How to Donate 10 Times More with the Donation Flow-Through Strategy

Have you ever wondered how people donate millions to a charity, like to a large hospital, or have their name as a charitable foundation?

Do they actually give away that much money?

Or, do they have a method to do it? 

The truth is – it’s often an effective tax plan that people use to donate 10 times more, and it’s called the Donation Flow-Through Strategy.

In my latest YouTube video and podcast episode I’m going to teach you this strategy, so you too can become a philanthropist, without giving away a lot of money.

Your charitable foundation can survive 100 years after you are gone still donating to your causes. It’s the ultimate status symbol of the rich & famous.

Here’s what you’ll learn:

  • Why am I talking about donations when the cost of living is so high?
  • What if $5,000 would give you a $50,000 donation to a cause important to you?
  • What is a “flow-through share”?
  • What is the “Donation Flow-Through Strategy”?
  • How does it work?
  • Who does it work for?
  • How big or small a donation does it work for?
  • Can you use a holding corporation for it?
  • What creative tax strategies can you do?
  • How will the revised Alternative Minimum Tax (AMT) in 2024 affect this strategy?
  • Why is a personal charitable foundation a perfect fit for the “Donation Flow-Through Strategy”?
  • How does a “Donation Plan” benefit you?

 Why I am talking about donations when the cost of living is so high?

  • “The Compounding Life” (podcast).
  • Growth outlook for many years gives you an abundant life.
  • With an abundant life, you feel grateful.
  • Give back – Others are much worse off than you.
  • Our community.
  • “Bottom Billion” globally.

What if $5,000 would give you a $50,000 donation to a cause important to you?

Think big! Life is compounding.

Many people donate modest amounts every year.

Instead of donating $500/year, donate $5,000 once & use a tax strategy to make it $50,000.

“Donation Flow-Through Strategy” lets you donate 10 times more. (E.g., $5,000 of your money = $50,000 donation.)

One large donation OR contribute to your personal charitable foundation.

Your foundation can contribute $2,500/year (5%/year) forever for you.

Reducing your after-tax cost of giving amplifies charitable impact.

What is a “flow-through share”?

  • Flow-through share: A type of common share that permits the initial purchaser to claim a tax deduction equal to the amount invested.
  • Book value of investment is zero.
  • Full proceeds are a capital gain when you sell.
  • Shares of a mining company exploring for new minerals.
  • They transfer exploration tax credits to investors.
  • Federal tax credit doubled from 15% to 30% for critical minerals.
  • Finding minerals needed for future energy projects.

What is the “Donation Flow-Through Strategy”?

  • Strategy to make your donations up to 10 times larger.
  • Invest in a flow-through share.
  • Contribute share to a charity.
  • Get 90% of your investment back in tax refunds.

How does it work?

  1. You subscribe to flow-through share issue, accessing tax benefits.
  2. You donate shares to a registered Canadian charity or charitable foundation of your choice.
  3. Charity immediately sells the shares to a predetermined institutional end buyer.
  4. Charity receives funds and issues a donation tax receipt to you.

Who does it work for?

Accredited investor. One of:

  • Net income over $200,000 for last 2 years.
  • Net income with spouse over $300,000 for last 2 years.
  • $1 million in financial assets.
  • $5 million in net assets (including real estate).
  • Client of an independent portfolio manager (ICPM) – Our clients.

Taxable income over $350,000 for maximum benefit.

  • Able to invest or borrow 2.6x donation temporarily.

Corporations with significant investment income.

  • Taxable income should be 5.5 times donation.
  • Able to invest or borrow 5x donation for a day.

How big or small a donation does it work for?

Minimum investment $35,000 (varies)

  • Donation from minimum investment $5-10,000 (varies)

Maximum 75% of taxable income.

  • Individuals can carry forward donations up to 5 years.
  • Corporations can carry back non-capital loss from donations over 75% of income for up to 3 years.

What creative tax strategies can you do?

Use in a high-income year:

  • Large bonus, stock option, or investment capital gain.

Allows you to trigger a large capital gain.

  • Investment with large gain you would like to sell.
  • Mutual fund, stock or rental property.

Allows you to withdraw large amount from RRSP.

  • Withdraw from RRSP or RRIF to avoid OAS clawback or to do the “8-year GIS Strategy”.

Any large tax bill can be an opportunity.

  • Don’t make CRA your beneficiary!

Summary for an Individual

  • Cash available 434% of donation.
  • Get 170% refunded same day.
  • Carry 264% of donation for up to a year.

If you pay tax instalments, you can reduce them.

Then get a tax refund of 287% of the donation.

23% ahead.

  • Following year, pay 33% tax.
  • Net cost of donation 10%.

Example of Donation Flow-Through Strategy

Important Details

Typical cost of giving:

Individual                                  10%

Holding corporation                 15%

Operating corporation             24%

Tax refunds could be a year later:

  • Best offerings in the first half of year.
  • All expenses (CEE) renounced as of December 31.
  • If you pay tax instalments, reduce them instead of waiting for refund.

Only accredited investors get same day tax refund.

Normally, flow-through shares have a 120-day minimum hold.

Corporations should pay out all investment income in dividends every year. Pay personal tax, instead of 50.17% tax in corporation.

Why is a personal charitable foundation a perfect fit for the “Donation Flow-Through Strategy”?

  • Instead of one large donation, contribute to your personal charitable foundation.
  • Your foundation contributes to charities for you forever.
  • Personal charitable foundation
  • The “ultimate status symbol” of the wealthy.
  • Can setup & manage easily.

See my recent post: “The Ultimate Status Symbol & Making a Difference in the World”.

Picture it…

“Your name Charitable Foundation”

Contributing to the causes most important to you.

Surviving 100+ years after you are gone. 

Benefits of a Charitable Foundation

  • “Donor-Advised Fund”.
  • Get full tax credit now.
  • Stay invested. You may be able to control investments.
  • Donate 5%+/year.
  • Good for a high-income year.
  • Get family involved in donation committee. (Financial education for your kids.)
  • Other people can donate to your foundation.
  • Can exist long after you are gone. Leave a legacy.
  • Confidential donations with public foundation.
  • Perfect fit for Donation Flow-Through Strategy.

How will the revised Alternative Minimum Tax (AMT) in 2024 affect this strategy?

  • Government thinks people avoid tax  by donating.
  • Hopefully still 10% cost of giving.
  • Proportion of flow-through shares for immediate sale should be higher and shares donated lower.
  • Today, 10% cost of donation is roughly if you donate 10% of your income.
  • With new AMT, probably closer to 6% of your taxable income (assuming ordinary income).

Results will vary much more based on the client.

Depends on amounts & types of income, deductions/credits.

Applies to individuals only – Not corporations.

Tax-Efficient Donations

  • Registered charity #: 9 numbers + RR + 0001.
  • Non-Canadian charity – Ask about Canadian affiliate.

Non-refundable tax credit:

First $200: Lowest tax bracket 20%

Above $200: Highest tax bracket 50%

Above $200: Highest tax bracket 54% for income >$220,000

  • Combine: Usually claim on higher income spouse.
  • Can carry forward up to 5 years.
  • Maximum 75% of net income.
  • Year of death: Maximum 100% of net income.

 Benefits of a “Donation Plan”

  • “Donation Flow-Through Strategy” can be your Donation Plan
  • Choose 1-3 causes important to you.

Donate a larger amount to causes important to you.

May still want to give for family or friend requests.

Make a difference.

  • Get a good feeling from giving back.
  • Say “no” to all telemarketers. (Avoid giving token amounts to get rid of telemarketers. / Tell them you have a Donation Plan.)
  • Your charitable foundation can make all your donations.


Planning With Ed


Ed Rempel has helped thousands of Canadians become financially secure. He is a fee-for-service financial planner, tax  accountant, expert in many tax & investment strategies, and a popular and passionate blogger.

Ed has a unique understanding of how to be successful financially based on extensive real-life experience, having written nearly 1,000 comprehensive personal financial plans.

The “Planning with Ed” experience is about your life, not just money. Your Financial Plan is the GPS for your life.

Get your plan! Become financially secure and free to live the life you want.

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