At a time when non-profits are most in need of donations, businesses and foundations that raise money for charities have found themselves barred from some of their traditional fundraising methods, like golf tournaments and galas, due to pandemic containment restrictions on large gatherings.
But thanks to a tax measure unique to the Canadian mining and exploration sectors, investors in Skeena Resources (TSXV:SKE) have raised millions for charity.
The Foundation WCPD, a financial services firm, has brokered a $33.3 million raise for Skeena Resources through a flow-through share offering. Skeena will use the money for drilling programs in the Golden Triangle of northwest B.C.
“Raising $33 million would be a challenge in the best of times,” said Peter Nicholson, Foundation WCPD president. “But to do so amid this health crisis is truly exceptional.”
Flow through shares are a tax measure that incentivizes investment in mining and exploration companies by passing on a tax benefit to those who buy flow-through shares in a company.
Once purchased, the buyer can sell their shares, at a discount, to a third party, typically a high net worth individual or mutual fund, who provides liquidity for the company, and the original buyer of the flow-through shares gets a tax deduction. They can then choose to pass some or all of that tax deduction onto a charity of their choice.
Nicholson said he’s not sure how much money will be donated by buyers of Skeena flow-through shares. But typically, on a raise of $33 million, he estimates it could be around $20 million.
Some donations have already been made to food banks, he added.
“Charity flow, with an immediate liquidity provider, is the most cost effective way to make a contribution, especially during these difficult times,” Nicholson said.
