With the upcoming holiday season likely being the first time you won’t visit loved ones, exchange gifts and enjoy a festive meal – now’s as good of a time as any to count your blessings, spread cheer and do a little good. As the end of the year approaches, consider giving back through charitable giving. Your support is vital for many organisations, and can also provide you with many personal benefits.
What is Charitable Giving?
Charitable giving occurs when you give monetary donations or physical objects to a registered non-profit or public organisation. You receive nothing of value in return.
Generous Canadians like you support a variety of organisations that offer essential services. Eight in 10 Canadians believe charitable giving is important, and 72% of Canadians engaged in charitable activity last year. In 2017, total giving reached $9.6 billion. Canadians donate the most money to organisations that support social services, education, health, public benefits, and religion.
What Are the Benefits of Charitable Giving?
You may give charitable donations to local, national or global organisations for purely altruistic reasons. Giving offers seven benefits, though, that can motivate you to give even more.
- Show gratitude.
Your gift of any size reflects your appreciation and gratitude for all your blessings. Essentially, you share your wealth when you donate to charity.
- Gain tax breaks.
To support charitable donations, the Canadian government offers generous tax incentives. You could receive a tax credit of up to 53% when you make a donation to a registered Canadian charity and submit receipt proof with your annual tax return.
Keep in mind that if you receive something, such as a raffle prize, in exchange for your donation, you must deduct the monetary value of the prize from the total of your original donation. That difference is the amount of charitable giving you can claim on your tax return.
You may also pay lower capital gains tax if you donate securities directly to a charitable organisation. As a bonus, the charity receives a larger donation because of your generosity.
Your charitable donations could reduce any estate taxes. If your gift equals the last two years of your income, your estate tax could be zero. This giving strategy allows you to care for your beneficiaries and support charities.
- Model and promote giving.
When you prioritise giving, you encourage others to give, too. Your example reminds your children, neighbours, friends, and loved ones to also contribute to the causes they care about.
- Feel useful.
Giving money or volunteering time to a charity gives you a sense of focus and purpose. You can feel useful and valued as you make a difference in the world.
- Boost happiness and emotional well-being.
Doing the right thing, exercising compassion and kindness, and helping others make you happy. Each time you donate, you participate in an emotionally positive experience that feels good and motivates you to make giving a habit.
- Experience lifelong benefits.
When you donate time to a charity, you meet new like-minded friends, learn new skills and invest in a worthwhile cause. These benefits can impact you for the rest of your life.
- Leave a legacy.
Set up a trust or foundation that continues to give after your lifetime. You leave a legacy and support your favourite cause long-term.
How to Choose a Charity?
With nearly 86,000 registered charities across Canada serving local, national and global needs, choosing one to give to can be a daunting task. Simply take your time and select an option that’s right for you. You won’t get your gift back, so investigating potential charities before you give just makes cents (see what I did there?).
First, discern if you like the charity and then ask yourself the following questions:
- Does the charity hold sentimental value?
- Has the organisation helped you or your family?
- Does the charity support a cause that’s important to you?
- Does the charity support your beliefs and values?
- Does the organisation accept the goods or time donation you’re able to give?
Next, verify that the charity is reputable. Find out if the organisation is registered, who the charity helps, if their efforts are effective, and how the charity uses financial donations. Discover this information through the organisation’s website or by calling them. You can also check the Government of Canada’s site for the status of a charitable organisation you’re considering getting involved in.
You may also want to consider donating to one of the small volunteer-run charities with annual budgets of under $100,000. As many as two-thirds of Canada’s charities fall in this category and transform their few donations into big results.
This holiday, make a decision to give back. Charitable giving supports organisations across Canada and it can be deeply rewarding for you too.
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