Flow-Through Mining Shares
Structured Mining Flow-Through Donations in Canada
A Tax-Efficient Giving Strategy for High-Income Donors
Overview
Structured mining flow-through share donations are a sophisticated charitable giving strategy that allows Canadian donors—especially those with high taxable income—to significantly reduce their tax bill while supporting charitable causes. This strategy leverages Canada’s flow-through share regime, originally designed to promote investment in resource exploration, alongside the federal charitable donation tax credit system.
How It Works
Flow-Through Share Purchase A donor purchases flow-through shares (FTSs) from a Canadian mining or energy exploration company. These shares allow the investor to "flow through" exploration expenses to their personal tax return, generating a 100% tax deduction of the purchase amount.
Donation to Charity The donor gifts those shares to a GiveWise Giving Fund through a structured donation facilitator.
Charity Liquidates Shares GiveWise immediately sells the shares to a pre-arranged liquidity provider (known as a "back-end buyer") to convert them into cash without taking on market risk.
Donor Receives Tax Receipt The donor receives a charitable donation tax receipt from GiveWise immediately, equal to the fair market value (FMV) of the shares at the time of donation, typically close to the original purchase price.
Capital Gain Exemption Normally, donating publicly traded securities triggers a capital gain. However, under Canadian tax law, there is no capital gains tax when publicly listed shares are donated to a charity—resulting in additional tax savings.
Example of Tax Benefits
For a donor in a 50% marginal tax bracket:
$100,000 FTS purchase → $100,000 tax deduction
FMV of donated shares: $100,000 → $50,000 charitable tax credit
Effective after-tax cost: often ~$3,000–$5,000
Resulting GiveWise Giving Fund balance to gift out to charities: $100,000
Major Facilitators Who GiveWise Works With
These firms structure and facilitate flow-through share donation programs, including donor onboarding, tax documentation, and coordination with GiveWise and issuers:
PearTree Canada One of the largest facilitators, working with charities and donors nationwide.
Oberon Capital Corp. Offers structured charitable donation solutions via flow-through shares.
WCPD Foundation / Wealth Creation Preservation & Donation Inc. Pioneer in structured charitable flow-through giving.
Ideal for:
High-net-worth individuals with large tax liabilities
Corporations with exploration-focused investments
Donors seeking to multiply the impact of their giving
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