➜The ONE Thing: Every Dollar You Give Can Be Worth 10x More

Welcome to The ONE Thing! We know you're busy, and long, complicated newsletters aren’t practical. That’s why we bring you The ONE Thing. It’s One, clear, actionable insight in each edition—straight to the point. No fluff, no filler — a smart strategy you can apply immediately to protect your future and make your impact that much greater.

The ONE Idea: Unlocking the Power of Private Foundations & Donor-Advised Funds

Many affluent families and philanthropists donate generously — but often in the least efficient way. They don’t realize that a *private foundation or donor advised fund (DAF) can be the owner, payor, and beneficiary of a life insurance policy. By leveraging life insurance, donors can multiply their charitable impact—often turning every $1 into $10 or more—while building a lasting legacy that extends beyond their lifetime!

*Private foundations are nonprofit organizations created by individuals, families, or corporations to manage their charitable giving. Donor advised funds (DAFs) are public foundations that give donors their own charitable accounts that allow them to contribute funds and donate those funds to any Canadian charity acting similarly to private foundations.

How It Works

Step 1: Fund the Policy
Use money in your private foundation or Donor Advised Fund to fund the premiums of a permanent life insurance policy.

Step 2: Use the Growth for Giving
As the policy builds cash value*, you can access some of that growth for charitable gifts during your lifetime — while the full death benefit stays intact. In addition, the dividends** can be paid out each year as cash and given to charity.

Step 3: Create a Larger Legacy
At death, the charity receives the full tax-free insurance benefit, often worth 10x or more than the total premiums paid.

*Cash value: money that slowly builds up inside the policy over time, like a savings account you can access while you’re alive.

** Dividend: a tax-advantaged credit the insurer pays you from its surplus, which can be used to grow your policy’s value, reduce premiums, or support charitable giving.

Case Study: Mr. Josephs

Mr. Josephs, age 65, invests $100,000 per year from his private foundation to fund a 10-pay permanent life insurance policy (fully paid up after 10 years).

Why this works so well:

• Multiplier effect: $100K per year for 10 years (total $1M) can generate a projected $10 million tax-free death benefit — 10x the total contributions!

• Lifetime giving: The policy builds significant cash value over time, which Mr. Josephs can access for tax-advantaged charitable gifts during his lifetime.

• Legacy for the future: At death, the entire $10M death benefit goes to his private foundation, creating an even larger impact that continues for generations.

• Flexible funding: The 10-pay structure means the policy is fully paid in just 10 years, with no more premiums required, yet it continues to grow and provide the death benefit for life (to be discussed in later editions).

The Bottom Line

Using a private foundation or donor-advised fund to fund a permanent life insurance policy is a smart way to multiply your charitable impact. It turns every dollar into a larger tax-free legacy and gives you flexibility to give during your lifetime. Families concerned about preserving the foundation’s capital can be rest assured that all funds will be there for generations to come. Note: Insurance premiums are not included in the 5% disbursement quota for charities.

We’d be happy to show you how to create your own lasting legacy of giving!

👉 Let’s talk. There’s never a meter running.