Going From Donating to 6 Families to Starting Up a Private Foundation: Here’s How You Can Achieve It!

11096584_10152709862956905_7446075890068182462_n“Can we afford this?”, that’s the question Erwin and I asked ourselves multiple times.

We are going to start a charitable foundation called the Basket Brigade, and the main mandate of this foundation is provide dinners to families who are in need of food.

We know that we have to start small, but we know for a fact that we can do it.

We started last Christmas. We thought we would deliver Christmas dinners to some families who are in need in Hamilton. Our initial goal was to deliver food to six families. We ended up delivering to 30 families!

So we set a goal to double that number for Easter holiday. We were able to deliver to 75 families for Easter!

12115935_10156114977395313_2916239039316661061_nAnd yet again we set another goal to double that number, we were able to raise enough money for 150 families and delivered a full turkey dinner to them this past Saturday.

Thank you to all the volunteers who came out and supported the cause.

We will make this bigger and better. Erwin and I are committed to setup a charitable foundation, so we can raise funds to invest and all the money earned on the investment will be used to deliver more turkey dinners to these families who are in need.

And hopefully we can issue the donation receipts to donate to this great cause next time around!

For those real estate investors who are interested in setting up a private foundation for their own causes, you may want to find out how to setup a charitable foundation.

Depending on how you setup the foundation, it can take the form of a corporation, trust or under a constitution.

Most people choose to setup a corporation, mainly because it is considered as a separate legal entity in Canada. Hence it is allowed to own properties and act as a separate legal entity.

You would have to make sure that you are incorporated under the appropriate law for a charitable organization.

Being incorporated under the charitable law does not mean that you are exempted from paying taxes. Application to Canada Revenue Agency (CRA) to obtain a charitable organization status is required.

By becoming a charitable organization, we will then be able to issue tax receipts to individual donors to reduce their taxes payable. This charitable foundation will also be exempted from paying income taxes and are eligible to claim a partial rebate on GST/HST that we pay in most cases.

We want to have the money directly going to the people who are in need, while maximizing the tax benefit, if possible.

After incorporation, we would then need to fill out a form to apply to CRA with our intended objectives and beneficiaries, provide CRA with our budget and tell them how we are going to fund our activities.

12074808_10156114977185313_8778714068055671195_nI have never applied to get a charity status with CRA, hopefully this will work. A lawyer has already been contacted to start incorporation and application process.

For more information about the Basket Brigade, please visit Mr Hamilton’s site

Until next time, happy Canadian Real Estate investing!

Cherry Chan, CPA, CA

Your Real Estate Accountant

This site provides general information on various tax issues and other matters. The information is not intended to constitute professional advice and may not be appropriate for a specific individual or fact situation. It is written by the author solely in their personal capacity and cannot be attributed to the accounting firm with which they are affiliated. It is not intended to constitute professional advice, and neither the author nor the firm with which the author is associated shall accept any liability in respect of any reliance on the information contained herein. Readers should always consult with their professional advisors in respect of their particular situation.
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