Canadians Are Highly Charitable (however, choose your charity carefully)

• lack of control over spending of charitable funds
• poorly maintained books and records
• issuance of tax receipts in excess of gifts received
• failure to meet charitable activity spending requirements  

Facts on Canadian Philanthropy

• 5.7 million Canadians contributed $6.9 billion to charitable organizations in 2006.
• Statistics Canada reported that the total market value of stock held by Canadians at the end of 2006 was $1.4 trillion, an increase of $100 billion over the previous year
• Approximately one-half of that market value represents unrealized capital gains, suggesting that the opportunity for many shareholders to donate stock and save tax is very significant.
• TD Economics estimates that the market value of stock held by Canadians in 10 years' time could exceed $3 trillion, with as much as two-thirds of that in unrealized gains.

Demographic Trends

• Potential for philanthropy is immense: In Canada, between $15 and $20 trillion is expected to shift from parents to their children between now and the middle of the century.
• Baby boom generation is having significant impact on the world of charitable giving: not content to simply write a cheque and move on, donors expect transparency and accountability - they want to be involved.
• Many charities are revisiting the way they operate in order to attract these younger philanthropists.

General Rules

At some point during the year many Canadians give to charities. Those gifts, usually of money, will be claimed on Schedule 9 of the tax return. Unclaimed donations from the previous five years may also be claimed in the current year. Donations made through payroll deductions should also be claimed. These will show on the T4 slip. Generally you can claim all or part of your total donations, up to a limit of 75 percent of your net income reported on line 236. For the year a person dies and the year immediately prior, this limit is 100 percent of the person's net income.

It is generally most beneficial to claim donations made by both spouses together on one tax return. This is because the first $200 of donations is eligible for only a 15 percent tax credit, while any additional donations attract a tax credit of 29 percent. Combining donations will ensure the couple is subjected to the 15 percent limit on the first $200 only once, not twice.

Donations made during the year do not have to be claimed on that year's return and may be carried forward to a subsequent year, up to five years. This may be of benefit, if, for example, you already have sufficient non-refundable tax credits to completely eliminate taxes payable.

So remember, only donations made to Canadian registered charities and other qualified donees may be claimed. A registered charity will show its charity registration number on the receipt. The slip must also indicate the Web address of the CRA.

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