Steve Willems November 20, 2023 Wealth Planning

Maximizing Your Impact: The Benefits of Donating Appreciated Securities

As a financial advisor, we often think about how we can help our clients achieve their goals and make the most of their investments. But what about when our clients want to make a positive impact on the world and give back to the community through charitable donations? One option to consider is donating appreciated securities to a registered charity. This can be an efficient way for our clients to not only save on taxes but also make a bigger impact on the causes they care about.

Let’s take the example of an individual who has held a stock for several years and the stock has appreciated significantly in value. The individual originally bought the stock for $20,000 and it is now worth $100,000. If the individual were to sell the stock, they would have to pay capital gains tax on the $80,000 gain. However, half of the capital gain is tax-free in Canada, so the taxable capital gain would be $40,000. If the individual’s marginal tax rate is 53.5% (the rate in British Columbia), the individual would save $21,400 in taxes by donating the stock to a registered charity, as opposed to selling the stock and donating the cash.

Now, let’s consider the case of a donation of appreciated securities made by a holding company. This strategy is even more efficient than the personal one. The holding company would be able to claim a tax credit for the FMV of the securities, and the charity would be able to sell the securities without paying tax on the capital gain. In addition, the holding company’s capital dividend account (CDA) would be credited with the full gain amount, allowing the shareholder to withdraw other funds tax-free at a later date. And the company can also claim a deduction for the donated amount, reducing the company’s taxable income as well.

Take this same concept one step further, and charitably minded entrepreneurs can even consider donating the preferred shares of their privately held corporations.  The timing of the sale of the business is a key milestone in life and often generates a significant tax bill in the year of sale, so incorporating a charitable strategy into the sale helps manage those competing priorities.

Donating appreciated securities to a registered charity is not just about the tax benefits, it’s also about making a positive impact on the world. It’s about giving back and creating a big impact by supporting the charitable causes that are important to you. The tax benefits are just an added bonus.

It is important to note that the tax laws and regulations related to this type of donation are subject to change, and it is always recommended to consult with a tax professional or accountant before making a donation of this nature to ensure compliance and maximize the benefits. Additionally, our team is specialized in processing these types of gifts and are capable of facilitating these and other types of complex gift strategies.


  1. Canada Revenue Agency (CRA) – Charitable Donations:
  2. Benefaction Foundation – Corporate Gift Planning –
  3. Philanthropic Foundations Canada – Donating Securities:

These resources provide information on the tax benefits of donating appreciated securities and the process of making such a donation, as well as the tax laws and regulations related to this type of donation.