One of the greatest satisfactions in making a charitable gift is the opportunity to pay tribute to someone who has touched you in a significant way. That is why commemorative gifts—in memory of someone deceased or in honour of one who is still living—are perennially popular and appropriate. Through such a gift, you may honour a relative and perpetuate your family name, or you may recognize a mentor or friend who has greatly shaped your life. At the same time, your gift expresses your own commitment to the future of your community and provides valuable support for the charitable purposes you believe in.
Various giving techniques may be used to make a commemorative gift, and each yields particular tax benefits. If you have available resources and would like to see your gift go to work at once, consider an “outright gift.” Here is an example:
Mary’s mother recently passed away and she wants to do something special to pay tribute to her memory. She contributes $25,000 to decorate and furnish a conference room in a renovated parish centre at the church where her mother volunteered for many years. She receives a donation receipt for the full amount of her gift resulting in tax savings of $12,500 that she can use on this year’s income tax return or in the next five years.
Mary designated an immediate use for her gift. Other donors may prefer to direct their commemorative gifts to the parish’s endowment, where the gift’s principal remains intact and only the interest earnings are used, either for a purpose designated by the donor or for the Church’s general purposes. A “named endowment” is a particularly appropriate way to ensure that the name of the person honoured will be remembered far into the future.
Life Income Gift
Another technique that may be used to make a commemorative gift is the “life income gift,” which provides lifetime payments to the donor as well as a gift to the Church. For example, either a charitable gift annuity or a charitable remainder trust may be used for this purpose. For example:
Carl, a retired parish priest, 74, wants to endow an annual grant for an indigenous training program in the North in honour of his long–time mentor and friend, a retired bishop, who served for years in a Council of the North diocese. Because he depends on the income from his assets, Carl contributes $75,000 for a charitable gift annuity. For the rest of his life, he will receive payments of $5,916 per year; and 84% of this amount will be received tax free. Carl receives a donation receipt of $18,750, reflecting the gift portion of his contribution that will be used to establish the Fund.
Joe, age 70, wants to establish an endowed fund with the Diocese of Edmonton in memory of his deceased wife. He is reluctant to give up any of his investment income so he transfers property worth $250,000 to a charitable remainder trust from which his net income will be approximately $15,000 a year for life. When he funds the trust, he receives a donation receipt for $120,675 which will translate into tax savings of $60,338. After his death, the trust principal will be used to create the endowment.
A third technique for making a commemorative gift is the bequest.
Roger’s wife died last year, but he is deeply grateful to the parish where she found wonderful pastoral care and support from the clergy and lay leaders. As he updates his will, Roger includes a bequest of $100,000 to his parish church to be used to establish an endowed fund in his wife’s name. Income distributions from the fund will honour her memory and enhance an already effective pastoral ministry program. Upon Roger’s death, his estate will receive a donation receipt for the full amount of the gift. The tax credit will offset taxes on other income which must be reported on his final return.
We’re here to help
Mary, Carl, Joe and Roger have discovered the satisfaction that comes from honouring a friend or loved one by means of a commemorative gift. You can discover it, too—through The Diocese of Edmonton. We will gladly provide you with further information on the various ways of making a commemorative gift and our policies on named endowments. We would be pleased to discuss possible uses for your gift and appropriate recognition for the one in whose name it is given. Through The Diocese of Edmonton your tribute to one person will touch the lives of many others!
If you would like more information, in confidence and without obligation, please complete the Request for Planned Giving Information form.
The information on this webpage does not constitute legal or financial advice and should not be relied upon as a substitute for professional advice. The Planned Giving Office encourages you to seek professional legal, estate planning and financial advice before deciding on a course of action. The examples given above reflect rates at the time of writing and are subject to change.