Charities are an organization set up for public benefit, relief, and to provide aid to people in need. Their purposes expand multiple local, national, and international conditions, such as victims of war, natural disaster and catastrophe relief, hunger, disease, poverty and homelessness, supplying orphans with food and shelter, medical aid, and other fundamental needs.
- There are approximately 170 000 organizations in the Charity and Non-Profit sector in Canada. 85 000 of them are registered with the Canada Revenue Agency (CRA).
- Between 1997 and 2017, the total amount donated by Canadians increased from $4.27 million to $9.89 million, as reported by Tax Filers.
- 20.5% of Canadian Taxpayers donate to charity, with an average donation of $300.
- Canada ranks around 15 in the list of countries that donate the most to charity.
- 89% feel compassion for those in need.
- 85% donate to a cause that they personally believe in.
- 79% want to contribute to their community.
- 61% are personally affected by the charity’s cause.
- 27% donate for religious reasons.
- 23% donate to receive an income tax credit.
If you donate to a Canadian Charity registered with the CRA, you may be entitled to benefit from a Charitable Donations Tax Credit (CDTC).
The eligibility depends on the charity, the type of donation, and its value. To receive a CDTC, you will need to report it on your tax return. Use the CRA List of Charities to confirm if an organization is registered, and it’s eligibility. You can also use the Tax Credit Calculator to calculate your charitable donation tax credit. Only Canadian registered charities or other qualified donees may issue official donation receipts.
Examples of donations that usually qualify for CDTC:
- Ecologically sensitive land
- Certified cultural property
- Capital property
- Personal-use property (such as paintings, sculptures, jewelry, stamps, and coins)
- Inventory (such as art, antiques, and rare books)
Examples of donations that do not usually qualify for CDTC:
- Contributions of services (such as time, skill, and effort)
- The payment of a basic fee for admission to an event or program
- The purchase price of a lottery ticket or chance-to-win-prize, even if the lottery proceeds benefit one or more charities
- The payment of tuition fees (exceptions exist)
- Gift certificate donated by the issuer
What to Consider When Choosing a Charity
National or International
There are charities that work locally, nationally, and internationally. When choosing a charity, consider where and who the charity is supporting: developing countries, people inside Canada, the local area, or First Nations communities.
The charity should be financially effective, and have minimal administrative costs. It should also be financially transparent — check the CRA List of Charities website for further financial details to see if donations are being carefully applied and achieving impact.
Management and Human Dignity
The charity should provide a reliable program, and be respectful of the recipient’s dignity throughout their work, especially in their images and descriptions. It should consider the recipients’ health and wellbeing within a holistic model of development.
Tips to Avoid Donation Schemes
Beware of donation tax shelter schemes. These are arrangements where you get a donation receipt for more than the amount you donated. They take advantage of a charity’s ability to issue receipts for the private gain of the promoter and participants. Always refuse to donate if there are any signs of fraud.
Warning Signs of Fraud:
- Pressure to give right away
- Calls that thank you for a pledge you do not remember making
- Organizations that use names similar to popular charities
- Canvassers who do not want to give you details about about organization
- Requests to send cash, instead of a cheque or credit card
- Offers to send a courier to collect your money
- Asks personal questions
- Using free email addresses
- Strange display numbers
Confirm that the charity is eligible to give tax receipts. Learn about the organizations activities, and how it is managed. Write cheques to the charity, not to an individual. Make sure that your online payments are secure.
For More Information
CanadaHelps: Search engine that can browse by any category or keyword. Here you can donate online to any registered Canadian charity, and choose how you want to give.