30 Nov 2018

How does the charitable season affect your business?

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How does the charitable season affect your business?

It’s that time of the year when we think about family, but as an additional thought, we think to those less fortunate.  We are grateful for those who give up their time to assist those people and sometimes need some financial assistance themselves.

What is the difference between a registered charity and a non-profit organization?

Registered charities: These are charitable organizations, private or public foundations, that are created in Canada and recorded as a charity with the government.  A registered charity provides a receipt for funds received which is tax deductible.  Resources they receive are used for charitable activities.

Non-profit organizations: These are associations, clubs, or societies that are not charities. They are for social welfare, civic improvement, pleasure, recreation, or any other purpose except profit.  Funds given to Non-profit organizations are not tax deductible.

Helping with Fundraising:

You have decided to help raise funds for your chosen charity, what now?

Registered charities in Canada often depend on donations to carry out their charitable activities. Fundraising activities are often necessary for the charities to raise funds for them to be able to assist them in assisting others.

Canada Revenue Agency accepts that you will have some reasonable expenses. Keep in mind that fundraising is not a charitable activity, your registered charity must use the funds raised to support its charitable purposes.

Calculate your charitable tax credit:

With the current tax laws, when you donate, you can claim two different tax credits, federal and provincial tax credits. When donating to any charity registered with the Canada Revenue Agency, you can claim credits for donations of up to 75% of your annual income.

For the first $200 of donations, a federal credit of 15% can be claimed, and a credit of 29 % can be claimed for any remainder of funds.

In any one year, you may claim:

  • donations made by December 31 of the applicable tax year;
  • any unclaimed donations made in the previous five years; and
  • any unclaimed donations made by your spouse or common law partner in the year or in the previous five years.
  • You can claim eligible amounts of gifts to a limit of 75% of your net income

Once you have determined your donations total, use the  Charitable donation tax credit rates table to calculate your charitable tax credit.

Tips for donating wisely:
  • use the List of charities and other qualified sources to confirm that the organization is eligible to issue official donation receipts
  • learn about the organization’s activities and how it is managed
  • beware of donation schemes that promise a tax receipt for more than you donated
  • write cheques to the charity, not to an individual
  • make sure that your online payments are secure
  • refuse to donate if there is pressure to give right away, or if there are any other signs of fraud
All information was detained while reading the Canada.ca website:


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