Every year, the taxman releases statistics about the tax returns filed by Canadians. The most recent stats were released by the Canada Revenue Agency in 2013 (for the 2011 tax year), and provide a glimpse into what we're like as taxpayers. In particular, I wanted to look at those statistics to see how generous we are as Canadians – well, insofar as our tax returns can reveal that type of thing.
Where we stand
It's interesting to note that, of the 26.3 million tax returns filed in 2011, 22.4 per cent claimed donations of some amount. The average income reported was $42,607, and the average donation claimed was $1,607 – or 3.8 per cent of income.
It gets a little more telling when you break it down by level of income, as shown in the accompanying table. Looking at those earning between zero and $30,000, 7.1 per cent claimed donations, and the average amount of the donations claimed was $752, or 5.5 per cent of the average income in that bracket. Compare this to those earning between $60,000 and $100,000, where 43.6 per cent of taxpayers claimed donations, and they donated on average $1,411, or 1.9 per cent of the average income in that bracket. Finally, consider those earning between $100,000 and $150,000: 54.4 per cent claimed donations, and gave on average $1,813, or 1.5 per cent of the average income.
Normally, you would expect that those who are earning much more than others would have an ability to part with a greater percentage of their income when giving back. Our tax system certainly works that way: The higher your income, the higher the percentage of your income you'll pay in tax. But when it comes to charitable giving, it's the lower income taxpayers who make the greatest sacrifices because, although they give away less in absolute dollars, they are giving away much more as a percentage of income.
What's concerning about the statistics is that a full 56 per cent of those earning over $60,000 and 35 per cent of those earning over $150,000 claimed zero donations on their tax returns.
Parrot on the perch
As I contemplate my own level of giving, I have to confess that I may suffer from something that many Canadians suffer from: the Poverty Mentality. It's a mindset that can cause us to give away less than we may be able to afford.
I recall a number of years ago, when Carolyn and I were on a Caribbean cruise with our kids (who were very small at the time), an experience at a café in St. Thomas. The café had no walls – just a patio and grass roof for shade. Our son, Win, spent the better part of an hour watching some parrots that were perched next to us at the café. There was no cage around the birds. But there they sat. He asked me why the parrots didn't just fly away.
When the parrot-keeper came by, we asked him: "Why don't the parrots fly away? Have you ever lost one?"
"No, I have never lost a parrot yet," he replied. "I have trained them all to think that their perches are where they will be safe and secure. Once they believe this, they wrap their claws around the perch tightly, and they won't let go. It's almost like they have forgotten how to fly – although I know they could fly if they tried."
I think that sometimes I'm a lot like those parrots. And many other Canadians are, too. We have been taught to cling tightly to our money, as if it represents that perch of safety and security. And just like those parrots, we've trapped ourselves with the beliefs and emotions that we attach to our money. Clinging to our money doesn't actually bring freedom. We'll never know true financial freedom until we're willing to let go of some of what we have.
Who experiences greater financial freedom: The person who hoards his money because he's concerned about having enough, or the person who gives generously because he recognizes that he has what he needs? And giving generously looks different for everyone. Not all can give the same amount.
According to the statistics, those earning less than $30,000 gave on average $752 in 2011. Those earning more than $150,000 gave on average $8,048, but the former gave more than double as a percentage of their income. Generosity looks different for everyone.
As we wind up 2014, consider what you can do to help others by being generous. Want some inspiration? Visit ilikegiving.com and read or watch some stories of generosity.
