Bond DonationsA powerful way to leverage your tax-savings
If you were to make a gift to the annual fund today you might only be able to afford something small but imagine being able to make a gift in the thousands today that also immediately improves your own financial situation.
The donation of your bond could be just that and the younger your child(ren) the more this makes sense as an option for you and your family to consider.
To borrow the old singer’s phrase – it goes a little something like this*:
You have a bond on deposit of $15,000 and choose to donate it to the school. You have one daughter in grade 2. That means you would not normally receive your bond back for another ten years, when she graduates from Aspengrove after grade 12. But by donating the bond you receive a tax receipt for that $15,000 today. On your next tax return that means you could expect a refund of as much as $6,500 thanks to that gift. That’s money you would not have seen for another ten years that you can put to work today.
Sounds good? It gets better.
Now, what happens if you choose to invest that $6,500. In an ideal world, it might go into a tax-free investment – an RESP for example so it will be there to fund her university education. If it earned 7.5% over those ten years it would be then worth more than $13,000. If you have any high-interest debt (credit cards anyone?) that $6,500 could pay it down right away end up saving you far more over the next decade.
Your gift to the school then – $15,000 that the school had the use of for ten years, a powerful gift indeed – might cost you only $2,000 – ten years later. Or $200 per year. If it pays down personal debt – the positive impact on your finances could be substantial, to say the least.
That’s for the logical folks though – for many of us it really comes down to making a $15,000 gift today and how good it feels to make that kind of an impact at our school.
* which is to say, this is an example only. Check with your accountant first to see how this might apply to your personal situation.