1. The Permanent Fund
May 1, 2017

2. Appointed Rotary Club of Kitchener Directors
The Foundation Board…
Term
July June 2017
July June 2018
July June 2019
Appointed Rotary Club of Kitchener Directors
President Elect
David Chatson
President Elect Elect
President
John Webster
Past President
Karen Redman
Treasurer
Ray Taylor
Elected Directors
Director A
Richard Bruckeder (Year 1)
Richard Bruckeder (Year 2)
Richard Bruckeder (Year 3)
Director B
Cheryl Ewing (Year 1)
Cheryl Ewing (Year 2)
Cheryl Ewing (Year 3)
Director C
Dave Martindale (Year 2)
Karen Redman (Year 1)
Karen Redman (Year 2)
Director D
Dave Smith (Year 2)
David Smith (Year 1)
David Smith (Year 2)
Director E
Martin Jones (Chair) (Year 2)
Martin Jones (Year 3)
Director E - to be elected
Director F
Brent/Hubert Singh (Year2)
Hubert Singh (Year 3)
Director F - to be elected

3. What has the Foundation Board been up to lately?
Defined principles for the RAWEF expenditures
Reviewed our investment strategy in the Harrison Fund
Cheryl Ewing to be next Board Chair as of July 2017
And now… the Permanent Fund!

4. So, what is the Permanent Fund?
Created in 2003, under the leadership of President JB Moore
‘Seeded’ with $35,000 from the Club and $10,000 donation from the estate of Art Angus (former Club President)
The concept was to create an endowment fund that would generate funds for the Club to use

5. Where is the Permanent Fund at?
Has been dormant since its inception
Has earned $13,000 in investment income so now has a value of $58,000
We haven’t ever spent any of the earnings of the Permanent Fund

6. Now what?
The Foundation Board has decided we need a renewed effort to increase the value of the Permanent Fund
If we could grow the value of the Permanent Fund to say $500,000… the Fund could generate perhaps $25,000 annually, to fund projects we want to do

7. Why? Offers alternatives to the Club members as donors and funders
Rotary International Foundation
Kitchener Club Permanent Fund
Tax benefits would be the same – all donations will receive tax receipts

8. RI Foundation versus Permanent Fund
A portion of our proceeds to Rotary International Foundation return to the Club through the District in the form of matching grants
The priorities are ultimately determined by RI and are subject to RI procedures and restrictions
RI will not fund buildings

9. The Permanent Fund
The Permanent Fund disbursements would be guided by priorities of the Club and the Foundation’s Strategic Plan
Habitat for Humanity Build could be a priority
Permanent Fund proceeds can be still be used as seed money for District Matching or Global Grants

10. As a member of our club, you can decide to donate to the Permanent Fund to support our Club’s initiatives. You can continue to donate to RI as well.

11. There are many ways to leave a charitable gift to the Permanent Fund
Here are some examples I’ll cover:
Gift of Cash
Gift in your Will
Gift of Life Insurance
Gift of RRSPs or RRIFs
Gift of Securities
Gift of Property
There are many ways to leave a charitable gift to the Permanent Fund
Here are some examples I’ll cover
Gifts of Cash
Gifts in your Will
Gifts of Life Insurance
Gifts of RRSPs or RRIFs
Gifts of Securities
Gifts of Property

12. Federal & Provincial Tax Credits
Amounts up to $200 qualify for a tax credit of about 20%
Amounts over $200 qualify for tax credits about 40%
Depending on your personal tax bracket, a $10,000 donation may only cost you about $6,000 after receiving a $4,000 tax credit.
Claim Limits
Claim donations of up to 75% of your annual income each year
Contributions over 75% can be carried forward up to 5 years
At death, gifts can be claimed against up to 100% of income
And carried back one year
But first, what are the tax advantages of donating to the Kitchener Rotary Club Permanent Fund?
Federal & Provincial Tax Credits
Amounts up to $200 qualify for a tax credit of about 20%
Amounts over $200 qualify for tax credits about 40% -Depending on your personal tax bracket, a $10,000 donation may only cost you about $6,000
Claim Limits
Claim donations of up to 75% of your annual net income each year
-Unused contributions can be carried forward up to 5 years
At death, gifts can be claimed against up to 100% of net income
-And carried back one year

13. Gift of Cash Donate once, annually or schedule monthly donations
Make the Kitchener Permanent Fund a target for regular giving
The charitable tax receipt can be applied up to 75% of income
Unused contributions can be carried forward 5 years
Donate once, annually or schedule monthly donations.
Make the Kitchener Permanent Fund a target for regular giving.
The charitable tax receipt can be applied up to 75% of net income and unused contributions can be carried forward 5 years.

14. Gift In Your Will Fixed amount
Percentage of what is left after tax and other costs have been paid
The charitable tax receipt can be applied up to 100% of income in the year of death and carried back one year
Putting the Kitchener permanent fund in your Will is the simplest way that you can leave a charitable legacy. With a charitable beneficiary, you will be remembered after your death for the values that you held dear during your lifetime. You will feel good now knowing that you will be making a significant and lasting difference to causes that you care about.
Your charitable gift can be in the form of a fixed amount or it can be a percentage of what is left after tax and other costs have been paid. Your estate will receive a charitable gift receipt in the amount of your gift which will offset taxes owing on your estate. The charitable tax receipt can be applied up to 100% of income in the year of death and in addition, carried back one year.
You may feel concern that your heirs will receive less if a charity is named in your Will.  Your family and others who depend on you should always come first.  However, because income tax is almost always owing in an estate, through income and/or capital gain, a charitable receipt can offset taxes owing and quite simply re-direct some or all of the money in the estate that would go to tax.  A win-Win.
It is recommended when drawing up your Will, that you consult a legal advisor who can ensure your final wishes are met.  As well, it is recommended that you consult with family members so they are involved in your legacy decisions.

15. Gifts of Life Insurance
Donate a fully paid up permanent life insurance policy
Has value, but no longer needed
Receive a tax receipt for the fair market value
Can be applied for current year income tax relief
Purchase and donate a new Life Insurance Policy
There are two ways to set these up
Receive income tax credits now
Receive income tax credits at death
There are a number of ways to gift life insurance to the Permanent Fund.
One potential application is through fully paid up life insurance policies.  If you have a fully paid up life insurance policy that has value but is no longer needed, you can realize a charitable receipt in the fair market value of the policy that can be applied for current tax relief.
Life insurance can be a powerful ally in increasing the amount of the value of an estate.
Through a series of smaller payments during your lifetime, you can make a large charitable gift at the end of life. This is accomplished through the magic of leveraging.
You can purchase and donate a new life insurance policy to the permanent fund
There are 2 ways to set this up: 1) If you want to receive the income tax credits NOW or 2) If you want to receive the income tax credits on your death to cover or offset estate taxes.

16. Gifts of Life Insurance Receive Your Income Tax Credits Now
Purchase a life insurance policy and name the Permanent Fund as the owner and beneficiary
Claim the payments as an annual charitable donation
Policy pays out at death
NO tax credits for your estate
Example to receive your tax credits now
Let's say your wish is to leave a legacy of $100,000 to the Kitchener Rotary Club Permanent fund, but you don't want to give up that kind of money now as it may impact your standard of living or ability to produce income through retirement.
You can put a life insurance policy in place that will pay $100,000 to the Permanent Fund by naming it the beneficiary and irrevocable owner of the policy. You can then claim the annual payments of the insurance policy as a charitable donation. The club receives the money for its charitable purposes on your death.
In this way there is NO charitable receipt to your estate when you die as you have been receiving charitable receipts every year as you pay the premiums.

17. Gifts of Life Insurance Receive Your Income Tax Credits at Death
Purchase a life insurance policy and name the Permanent Fund as the beneficiary and you the owner of the policy
NO annual tax receipt for the insurance payments
Policy pays out at death, your estate receives a charitable receipt for the value paid out
Example to receive your tax credits at death
If you name the Kitchener Rotary Club Permanent Fund as beneficiary and continue to own the policy, your estate will benefit from the charitable receipt on the value received at death. This receipt can be used to offset any taxes owing through income and/or capital gains owed at death. In this way you do not receive a donation receipt for the payments made to the life insurance policy.
A benefit to naming the Kitchener Rotary Club Permanent Fund directly on your policy is that there is no need for the gift to pass through probate. It passes outside your estate, thereby saving money in your estate and the gift is not subject to contest by anyone.
Life insurance can also be utilized as wealth replacement. For instance, you can replace the full value of a gift to Rotary in your estate by taking out a life insurance policy that will pay your estate that same value on your death. The charitable tax receipt received by your estate for the value of your charitable gift will reduce the income tax payable by your estate. 
In this way you can: make a significant charitable gift; reduce income taxes payable on your estate and replace the amount of your charitable gift to your estate

18. Gifts of Life Insurance How much does a life insurance policy cost?
Male, Age 50, Non-smoker, good health
$100, Pay Whole Life Insurance Policy
Payments are $1,988 per year for 20 years.
In 20 years payments total $39,740
Minimum death benefit $100,000
Dies at life expectancy (age 87) – Death benefit could be as high as $130,000
Dies at age 95 – Death benefit could be $173,000
Total cost $39,740
How much does a life insurance policy actually cost?
Male, Age 50, Non-smoker, good health
$100, Pay Whole Life Insurance Policy * - With a 20-pay policy, it is fully paid with no reoccurring payments after 20 years.
Payments are $1,988 per year for 20 years.
In 20 years payments total $39,740
Minimum death benefit $100,000
If the donor dies at life expectancy (age 87) – Death benefit could be as high as $130,000
If death is at age 95 – Death benefit could be $173,000
Total cost for this policy $39,740
Talk about leveraging!
* 4/29/17 Forester Life - Advantage Plus - 20-Pay (Enhanced) Standard Non-Smoker, Age 50, Male

19. Gifts of RRSPs or RRIFs
RRSPs & RRIFs are among the most highly taxed assets in your estate
At death, RRSPs & RRIFs are treated as if they have been cashed all at once & are added to income. <50% tax could be owed
Naming the Permanent Fund as the beneficiary of your RRSP or RRIF is one of the most tax effective ways to leave a lasting legacy.
Charitable tax receipt offsets any taxes owing against your estate.
Tax credits can be applied up to 100% in the year of death and, can be carried back one year.
Naming the Kitchener Rotary Permanent Fund the partial or full beneficiary of your RRSP or RRIF is one of the most tax effective ways to leave a lasting legacy. This is because RRSPs and RRIFs are among the most highly taxed assets in your estate, hence the charitable tax receipt offsets any taxes owing against your estate.
At death, RRSPs and RRIFs are treated as if they have been cashed all at once and are added to income in the year of death. For example, this could mean that an income of $35,000 in the year of death could become an income of $135,000, if there is $100,000 in RRSP or RRIF income added.  The income would be taxed at the highest tax level, in many cases, directing approximately half the RRSP or RRIF to taxation.  A charitable receipt can be applied up to 100% in the year of death and in addition, can be carried back one year.

20. Gifts of Securities
Gifts of securities receive favorable tax treatment
These can be in the form of publicly traded stocks, mutual and segregated funds, bonds or futures.
Receive a charitable receipt for the market value of the securities, just as though you had donated cash.
This essentially eliminates any income tax on your capital gains
The charitable tax receipt can be applied up to 75% of income
Unused contributions can be carried forward 5 years
In year of death, up to 100% of income can be used and carried back one year
Gifts of securities receive favorable tax treatment.  In its 2006 budget, the Canadian federal government eliminated capital gains tax on listed stocks when transferred directly to registered charities.  These can be in the form of publicly traded stocks in Canada and major international exchanges, mutual and segregated funds, bonds or futures; allowing you to avoid paying capital gains tax on any accrued gain of the shares or funds donated.
You will receive a charitable receipt for the market value of the securities, just as though you had donated cash.  When combined with the charitable receipt for the value of the securities, this provides a great deal of tax benefit to you, the donor, while giving support to the work of a cause that you value.
If securities are donated while living, the charitable tax receipt can be applied up to 75% of net income, unused contributions can be carried forward 5 years
If donated through your Will, up to 100% can be used to offset income tax and carried back one year.

21. Gift of Property Make a gift of property outright, or
Irrevocably assign ownership and receive the tax benefits now while enjoying the use of the property for your lifetime
Examples are houses, cottages, commercial buildings and land, jewelry, antiques, art and vehicles
All property has a cash value, you are entitled to a tax receipt for the full market value of the property
You can choose to make a gift of property outright; or you may irrevocably assign ownership and receive the tax benefits now while enjoying the use of the property for your lifetime.
You will have the satisfaction of knowing that the sale of the property now or eventually, will provide funds to support the work of Rotary. Houses, cottages, commercial buildings and land, jewelry, antiques, art and vehicles are examples of personal property that can be used to make a significant contribution.  
Because all property has a cash value, the donor is entitled to a tax receipt for the full market value of the property.
Instead of cash, donate property, including securities or shares on which you have capital gains. Philanthropy and tax planning go hand in hand.

22. With proper estate planning, a taxpayer can eliminate income taxes at death by giving to charity and in most cases not disadvantage family heirs
As you can see, with proper estate planning, a taxpayer can eliminate income taxes at death by giving to charity and in most cases not disadvantage family heirs