Ryma Nasrallah has built her career around philanthropy. A Partner at Borden Ladner Gervais LLP, Ryma specializes in advising registered charities and non-profit organizations, and she’s often helped charitable organizations and foundations get off the ground. She recently took it one step further and made it personal, making her largest ever donation to our Campaign to Create Tomorrow. With an ambitious $500-million fundraising goal, it is the largest campaign in our city’s history.
Now, on top of her roles as the Vice-Chair of the Canadian Bar Association’s Charities and Not-for-Profit Section and serving on the executive of the Ontario Bar Association’s Charities and Not-for-Profit Section, Ryma has joined The Ottawa Hospital Foundation’s Board of Directors.
Learn more about what motivated Ryma to give and get involved — and what you can gain by giving gifts of securities
Q: You recently made your largest gift ever when you gave to the Campaign to Create Tomorrow — what motivated this?
A: After joining the Board of Directors of The Ottawa Hospital Foundation, I was inspired by all the donors who had generously contributed to the Campaign to Create Tomorrow. I wanted to push myself to make my most significant donation in hopes I would inspire others around me to do the same and help reshape the future of healthcare in Ottawa.
Q: What impact do you hope your gift will have and why should others give?
A: I hope my gift will bring The Ottawa Hospital one step closer to delivering a new, state-of-the-art hospital. Building a new hospital is a once-in-a-generation opportunity, and I believe we all have a duty to do what we can to help. Every dollar counts.
Q: Why did you decide to join the Foundation’s Board of Directors?
A: I joined to give back and strengthen my ties to The Ottawa Hospital, because healthcare is so important to me and my family. I am excited to support the largest fundraising campaign in Ottawa’s history and to help The Ottawa Hospital transform and revolutionize healthcare.
Q: Based on your experience with your own clients, what are the benefits of giving gifts of securities?
A: The benefits of gifting publicly listed securities are threefold.
First, gifting publicly listed securities entitles the donor to an official donation receipt equal to the fair market value of the securities on the date they are donated to a registered charity. An official donation receipt will result in a charitable deduction for corporate donors or a non-refundable charitable tax credit for individual donors that will reduce income taxes.
Second, the donor may be exempt from paying any capital gains tax on the appreciated value of the publicly listed securities. In order to receive this favourable tax treatment, the donor must gift the publicly listed securities directly to the registered charity. If the donor sells the securities in the open market and donates the cash proceeds, they will be subject to income tax on any resulting capital gain. By donating the publicly listed securities directly to a registered charity, the donor benefits by paying no capital gains tax on the disposition, and the charity benefits by receiving the full value of the securities.
Third, if the publicly listed securities are held by a corporation — including an individual’s holding company or business — the full amount of the capital gain is added to the corporation’s capital dividend account (CDA). Amounts in the CDA allow the corporation to pay tax-free dividends to its shareholders. Usually, only half of a capital gain is added to the capital dividend account. This extra amount in the CDA can be distributed to the shareholders of the corporation on a tax-free basis, which results in additional tax savings.
Q: What would you tell a donor who is nervous to try giving a gift of securities?
A: There is no reason to be nervous about gifting publicly listed securities. Although it may sound daunting, it is frequently done. Foundation staff are familiar with the process and are ready to help. They will work closely with the donor’s financial advisor to complete the donation. The benefits of gifting publicly listed securities significantly outweigh any additional steps.
Q: With proposed tax changes on the horizon next year, when is the best time for donors to give gifts of securities and what should donors know about these changes?
A: The 2023 Federal Budget introduced new rules for the Alternative Minimum Tax (AMT) regime that will increase the tax cost for high-income individuals donating publicly listed securities to registered charities. The AMT is a parallel tax calculation that allows fewer deductions, exemptions, and tax credits than under the ordinary income tax rules, and that currently applies a flat 15% tax rate with a $40,000 basic exemption. The taxpayer pays the AMT or regular tax, whichever is the highest.
Budget 2023 proposed changes to the AMT calculation include increasing the AMT rate to 20.5% and the basic exemption to $173,000, which raises the amount of income an individual would need to trigger the AMT. Notable changes for high-income individuals donating publicly listed securities include adjusting the inclusion rate for capital gains resulting from the donation of publicly listed securities from 0% to 30% and limiting the charitable donation tax credit by half. These changes will reduce the financial incentive for these individuals to donate publicly listed securities.
The proposed changes will come into force for taxation years that begin after 2023. So, to take full advantage of the current tax benefits, the best time for individual donors to gift publicly listed securities is before December 31, 2023.