Charitable giving is on the rise in Canada and across the world. If you’re looking to become a bigger part of an important cause, but also want to be sure you’re maximizing your impact, the following tips can help.
1. Choose a worthy cause to support
Giving back starts with taking up a cause that’s important and meaningful – both to you and your fellow human-beings. For example, people are now taking a stronger stand against all forms of racism, injustice and discrimination.
Like many Canadians, you may recognize that you can learn more, do more and do better to help others. So where do you begin? Finding a way to donate to a charity – whether it’s through money, food, clothing or volunteer work – can be a great start.
There are many registered charities in Canada that help under-represented ethnicities and communities, like the:
- Black Health Alliance
- African Canadian Community Support Foundation
- Empowering Indigenous Youth in Governance and Leadership (EIYGL)
- Aboriginal Coalition to End Homelessness Society
- Canadian Anti-Racism Education And Research Society
- Artists Against Racism
- Pride and Remembrance Foundation
- Lesbian Gay Bi Trans Youth Line
Visit the Government of Canada’s “List of charities” page to find a socially-responsible organization with a cause that you want to support. You can also use this list to:
- see if a charity is currently registered or suspended by the government,
- get a charity’s contact information,
- learn about a charity’s support programs,
- and find general information about a charity’s revenue and expenses.
2. Set up recurring donations to charity
One effective way to up your charitable giving game is to think beyond the usual one-time gift approach.
“[Recurring or automatic monthly donations are] easy and convenient,” says Shannon Craig, chief marketing and product officer at CanadaHelps. This registered charity processes donations and gives the funds to other Canadian charities.
“Your gift is given automatically and you’re free to cancel, change or suspend it at any time,” she says. “You also get one tax receipt for all your monthly gifts, making tax time a breeze.”
And from the charity’s side, monthly or recurring donors are quite literally a lifesaver.
“They give charities a sense of revenue predictability,” says Allen LeBlanc, director of fund development and marketing at CODE. A registered Canadian charity, CODE focuses on advancing literacy and education in developing nations. “Monthly donors also tend to be stable and loyal. This helps charities accurately forecast their financials on monthly support.”
3. Claim your charitable tax credits
Are you claiming all the charitable-donation tax credits available to you now?
When filing your federal income tax, you can typically claim eligible donations up to 75% of your yearly net income.
The federal charitable tax-credit rate for 2020 is 15% for the first $200 donated. You can claim 29% on larger sums if your taxable income is up to $214,368. And, a special 33% rate can apply to your donations beyond the first $200 if your 2020 taxable income exceeds $214,368.
Your donation also qualifies for a provincial tax credit. In Ontario, for example, a 5.05% rate applies to donations up to $200, and 11.16% for larger sums. (Please note that these rates do not reflect the additional impact of the provincial surtax, which can produce even higher donation credit rates. You may want to talk to a tax professional for more information about surtax.)
4. Begin volunteering for a charity
Money isn’t the only way to give. There’s an urgent need for your time, too. Many charities thrive through the efforts of their volunteers.
Think about what skills you can offer a charitable organization. For example, if you like event planning, you can help organize a drive and raise funds. If you like to draw, you can help create art- or design-work for an organization’s website or promotional materials.
Remember, you can also volunteer online. Virtual volunteering lets you help out from wherever you live. The United Nations (UN) has a database of virtual volunteer opportunities with UN agencies and other non-profit organizations. Many are looking for virtual writers, translators, graphic designers and tutors.
5. Donate your investments to charity
Do you invest in stocks or mutual funds? Consider donating them along with a cash contribution. Doing so not only increases the size of your contribution, but also gives you a capital-gains tax break. Here’s what that means for you:
“Let’s say you bought ABC stock a number of years ago, and since then it increased by 300%,” says LeBlanc. “If you sold that stock to make a charitable gift, you would pay tax on the amount you gained. So, the charity would only receive the net proceeds of the sale.” Net proceeds refer to how much money you get for an investment or asset after taxes and other expenses have been subtracted.
But what if you give the stock directly to charity? “Then the charity would get the total value of the stock,” he adds. “And, you wouldn’t have to pay that gain from a tax perspective. You’d also get a charitable tax receipt for the full value of the asset.”
Still thinking over how much you can afford to give and how? Consider speaking with an advisor. An advisor can help you find out what works best for you so you can maximize your impact and your ability to give.
- Find an advisor near you. Most advisors now offer to meet Clients by phone or video chat.