Making a Gift of Securities

Leadership Giving | Planned Giving | Women’s Leadership Council

In May 2006’s Federal Budget, publicly listed securities to charitable organizations became exempt from any capital gains tax. The 2008 Federal Budget included an amendment to the tax law, adding exchangeable shares to the list of securities that the tax treatment already applies to, which includes:

  • Shares listed on most Canadian and certain foreign stock exchanges
  • Prescribed debt obligations
  • Shares of the capital stock of a Canadian public mutual fund corporation
  • Units of widely held Canadian mutual fund trusts
  • Interest in related segregated fund trusts

The benefits of donating a gift of securities to United Way are two-fold. First, you will receive a tax receipt for the fair market value of the donation in the amount of the closing trading price on the day United Way receives the security. Second, your donation is exempt from the capital gains tax that typically applies to the sale of a security.

Donating Securities to United Way—it’s fast, it’s easy and both you and your community benefit!

Donating securities to United Way involves two easy steps:

  1. Complete United Way’s Gift of Securities Share Transfer Form (PDF / DOC) – and contact us to let us know to expect your donation. At this time, we will provide you with our brokerage account information. Please note that the Share Transfer Form is for United Way’s records and does not initiate transfer of the securities.
  2. Instruct your broker to transfer your securities to United Way’s brokerage account. Please do not transfer securities to United Way without notifying us first.

For questions or assistance please contact Elizabeth McKeown, Associate Director, Major Individual Giving at 905-474-9974 x. 240 or emckeown@uwyr.on.ca.

Frequently Asked Questions about Gifts of Securities

For more details on United Way’s approach to handling securities, please review the following information.

Q1. How does United Way handle gifts of securities and how long does the process take?

Q2. Is there a minimum value of a gift of securities that will be accepted by United Way York Region?

We value all donations but request that donors wishing to give a gift that is less than $1,000 do so via payroll, cheque or credit card.

Q3. When will United Way sell my security? What will be the value of my tax receipt?

United Way sells the securities immediately upon receipt. You will receive a Gift of Securities charitable tax receipt for the closing price of the security on the day that it is received in United Way’s account.

Q4. When will I receive my tax receipt?

Your tax receipt is issued and available once United Way receives the cheque for the sale of the security. This is typically within 10 business days of the date that the securities are received in United Way’s account.

Q5. I want to donate share certificates. What do I need to do?

Share certificates can be donated in the donor’s name or transferred to United Way’s name.

If donated in the donor’s name, the certificates must be signed and a photocopy of the front and back of the donor’s driver’s license or a signature guarantee on the certificate from the donor’s bank included, along with a letter from the donor directing the certificates to United Way.

Q6. Can I donate the proceeds from a sale of shares to United Way?

Yes, but this type of donation will be handled as a cash donation and will not benefit from the capital gains tax exemption applied to a gift of securities.

Q7. I’m with a discount brokerage. Will this impact the timing of the process?

Yes, typically the processing time to transfer the share from a discount broker can take up to ten business days. In the case of mutual funds, the process can take longer.

Q8. What is United Way’s process for handling exchangeable shares?

Exchangeable shares can be donated directly to United Way (typically in certificate form) or donated after they are exchanged.

If the shares are donated directly, United Way’s broker will exchange them for shares of the underlying company, which could take up to one week. The donor is receipted based on the closing price of the underlying shares on the date the exchange is complete. If the shares are exchanged prior to donation to United Way, the process is the same as any other share and the donor will receive a gift of securities charitable tax receipt for the closing price on the day that the shares are received in United Way’s account.

Q9. How does United Way handle the difference between the receipted amount for a gift of securities and the net proceeds from the sale?

United Way is only able to distribute the net proceeds from the sale of a gift of securities, which reflects the selling price minus the brokerage fees.

 

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