We usually talk about philanthropy and charitable donations in December, as the income tax deadline for the donation tax credit approaches.
However, a few things have compelled me lately to provide a mid-year reminder that, although Dollars and Sense talks about money all year long, it’s not the money that’s important, it’s what it can do for you, your family and your community.
We had the honour and pleasure of attending a dinner this week at the new Canadian Museum for Human Rights, the house that local and national philanthropy built. The event was held to present an international humanitarian award to Moe Levy, Executive Director of the Asper Foundation and one of the two people (along with Gail Asper) most responsible for the museum dream becoming a reality.
This is the first Canadian national museum ever built outside of the National Capital Region, and the first national museum built in 45 years. It is impossible to overstate this accomplishment, and it has been achieved here in Winnipeg. That’s no coincidence.
More than 65 individuals, corporations and institutions provided gifts in excess of $1 million to make this happen, and many, many other people have given what they can to help. This is a huge philanthropic inspiration, and the Museum will be a huge draw for visitors to our city.
However, in Manitoba, that’s just one example of the tremendous community spirit and generosity of our citizens, always near the top in Canada in terms of donations, volunteerism and helping our neighbors.
There are many, many organizations in our province that need our continued help and support. While some people have money to donate, for which they can receive a generous tax credit, other people donate equally important support by volunteering their time, expertise and goodwill.
On the money side, a quick reminder that every $100 donated to a registered charity will net you a tax credit of about $45 combined on your federal and provincial tax returns, after your first $200 of donations in that year. There is a smaller credit on the first $200 each year. This means combining all annual donations on one spouse’s tax return is wise.
If this will be your first year ever claiming a donation credit, there is an extra tax incentive. The government recently implemented a first-time donor’s “super credit” for the 2013 to 2017 tax years, on up to $1,000 of total donations. This gives you back an extra $25 credit on each $100 donation up to $1,000, starting from the first dollar of donations that year.
So, if you are a first timer, maximize that credit.
Another painless way to donate may be with appreciated securities, like company shares or mutual funds. If these have gone up in value since you purchased them, a sale will require you to declare a capital gain, and pay tax on half of that gain.
However, if you instead donate the shares or mutual fund units directly to a charity “in-kind” (rather than selling), then you get the full tax credit for the donation, and you can ignore the capital gain.
With Winnipeg Harvest recently becoming the second largest “city” in Manitoba, child poverty at a record level and all of the other needs in our community, your support is needed more than ever.
The Winnipeg Foundation is holding an information session May 20 at 1:30 PM at the Norwood Hotel, if you want to learn more about donations and planned giving.
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On a personal note, I have to brag a bit about our son, who provided me some added inspiration this past week. We were talking about things like donations and travel, and he said, point blank, that we should enjoy our money any way we want, and not think about leaving him anything.
When he declared, with a distinct tone of pride, “We will make our own… Don’t worry about us,” I have to admit to being a very, very proud parent.
Now, get out there and enjoy “spring”!
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Dollars and Sense is meant as an introduction to this topic and should not in any way be construed as a replacement for personalized professional advice.
Please consult legal, tax and investment experts for advice on your unique situation.
David Christianson, BA, CFP, R.F.P., TEP, CIMis a financial planner and advisor with Christianson Wealth Advisors, a Vice President with National Bank Financial Wealth Management, and author of the book Managing the Bull, A No-Nonsense Guide to Personal Finance.