Fig Tree shares the wealth

They say it’s the season for giving. But what about the season for receiving? As in – tax breaks? Tax loss selling has been a concern for many investors these days, and its effects can be seen across many Bullboards and a few front page articles (including one today) on Stockhouse.

But selling shares is not the only way to offset capital gains for the year. You could, for example, give your shares away. That’s right: Give. As in donate. There are many organizations that accept shares as part of their regular donation drives, such as research hospitals, registered charities and NGOs. But now there’s a new one on the scene.

Yesterday had the pleasure of speaking with Paul Gomes, a Stockhouse member and founder of the Calgary-based organization called The Fig Tree Charitable Foundation, or “FTF.” Paul has a background in the investment industry as a broker, and after years of experience in the trenches, he decided to tackle a different kind of project. From the Fig Tree website:

The Fig Tree Charitable Foundation is a Calgary-based group dedicated to helping disadvantaged populations around the world by raising funds for international organizations delivering aid and development programs in the field. The FTF is committed to supporting projects that demonstrate the best potential return of every dollar raised, as measured by the net positive impact on the lives of our end users. FTF is establishing an endowment fund to provide ongoing support to approved ventures/aid agencies.

There’s a lot of information packed into those three sentences, but a few things stand out as being of particular relevance for Stockhouse readers. Yes, FTF is a “charitable foundation” (read: Not-for-profit) – but it’s also a business: “The FTF is committed to supporting projects that demonstrate the best potential return for every dollar raised.” What kind of return? The return of a better life. Not much more you could ask for there, as an investor or a recipient.

But the key point for Stockhouse readers – and all investors looking for a way to give and receive this Christmas – is the structure under which FTF pulls together “every dollar raised.” First there’s the giving: Donate some winning securities to FTF. Easy. Now onto the receiving: You will pay zero capital gains on the securities. (This is new as of May 2006 – prior to that securities donors paid capital gains on 25% of profit.) In addition to the gift of not paying taxes, you will receive a tax receipt for the full fair market value of the shares.

This is all well and good, to be sure. But how does it work? This is where Paul’s experience as a broker really comes into play. FTF has established connections with the majority of the brokerage firms in and around Calgary. They are: Acumen Capital Partners, RBC Securities, Scotia McLeod Inc., Peters & Co., TD Waterhouse (full and discount), National Bank Financial, Raymond James Ltd., Canaccord Capital Inc., PI Financial Corp., Blackmont Capital Inc., Research Capital Corporation, and Wolverton Securities Ltd. The brokerage houses have “Fig Tree accounts” set up, and advisors there know the process. What’s more, most of them have waived their fees in respect of the dispensation transaction, which means that recipients get the full value of the investor-donor’s contribution. These relationships, as well as one with partner Fireball Express Courier, ensure that transactions occur within a matter of hours, not days.

I’ve mentioned the mysterious “recipients” of the funds a few times now. Of course it’s really no mystery at all – one trip to the front page of the FTF website and you’ll see names like Doctors Without Borders, Engineers Without Borders, MBAs Without Borders, Opportunity International and Light up the World, among others. Again, from the Fig Tree website:

The FTF has a clear and transparent gifting process to ensure all donations are handled with the highest ethical standards. FTF will support projects that meet the following criteria:

• are viable.
• lever off existing projects and deliver tangible results within certain timelines.
• demonstrate measurable creation of value to the recipient community, while minimizing unintended consequences.
• maximizes the Fig Tree Foundation contribution by demonstrating a potential superior return on investment.
• create sustainable outcomes beyond the scope and tenure of FTF’s involvement to build capacity as well as infrastructure.
• are grass roots driven with proof of local ownership.

With such a strict set of criteria, it’s obvious that FTF isn’t just handing out cheques. It is running a business, and businesses must be accountable for their performance.

To be clear: Non-government organizations are the first tier beneficiaries of FTF funds, but the focus of FTF always remains on what it calls the “end user.” In its own words, “The Fig Tree Charitable Foundation is … dedicated to helping disadvantaged populations around the world by raising funds for international organizations delivering aid and development programs in the field.”

There is a lot more to be learned about the unique opportunity for giving (and receiving) through Fig Tree, and it can all be found on the organization’s website at http://www.figtreefoundation.org/index.html. There is a PowerPoint presentation that explains the process in detail and includes information on the kinds of projects FTF supports. Visitors to the site can also learn about other people working behind the scenes, including Tom Feuchtwanger, Janet Wilson and Dina O'Meara. FTF has also brought in a new addition to the board of directors – geologist Norman W. Holton of Loon Energy Inc. (TSX: V.LEY, Bullboards).

One caveat that potential investor-donors should note is that, because the Foundation is in its early growth stages, the majority of participating brokerage houses are centered in and around the Calgary area. If you have questions, contact FTF via email at info@figtreefoundation.org.