It’s not surprising that the recent recession has affected the number of cheques we are writing to support our favorite charities.  According to Community Foundations Canada, donations are down 37% compared to a year ago.  But fortunately there are other ways to satisfy our philanthropic desires that don’t hit our pocket books quite so directly.

Here are a few of the most popular alternatives to consider:

• Donating stocks and bonds that you already own
• Leaving a sum of money to a charity in your will
• Establishing a charitable trust
• Naming a charity as beneficiary on your life insurance policy

Depending on how the gift is structured, you can reduce the amount of income tax you pay now, or you can offset estate taxes in the future – and sometimes both.  In all cases, you can create a win-win for yourself and your favorite charities.

Here are 10 steps you can take to give wisely and comfortably:

1. Decide on the charitable organizations that you would like to support.
2. Ask yourself: Can I support these charities now and/or do I want to leave a legacy after I’m gone?
3. If you would like to donate now, review your cash flow to see if you can free up even a small amount to give to your favorite causes. If you set up a regular monthly contribution, you probably won’t even feel a pinch.
4. Or consider donating stocks or stock mutual funds that have a capital gain. If you donate publicly traded securities to a registered charity or private foundation, you will not pay any capital gains tax.
5. If you would like to leave a legacy, make sure you have a will and it is up to date. Without a will, you lose the ability to direct how you want your assets to be distributed.
6. Meet with a legal advisor and discuss the best way to leave monies to your favorite charity. This could be a specific dollar amount, specific securities (like stocks which could save on capital gain taxes) or a percentage of your assets. Even if you have children, why not consider leaving a small amount to the causes that are important to you.
7. You can also name a charity as a beneficiary of your RSP, RIF, pension or insurance policy.
8. Or you can transfer the ownership of a life insurance policy to a charity and receive a tax credit for the premiums you pay during your lifetime.
9. If you wish to donate a lump sum of money but still require the capital that money generates, you can establish a charitable remainder trust. You would collect the income for as long as you live and the charity receives the remaining funds at your death.
10. Educate and inform yourself on the best giving strategies for your unique circumstances so you can be smart with your money and caring at the same time. – Karin Mizgala

Karin Mizgala is a Vancouver-based fee-for-service financial planner with an MBA and a degree in psychology. She’s the President of LifeDesign Financial and co-founder of the Women’s Financial Learning Centre.