For $256 on an after-tax basis, it could be possible for your charitable giving to have a $3,000 impact.
A recent study revealed charitable donations of Canadians have declined in recent years. That's in part because many people have seen the prices of goods and services increase while incomes have remained flat.
But for people looking to make a difference, there are some powerful incentives available that can increase the impact of your charitable dollars. Here are three:
1. First-Time Donor's Super Credit (FDSC): Save up to 74.4 per cent
Introduced in the 2013 federal budget, if you haven't claimed a charitable donation on your tax return since 2007, you can qualify for an extra 25 per cent in federal tax credits for the first $1,000 you donate.
Since provincial tax rates vary, the actual tax savings is slightly different in each province. A $1,000 donation on an after-tax basis would be $256 in tax savings for someone in Quebec and $389 for someone in Ontario. To find out how much your savings would be, you can use this handy online calculator.
Even if you don't qualify for the FDSC, the after-tax cost of donating $1,000 would range between $361 and $494 (this can be determined using the same calculator as above).
2. Employer matching for charitable donations : +100 per cent impact on your donation
Many companies will either match employee contributions or provide a monetary gift based on the value of volunteer hours. We all have lots going on at work, so it can be easy to forget, or perhaps we never knew in the first place. Just ask your HR contact if there is an employer matching program and if there is, ask for the required forms.
3. Government matching for Typhoon Haiyan relief: +100 per cent impact on your donation
The federal government has offered to match donations made to registered Canadian charities that operate in the Philippines and the other affected areas of Typhoon Haiyan. But you have to act fast: the deadline is Dec. 23. For more information, visit the Foreign Affairs, Trade and Development Canada website for detailed information and to make sure that your donation is going to be eligible for matching.
If you qualify for all three programs, a $3,000 impact could be made for as little as $256 to $389 (depending on which province or territory you live in) on an after-tax basis. Keep in mind that if you make a $1,000 donation now, you won't realize the tax savings until you file your taxes next year.
Not everyone has $1,000 to donate, but any small amount can make a big difference. Qualifying for any of these extra incentives makes that difference even bigger.
Preet Banerjee