With the Stanley Cup Finals in full swing, I thought it would be interesting to re-visit the history surrounding the trust that holds the Stanley Cup.
According to this article, upon Lord Stanley of Preston being appointed Governor General of Canada by Queen Victoria in 1888, both him and his family became enamoured with hockey. So much so, that he created the ‘Dominion Hockey Challenge Cup’ to be held year to year by the championship hockey team in the Dominion of Canada.
To ensure the Cup remained true to Lord Stanley’s intention, he settled a charitable trust, with the Cup being the trust property. He appointed two trustees to administer the trust, and set out these initial trust terms:
- The winners shall return the Cup in good order when required by the trustees so that it may be passed to future winning teams;
- Each winning team, at its own expense, may have the club’s name and year engraved on a silver ring fitted on the Cup;
- The Cup shall remain a challenge cup, and should not become the property of one team, even if won more than once;
- The trustees shall maintain absolute authority in all situations or disputes over the winner of the Cup; and,
- If one of the existing trustees resigns or drops out, the remaining trustee shall nominate a substitute.
So, to answer the question – the NHL does not own the Cup. Nevertheless, the NHL was able to reach an agreement with the trustees in 1947 where, amongst other things, it obtained exclusive rights to award the Cup.
However, as a result of legal proceedings commenced by a recreational league hockey team during the last NHL lockout, the agreement was varied to allow the trustees to award the cup to a non-NHL team should the NHL fail to organize a competition.
Other sports related blogs can be found here:
While direct donations of cash or securities are still king when it comes to charitable giving in Canada, there are many other ways to donate. If you’re considering a larger gift, it pays to look at some alternatives.
A little bit of planning and a look at different options ensures that charitable gifts are made in the most tax- effective manner possible, are directed to the charities you most want to support, and are best suited to your financial situation and needs.
Here are some options to consider.
A charitable gift made in your will can be claimed against up to 100% of your net income on your final two lifetime tax returns. If the bequest is too large to claim on the final return, the surplus can be carried back to the previous tax year. There are several types of bequests possible:
- Specific bequests: an amount or specific piece of property paid out before any residual gifts
- Residual bequests: a share or percentage of the residue of estate
- Contingent bequest: the naming of an alternate charitable beneficiary in case the terms of an original bequest can’t be met
- Bequest subject to a trust: a trust established at death that typically provides lifetime income to one or more named beneficiaries, and a future gift to one or more charities.
Bequests can be tricky if not executed properly. This article provides details on the key pitfalls to avoid:
There are several ways that you can make a substantial but affordable gift using life insurance.
- Buy a new life insurance policy and name your charity as the owner and beneficiary. The premiums you pay qualify for a charitable tax receipt.
- Donate an existing policy to a charity. You’ll receive a charitable tax receipt for the fair market value of your life insurance policy.
- Name a charity as the beneficiary of an existing policy. Your estate will receive a charitable tax receipt when the proceeds are paid to the charity.
Private charitable foundation
A private charitable foundation is a trust or corporation that you establish and operate for charitable purposes. It’s a permanent institution – carrying your name or legacy, or that of a loved one – through which charitable work may be funded. Because of the costs of establishing and operating a foundation, you likely need initial funding of several hundred thousand dollars to make the structure worthwhile.
Private charitable foundations can be complex structures to establish and administer, so make sure you rely on professional advice for your foundation’s creation and operation.
Donor-advised funds are a flexible and cost-effective alternative to establishing a private charitable foundation.
You start by donating a lump sum amount – typically $10,000 or more – to a charitable gift fund administered by either a charity or a financial institution. Like a private charitable foundation, you receive a tax credit for the full amount donated, up to 75% of your net income for the year. Any excess amounts can be carried forward for up to five years to generate tax credits in those years. Each year, you direct to what charities you want grant money given and in what amounts.
Here’s a detailed comparison of private charitable foundations versus donor-advised funds:
There are a number of other planned giving options as well, from beneficiary designations of an RRSP or RRIF, to charitable remainder trusts, to charitable gift annuities.
But if you weigh all your options, and decide to make a simple direct gift, the Canada Revenue Agency’s charitable donation tax credit calculator is a great way to get an estimate of the tax impact of your donation:
Thanks for reading,
#TogetherWeAreStronger: The Merger of the Canadian Cancer Society and the Canadian Breast Cancer Society
According to The Globe and Mail, two of Canada’s largest cancer charities officially merged on February 1, 2017, being the Canadian Cancer Society and the Canadian Breast Cancer Foundation. This merger was reported to be a result of decreasing donations which threatened the continuation of decades-long research funding to hospitals and universities. The merger is designed to cut costs by eliminating overlapping operations between the two charities.
Since the merger, the new charity will operate under the name of the Canadian Cancer Society, and subsequent mergers with additional charities of similar purpose are already on the horizon. To paraphrase the Chairman of the Canadian Cancer Society, Robert Lawrie, a Toronto-based mergers and acquisitions specialist, informed The Globe and Mail that there are about 300 cancer charities in Canada with the similar cost and revenue challenges.
It turns out that more than 10% of the total annual funding for all cancer research in Canada comes from the Canadian Cancer Society and the Canadian
Breast Cancer Foundation. Decreasing donations to the Canadian Cancer Society have led the charity to dip into its reserve funds in order to cover program spending and operating expenses. Accordingly, it’s reserve fell from $151 million to $76.1 million between 2012 and 2016. Similarly, the reserve of the Canadian Breast Cancer Foundation fell from $36.1 million to $22.3 million between 2012 and 2016.
Donor fatigue and other competing causes (such as the Fort McMurray fire) were cited as possible reasons for the decrease in donations.
As an estate planning tip, it is always prudent to review Wills that were drawn up in the past to ensure that gifts to a charitable organization are properly named and that the intention of the testator remains the same notwithstanding the possibility that the operations of the named charity may have change over time. Otherwise, consideration should be given to whether the Will should be changed.
To donate to the new Canadian Cancer Society click here.
Thanks for reading this week!