I’ve long held the belief that choosing to donate to worthy causes is a deeply personal thing. Some people donate their time. Others donate their money. Whichever you choose is the right answer for you. At the end of the day, I sincerely believe that donating to charitable causes is a very good use of money.
When I was growing up, door to door solicitations for money were are regular as the rising sun. In the world before call display, charities phoned people at home to ask them for money. Charities have since moved away from these forms of solicitation and have moved to online options. Today, ads are on social media sites and people can donate with their fingertips. It’s a very simple process for making an online donation to the charity of your choice.
Charitable events happen all the time. September 2020 was the 40th anniversary of the Terry Fox School Run. On October 4, 2020, there will be a Run for the Cure nationwide for the purpose of raising money to conquer breast cancer. You might want to give money to support a local animal shelter. Perhaps you want your charitable donations to go towards helping the homeless or towards keeping shelves stocked at the Food Bank. There are many, many worthwhile charitable causes, far too many for me to list in this blog post.
Tax benefits of charitable donations
The government wants to encourage taxpayers to donate money. Toward that end, the Canada Revenue Agency rewards people who make financial donations to registered charities via tax credits. The more money that you donate, the more tax credits you receive. Tax credits are very useful because they are set off against any tax that you owe to CRA.
CRA is willing to give you up to 29% of your charitable donations back as tax credits. On top of this, your province will also give you some tax credits. Talk to your professional tax advisor for the specifics that apply to your particular situation.
*** I am not a tax professional. If you need assistance with your taxes, talk to a qualified tax professional.***
Do some research first
Be smart as you donate. Do your research before you open your wallet. While your heart is in the right place, you want to make sure that your money goes to the right place too. Check out the charity that you want to support and make sure that it’s registered. You don’t want to send your money to a fraudster with an impressive website.
Charitable organizations do not run themselves. They’re required to employ people whose job it is to make sure that your donation dollars get put to their intended use. These employees are paid through administration fees. For every $1 you donate, some portion of it is siphoned away to pay for the daily operation of the charitable organization. The higher the administrative fees, the less money going towards the intended recipient of your charitable donation.
Once you’ve selected your charity, ask yourself if you’re okay with the percentage of your donation that will have to go to the administration fees.
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Weekly Tip: Donate to charity. It builds good karma.