Giving to Charity: Do it Wisely
It’s difficult to avoid getting caught up in a spending frenzy at this time of year. Everything looks so shiny and pretty, and you think to yourself: “It’s a gift, so it's OK to go a little overboard, right?”
But take a moment to think it through when you’re riding a wave of Santa-calibre giving spirit. Overzealous spending will not only cost you dearly in the new year, but it will leave you less likely to earmark a little cash for people who are truly in need of monetary help.
This is the time of year to make a donation to one of Canada's deserving charitable organizations. In order to maximize your donations and make sure it doesn’t fall off your to-do list, here are some tips to make your contribution count:
1. Do it all at once. The holidays are a busy time, so make donating to charity as easy as possible. Giving can take only a few minutes if you do it online, and if you’re unsure where to allocate your funds, try a site like CanadaHelps.ca, where you can give to any charitable organization in Canada. 3.9 per cent of your donation will go towards banking and service charges, but it’s a one-stop shop and extremely user-friendly. You can search for organizations in your particular areas of interest (like animals, museums, children’s health, food banks, etc.), and they provide you with a donation receipt for tax purposes right away.
2. Skip the checkout donations. Stores step up their requests for charitable donations at this time of year (eg. Toys 'R' Us or Shoppers asking for $1 at the point of sale). It’s a method that works: Walmart Canada raised $10.1 million last year through point-of-sale donations. But if you really want to maximize your donating power, you’d be better off skipping the $1 donation. For one, giving at the till won't get you a receipt for your donations (and they can add up). And secondly, donating a few bucks might make you feel like you’re off the hook for the season, when you could probably be doing more.
3. Focus on only one or two charities. Instead of donating a small amount to many charities, give a larger amount to only one or two organizations. The charities will get more bang for your buck, as it cuts down on administration and banking fees. If you really want to spread the wealth to several causes, focus on only one or two organizations this year, then switch it up next year, and again the next.
4. Make it count, tax-wise. Consider giving at least $200, to optimize your tax credits. The federal charitable tax credit is 15 per cent on the first $200 donated, and 29 per cent thereafter, with a total gift limit equal to 75 per cent of your net income. You will also get a provincial tax credit, which varies according to what province you live in (for example, Quebec’s is the highest at 20 per cent for the first $200 donated, and 24 per cent on subsequent amounts). So if you plan on donating less than $200 in one year, you might be better off holding on to your donation until next year to get maximum credit. Figure out what your tax credit will be using this Tax Credit Calculator.
5. Make sure your charity is registered. The earnest door-to-door representative may sound very compelling when he or she rings your bell, but if you’re not familiar with a charity, be sure to check this website to ensure it’s actually a registered charity. Otherwise, your receipt won't count for much, as far as tax credits are concerned.
6. Set up monthly donations. To be sure you never forget to donate again, set up monthly donations from your bank account to your charity of choice. You can do it through CanadaHelps, and many workplaces also offer the option to make regular donations to organizations like the United Way through your paycheque.
Shelley White is a Canadian freelance writer, editor and TV producer who contributes regularly to The Globe and Mail, The Huffington Post, The Grid and Spinner.com. Shelley is also a mother of two who aspires to never again carry a credit card balance.