Aside from the good feeling you can get from donating to an organization you think is important, giving to charity has the added perk of giving back to you in the form of a tax credit.
“We’ve been very dependent on government funding, but that has been dwindling steadily,” says Cindy Weeds, administrative coordinator of YouthCo, Canada’s only youth-driven AIDS prevention and services agency. “We’re becoming increasingly dependent on donations. We rely on the community to support us.”
It’s a common plea from not-for-profit organizations doing community work: government money fades and the group needs to become self-sufficient with funding, fast.
The list of such groups is large, and their need for money is too. There are 50 advocacy, social justice and HIV/AIDS service providers listed in Vancouver’s Gay and Lesbian Business Association directory alone.
While donations to such charities might help reduce the amount of tax money you owe the Canada Revenue Agency, it’s important to note that they won’t actually lower your taxable income; they’ll just give you credit on the money you owe the government.
“The amounts donated to registered charities-if you have a receipt-can lower your taxes. That’s the bottom line,” says Sharon Gill, communications manager for Canada Revenue Agency.
The receipts are the key. No matter how much you donate or how often, in order to use the donations on your tax return you must keep the receipts. Clearly, the more you give, the larger the tax credit you’ll get.
“The tax reduction is based around the amount you donate. Under $200 gives you 16 percent credit and over $250 gives you 29 percent credit,” says Doug Freeman, a certified general accountant who works in the West End.
“No amount is too small for us,” says Weeds.
For a donation to be eligible for inclusion in a given taxation year, it has to be made before Dec 31. (Although this year there is an exception because federal Finance Minister Ralph Goodale extended the deadline until Jan 11, 2005 for donations made to the tsunami disaster in southern Asia.)
“Most people don’t plan their donations unless it is an especially large sum,” Freeman says. “The average person will give from $50 to, at a high end, a $5,000 or $10,000 donation.”
But be warned: if you’re donating to an organization and plan to claim the tax credit, make sure it’s an officially registered charity.
“If you have concerns check our website,” urges Gill.
Canada Revenue Agency has an official list of registered charities that will provide tax receipts to those who donate. The list is updated weekly and is very thorough, although it can sometimes be a bit hard to track down the group or charity that you want. For example, The Centre on Bute St is listed under “Pacific Foundation for the Advancement of Minority Equality” or PFAME; and A Loving Spoonful can be found under “Vancouver Meals Society.”
* For a complete list of registered charities check out: www.cra-arc.gc.ca/tax/charities/menu-e.html
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