In structure a Charitable Loan Agreement is similar to a Guaranteed Investment Contract (GIC).
In simplified terms a loan is made between you and a third-party charitable organization, such as Link Charity. The third-party organization puts the funds in an investment pool. And in return the party loaning the money receives a guaranteed return on the investment.
Global Aid Network cannot by ourselves offer this type of investment. Therefore we have partnered with Link Charity Canada to help partners provide funds to GAiN, while receiving an above average return on a guaranteed investment.
You receive interest and the charity of your choice receives funds. The funds the charity receives are the difference between the interest you are paid and the rate of return from the investment pool.
The rate of return Link Charity has historically been set higher than the standard GIC rates at chartered banks.
Types of Link Charity Charitable Loan Agreements
1. Revocable & Variable: A revocable loan is one that can be “called” at any time. This gives you flexibility to have your loan repaid to you at any time. The current rate of return is 2.75% on revocable and variable loans.
2. Irrevocable or Term: Link Charity current rates are:
- Maturing on June 30, 2024 at 3.0%
- Maturing June 30, 2025 at 3.50%
- Maturing June 30, 2027, at 4.0%
All Charitable Loan deposits pay semi-annually or accrue semi-annually (June and December).
- The principal is guaranteed
- The interest rate is guaranteed
- The loan can be revocable
- You can select the charity of your choice which will benefit from this loan