A LEGACY OF CARING
For Anne and Peter Case, contributing to the well-being of others has always been a priority. Their commitment to supporting health care is a testament to their enduring belief in the importance of giving back.
Now, as they plan their estate, they have decided to leave a gift in their wills to local hospitals through UHKF (University Hospitals Kingston Foundation), ensuring that their legacy of care continues long after they are gone.
“Charitable giving has been a big part of our lives,” explains Anne, whose former career involved doing cancer research and clinical trials. “We realized that at some point we’re going to be gone, and it would be nice to leave a lasting gift to organizations that have been close to our hearts, like the hospital foundation.”
Peter – who had a successful career with investment firms (CIBC World Markets and BMO Nesbitt Burns) and as a director of energy company Fortis Inc. – echoed Anne’s sentiment.
“With privilege comes responsibility. We’re glad that we’re in a position to help out a little bit,” Peter says.
Their deep connection to health-care stems from personal experiences. Both Anne and Peter have faced health challenges that brought them into close contact with the medical community.
Peter, too, has had a few medical emergencies, including losing the tip of his finger in a saw accident. “The level of care I received was fabulous. The staff were just so kind, even though they were swamped.”
Their decision to support local hospitals through gifts in their wills is also driven by a broader understanding of the challenges facing our health-care systems.
“We’re fortunate in Canada to have a publicly funded health-care system, but the need is outstripping the ability of any government to fully fund it,” Peter explains.
WAYS TO MAKE AN IMPACT ON HEALTH CARE
Give a gift of securities – this is a
Make a gift in your will as a specific amount, percentage or residual of your estate. Make UHKF the beneficiary or partial beneficiary of your RRSP, RRIF or TFSA. Make
Anne and Peter Case
A LEGACY OF CARING
“There are things that hospitals can’t afford based on what the government gives them,” Anne adds, “Every little bit helps. You don’t have to be wealthy to make a difference.”
The Cases are particularly inspired by the innovations and improvements happening in health care. They have seen firsthand how donations can make a tangible difference
“We have friends who have benefitted from the wonderful resources at our local hospitals,” Anne notes. “Even during tough times like the COVID pandemic, the care was exceptional. It’s nice to contribute to that.”
LEAVING A LEGACY BY FUNDING PROSTATE CANCER RESEARCH
Long-time health-care supporter Larry Phipps, who passed away in 2013, established an endowment (and followed up with an estate gift through his will) to fund cancer research in honour of his parents, Will and Ethel Phipps.
“It’s important to me to leave a legacy that will make a difference. It’s the right thing to do,” Larry was quoted saying in a 2013 UHKF (University Hospitals Kingston Foundation) article.
More than a decade after Larry’s passing, the endowment is still helping people and making an impact.
Anne and Peter’s story is a powerful reminder of the impact that leaving a gift in a will can have on health care. They hope their decision will inspire others to consider how they, too, can make a difference and support the community.
“It’s important for people to support local health care and hospitals,” Anne says. “We’ve got a great thing here in Kingston, but it’s expensive to maintain these programs. Every contribution helps.”
By including local hospitals in their wills, Peter and Anne are ensuring that their spirit of care and compassion will benefit future generations.
“You can’t take it with you,” Peter says. “The older we get, the more we realize the importance of giving back.”
Stephanie Willing, manager of the Cancer Clinical Trials Research Teams at Kingston Health Sciences Centre, is one of those people who sees the benefits of Larry’s philanthropy.
Her department received funding from the Phipps endowment a few years ago during the pandemic, when a lot of research money was directed toward COVID-19 and funds for cancer were hard to find.
“Cancer research didn’t stop because of the pandemic. People were still getting cancer,” says Stephanie. “When you are doing treatment trials, which can last years, you can’t put someone’s treatment on hold. So it was important the trials continue, despite funding from companies and academic sponsors slowing down quite a bit.”
The Phipps funding provided stability to the unit while it navigated the pandemic. These funds played a role in supporting some Canadian Cancer Trial Group studies, where researchers looked at combining drug treatments and therapies to see if it improved patient outcomes.
The findings of the Kingston researchers have been published in some of the world’s most prestigious medical journals, including the New England Journal of Medicine and The Lancet.
“The drugs and treatments we are testing now are the ones future patients will be using,” says Stephanie. “The only way we know how to make treatments better and improve patient outcomes is to do this important clinical research.”
Larry Phipps
CHARITABLE GIVING AND TAXES
Charitable giving in Canada has been experiencing significant challenges in recent years. While many Canadians still prioritize making donations to causes they care about, there has been a notable decrease in the number of people donating. In 2021, fewer than 5 million Canadians claimed charitable tax credits, a decline attributed to financial strain and a shift towards crowdfunding, which doesn’t always provide tax receipts. Despite this, total donations increased by over $11.8 billion, reflecting a growing trend of giving among higher-income earners who make larger contributions, while smaller donors are reducing their involvement.
This downward trend has been exacerbated by economic factors such as inflation and the rising cost of living, which have caused people to re-evaluate their financial priorities. Nonprofits are feeling the pressure too, with an increase in demand for services coupled with a decline in revenue. For example, one in five Canadians is now relying on charitable services to meet essential needs.
Despite these challenges, there is still a strong culture of giving in Canada. Many individuals give for the impact their donations can make on their chosen charities, with tax considerations often secondary. Personally, I support UHKF (University Hospitals Kingston Foundation) because my personal health-care journey at our regional Cancer Centre was impacted by donors just like you and me. The generosity of others made it possible for me to receive chemotherapy at home with my young family rather than spending a week in hospital for the same treatment.
In the following sections, we will explore the tax implications of different methods of charitable giving, using the example of a retired female donor, age 70, to highlight the potential financial benefits.
THE EXAMPLE: A GENEROUS DONOR
Let’s take the example of a retired female donor, age 70, widowed and in good health. She receives an annual income of $120,000 from her RIF, CPP, OAS and her late husband’s pension, placing her in a marginal tax bracket of approximately 40%. We’ll assume she wishes to make a $10,000 donation using funds from a nonregistered investment account she’s had for some time
By Greg
with an adjusted cost base of $6,000.
We’ll compare the effects of this donation through three methods:
METHOD ONE: SELLING INVESTMENTS AND DONATING CASH
If our donor writes a cheque for $10,000, she will make a straightforward monetary contribution. Here’s how this breaks down:
• Total cost to generate the gift: $12,667
• Taxable capital gain on withdrawal: $2,667
• Increase in personal tax due: $712
• Charitable tax credit in year of donation: $10,000
• Tax savings in year of contribution: $2,872
Ultimately, the charity receives a $10,000 gift, and the donor’s tax savings offset some of the cost, but she must still deal with the implications of withdrawing from her taxable investment account.
METHOD TWO: DONATING APPRECIATED STOCKS, BONDS, OR MUTUAL FUNDS
When a donor gives appreciated securities rather than cash, the benefits increase:
• Total cost to generate the gift: $10,000
• Taxable capital gain on withdrawal: $0
• Increase in personal tax due: $0
• Charitable tax credit in year of donation: $10,000
• Tax savings in year of contribution: $2,872
Because there’s no capital gain on transferring appreciated securities directly to a charity, the donor
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avoids paying additional taxes, making this a more efficient method than donating cash. The charity still receives the full value of the donation or our donor could donate the whole pretax amount of $12,667 required in Method One increasing the impact of her donation and her tax savings.
METHOD THREE: USING A SINGLEPAYMENT LIFE INSURANCE POLICY
A newer, increasingly popular option is to use a life insurance product to maximize the value of your donation. Here, our donor purchases a $10,000 singlepayment life insurance policy with the charity as both the owner and beneficiary.
• Total cost to generate the gift: $12,667
• Taxable capital gain on withdrawal: $2,667
• Increase in personal tax due: $712
• Charitable tax credit in year of donation: $10,000
• Tax savings in year of contribution: $2,872
• Total value to the charity in year 1: $10,638 (assuming the donor passes away in year one)
This policy offers a unique benefit: the charity can access or borrow against the policy’s cash value while the donor is still living, and the policy’s value can grow over time, increasing the eventual impact of the generous donation.
THE LONG-TERM IMPACT OF LIFE INSURANCE GIVING
While the initial value of the life insurance gift may seem similar to a cash or stock donation, the potential long-term growth is significant. Assuming the donor lives beyond the first year, the value of the donation to
the charity continues to increase as the policy grows. Below is an estimate of how the projected value to the charity could evolve over time:
75 $12,468
80 $14,619
85 $17,519
90 $21,053
These projections assume that the life insurance policy grows based on the dividends paid from a pool of investments, though they are not guaranteed. Even so, this method offers significant long-term potential, especially for donors interested in maximizing the eventual impact of their contribution.
CONCLUSION
When considering one’s charitable giving, the method of their donation matters. Writing a cheque, while straightforward, may be less tax-efficient than donating appreciated securities or using a life insurance policy. The latter options offer potential savings for the donor while also increasing the long-term benefit to the charity. No matter the method, the important thing is that the donor’s generosity will create a lasting positive impact. As a supporter of UHKF, I give back both monetarily and with my time. I’m a proud member of the YGK Healthcare Champions group and through my monthly membership and our events throughout the year, we seek to benefit our local health-care programs.
Disclaimer: UHKF provides this publication for information purposes only, and it is not and should not be construed as professional advice. The information presented here is based on material believed to be reliable at the time of publication, but UHKF cannot guarantee the information is accurate or complete. Individuals should contact their professional advisors for advice regarding their personal circumstances and/or financial position. This information is general in nature and professional advice regarding an individual’s particular tax position should always be obtained in respect of any person’s specific circumstances.
