Welcome to Giving Tuesday. While not too well known yet, it follows Black Friday and Cyber Monday as a relief to the consumerism that grips North America around the U.S. Thanksgiving weekend.

Charitable Giving 101 So, you married your “money-opposite” – join the club! One thing is certain – getting aligned on your financial life will bring riches to your married life.

Of course, there’s never a bad time to be generous. Knowing what your money can do for any number of charities, not-for-profits and religious organizations can be motivation enough. Many of these groups count on the generosity of their private donors to keep their doors open and to continue with the services they provide.

Gifts of $5, $100 and $1,000 are equally welcomed since no organization can survive with just a few large donors. And both the provincial and federal governments support donors by providing generous tax credits for eligible gifts.

In Canada, all charitable gifts are eligible for a tax credit – meaning you will receive a tax credit based on how much you give in cash, securities, life insurance or real property. (Unfortunately the time you volunteer is not eligible for any preferential tax treatment). In Ontario the amount you will receive is 15% for the first $200 of donations; and 29% for any amount donated above $200. This can really add up to a significant tax credit come tax time.

As an example, if you give $3,000 through the year, you will be eligible to receive $30 for the first $200; and $812 on the remainder – for a total of $842 back in your pocket as a refund.

And in 2013, there is a new tax advantage available for first-time donors. Canadians who have not claimed the Canadian Donations Tax Credit in any of the past five years will be eligible for an extra one-time credit of up to $250 in any of the years between 2013 and 2017. It is called the First-time Donor’s Super Credit (FDSC) and is available to Canadian citizens who give a charitable gift between 2013 and 2017 inclusive as ‘first time donors’. The maximum $250 tax credit can be received for charitable gifts of just $1,000, but smaller FDSC credits are available for smaller charitable gifts. To read more about this new tax credit, please visit:
http://www.cra-arc.gc.ca/gncy/bdgt/2013/qa01-eng.html

If you own securities (stocks, bonds, mutual funds, etc.) and wish to make a gift to a charity, you may want to consider the advantage of gifting the securities directly. Normally when a non-registered security is sold at a profit, tax is payable on half of the capital gains at your marginal tax rate. However, if the security is gifted to an eligible charity, no tax is applied AND you receive a charitable tax receipt for the fair market value of the security. That’s called a double-win – it’s another way the government supports charitable organizations and encourages us to be generous.

So if you have a marketable security with a capital gain (it has gone up in value since you purchased it), and you want to give a gift to a charitable organization, consider combining these activities by gifting the security. You can do so by contacting the organization directly, or by going to www.CanadaHelps.org – an easy-to-use giving platform for donors to easily manage their gifts with any number of charities. In fact, CanadaHelps now has more than 86,000 registered charities on its database, and has processed thousands of securities donations on behalf of its donors since 2007.

It’s hard to ignore the many benefits of giving as the year comes to a close. Charities are hoping for a year-end bump in donations, other not-for-profits are hoping that the holiday season will bring out the generous side of their donors, and then there are the year-end tax advantages of charitable donation receipts. Take a minute to reflect on all you have to be thankful for, and make a charitable gift as part of your holiday budget. The government will give part of it back to you in the form of a tax credit and the organization you give to will truly be thankful.

Happy Giving Tuesday. To learn more about Giving Tuesday, please go to http://givingtuesday.ca/

If you’d like to discuss any aspect of your personal finances, please consider my offer of a free / no-obligation consultation. We’ll discuss your financial situation and goals, and I’ll share my approach to money management with no judgements, no pressure and no product selling. Please contact me.