECF: How long does it take to complete a gift of securities or mutual funds, and when should a donor start the process?

MC: Like many tax questions, it depends! Donation planning should be discussed with your financial advisor and the receiving charity as early as possible to check internal deadlines. Planned giving may occur all year and your advisor can work with you to determine the best time to donate a particular investment.

ECF: What are some common issues people run into when donating at year-end, and how can they avoid them?

MC: Not considering the holidays at year-end reduces the time your advisor and the charity has available to facilitate the donation. Similarly, not coordinating your plan with the entire advisory team can lead to missteps. Failing to loop in your tax advisor, financial advisor and the charity early on can lead to incomplete documents, and missed deadlines and opportunities to optimize the tax benefits of your giving.

ECF: How can I find out what types of gifts a charity accepts?

MC: Most charities have a website or donation services team that will provide options for how to give. If your chosen charity or charities do not have the ability to take donations of securities directly, you may be able to do alternate planning such as donoradvised funds, foundations or through a third-party such as Canada Helps or Edmonton Community Foundation.

This story comes from the Winter 2025 Edition of Thrive Magazine.

Read the full issue.