Gordon Powers

According to research from the BMO Retirement Institute, 44 per cent of Canadian boomers donate on impulse, without either a plan or a budget.

Frankly, although Canadians are undoubtedly a generous bunch, I think that number is actually much higher.

In any case, Canadians give less than they might — BMO estimates that just one in four (21 per cent) of us have earmarked money for a charitable cause as part of our estate — because they don't include charitable giving as part of their overall financial planning discussions, says Ted Rechtshaffen of TriDelta Financial Partners in Toronto.

More importantly, they often don't understand the overall tax implications of committing money while they're still living, he adds.

Rechtshaffen believes that if Canadians had a better handle on what they could afford to donate, they would, in many cases, be comfortable giving more.

That's why he has put together an online tool called the Donation Planner, which answers the basic question: "How much can I afford to give?" Only after you've established this benchmark can you move beyond door-to-door canvasses and golf tournaments, he maintains.

Fortunately, there are many ways to donate, and with some planning, it's not hard to find a strategy that suits your personal situation.

The most common form of planned giving is the bequest — making a gift through one's will. In this instance, the charity would receive a specific dollar amount or a stated proportion of your estate upon your death.

You might also donate a property while still making use of it. For example, you could donate a residual interest in your home or cottage, but continue to use and enjoy it over your lifetime.

When the transfer is made, you'll receive a receipt for the value, in today's dollars, of the property the charity will receive at your death.

Older donors with more assets may want to consider establishing a charitable remainder trust, suggests Gena Katz, an executive director with Ernst & Young's tax group.

A charitable remainder trust pays you an annual income from your principal, which reverts to the charity upon your, or perhaps your surviving partner's, death.

The tax benefit arises when the charity issues a receipt for the value of the remainder interest -- usually as soon as it's established — which means you see the tax benefits up front.

Alternatively, you might consider a charitable gift annuity. Here, a portion of your contribution is used to purchase an annuity for you while the remainder goes directly to the charity as a gift.