A Strategic Gift: Good for the Givers and for the Ones Who Received

Photo caption: Christian School Foundation board member Kevin Antonides, left, presents Smithville Christian High School principal Ted Harris with a cheque for $30,000 – a donation to the school’s recent In Motion campaign and to the school’s bursary fund – made with a gift of securities.

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An Ontario couple’s gift of securities to several Christian schools is proving to be good – both for the cause of Christian education and for the couple’s tax status.

The sizable gift of unregistered securities was made by transferring the assets directly to the Christian School Foundation’s brokerage account, said Henry Koornneef, the Foundation’s executive vice-president. The securities, which had increased in value over the years, would have been subject to a significant tax hit: 50% of the increase in value is deemed a taxable capital gain, Koornneef said.

But the donors had made a pledge to Smithville Christian High School’s recent In Motion capital campaign and wanted to use the valuable securities to make the gift. That’s why they worked with their investment advisor and the Christian School Foundation – which allowed them to be even more generous than they had originally planned.

They had pledged $25,000 but were able to increase the gift to $30,000 said Smithville Christian principal Ted Harris. The extra gift will be used to offer need-based bursaries to students, Harris said.

Since the value of the unregistered securities was more than $75,000, the couple also made more than $40,000 in additional gifts to several other Christian schools, a related charity and the Christian School Foundation. The schools are grateful – and instead of paying tax on the redemption of the securities, the couple also realizes an immediate tax savings based on the full $75,000 amount of the donation.

“For them, it was the right time to move them,” Koornneef said, “but they didn’t need any of the money. They have enough regular income.” People such as these donors, who find themselves in higher tax brackets, can see their generosity improve their tax position by working with the Christian School Foundation.

But the same principles apply to donors of more modest means.  Earlier in 2015 the Foundation was pleased to receive a gift of securities that netted just over $2,000 as a gift to another member school. That school used the gift to upgrade its playground equipment.

Both gifts of appreciated securities, one large, one modest, were “completely donor initiated,” Koornneef said, coming from donors who are savvy money managers but whose actions demonstrate they also have confidence in the Christian School Foundation and its member schools.

The Christian School Foundation works hard to earn that confidence, Koornneef said, ensuring that its advice and actions are always guided by sound financial practices and ethical stewardship. Koornneef said his role includes establishing and maintaining good relationships with Christian school supporters.

“It’s a trust thing,” he said.