Alison Griffiths

Every year I vow to write this column earlier. But every year, the topic of charity somehow gets pushed aside by end-of-year spending, tax and investment tips. But charity should be top of mind long before the decorations go up.

I’ll do better next year. However, a last minute column on charitable giving is, perhaps, appropriate since many Canadians wait until the year is almost over to donate.

Though 84 per cent of Canadians make a financial donation (on average $446) at some point during the year, our government certainly doesn’t encourage us. Federal and provincial tax credits are paltry. The federal rate is 15 per cent on the first $200 donated and 29 per cent thereafter.

There are also provincial tax credits. They vary from 20 per cent (Quebec) to only four per cent (Nunavut) on the first $200 and from 24 per cent (Quebec) to 11.16 percent (Ontario) on the remainder.

The Canada Revenue Agency (CRA) offers an example. Someone living in Saskatchewan and donating $400 to charity would receive $88 in federal tax credits and a further $52 provincially for a total of $140, which can be used to reduce tax owing.

While getting back shouldn’t be a motivation for giving, it certainly makes sense to plan your donations to maximize the tax benefit. The credit is based on the total amount donated in a given year.

Be aware that only donations made on or before Dec. 31 are eligible for 2012 tax credits. You can also claim unused donations from the previous five years made by you, your spouse or common law partner.

Of course, you must give to an eligible charity in order to get a tax credit. The CRA has a handy tool that allows you to search for a charity’s status. If you can’t find a particular charity, make sure you have the proper registered name. Often charities use acronyms or slightly different names for operating purposes.

An organization might not be a registered charity but is a “qualified donee” and authorized to issue a tax receipt. Athletic associations, arts groups, some service organizations, municipalities or even an agency of the United Nations can fall into this category.

If you are still having difficulty finding a charity, it could be suspended or have had its registration revoked. The drop down menu on the CRA site allows you to search according to current status.

Once you input the name of a charity there is a host of information available. You can start by browsing the basics including when it began operating and where it is located. On the full view tab you’ll get the address and charity type and you’ll see the T3010 tax return.

Click on it and up pops Quick View or Full View. The former is a recent and welcome addition for donors. You will see a thumbnail breakdown of revenue and expenses. Most people want as much money as possible spent directly on the cause. The Quick View shows you how much goes to fundraising, management and administration. Some might not want to donate to charities that are involved in political activities. All of this information is available in percentages, dollar amounts and also presented as a pie chart.

It can be hard to determine what is a reasonable percentage for various expenses. One charity, for instance, may have some highly paid administrators, but as a result spends less on expensive fundraising campaigns.

MoneySense magazine gives some guidance in its annual Charity 100 where it ranks charities according to how efficiently they operate. The researchers also looked at governance and transparency, fundraising effectiveness and the size of reserve funds.

This is all clearly important information for Canadians. According to a Statistics Canada 2010 report (released in August 2012), 37 per cent of donors said they didn’t give more to charity because they were worried about how their money was being used. This is an increase from 2007 when 33 per cent expressed the same concern.

If you are serious about tracking where your hard-earned donation dollars go, it’s worth spending some time both with the Charity 100 and the CRA’s site.

One word of caution! There are few smaller organizations in the MoneySense survey so don’t dismiss a charity simply because it doesn’t appear among the top 100.

Also, a very deserving group might not be registered. An example is the 12-year-old, Ontario-based Basketeers which provides laundry baskets filled with brand new household items for women in shelters heading out on their own again.

No tax receipt, to be sure, but a worthy and effective cause.

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