Direct Government Dollars to your Favourite Charity or Cause
How can you get the government to give more money to your favorite charity or cause?
One way may be to lobby your MP or MLA. The prospect of a positive response would be less than certain, and the effort might not be the best use of your time.
A certain way to get the federal and provincial governments to support your charity is through their support of your contribution.
How does that work?
When you make a contribution that qualifies for a tax receipt, you get a credit against your income tax liability.
For the first $250 of receiptable donations, the tax credit is based on the lowest rate of tax. However, if your donations total over $250 during the year, the tax credit is then based on the highest tax rate, currently 43.7%.
If you have already made a gift of $250 in the year, another gift of $1,000 causes your tax liability to be reduced by $437:
Gifts that qualify for tax relief can be simple, such as giving cash. Or they can be a little bit more complicated by giving securities, or by donating life insurance policies, or they can be customized to suit your own estate planning goals.
One additional tax benefit of note relates to gifts of securities. Currently, if you give shares of a public company to a charity, any capital gain you have made on the shares is eliminated. You still get a full receipt for the gift.
For example, you give shares with a value of $1,000 to the charity with an ACB (cost) of $250. You get a charitable receipt for $1,000 and you do not have to report a gain. If you sold the shares your capital gain would be $750.
Regardless of the form of the gift, by making a gift to your favorite charity or cause, you are directing the governments of Canada and BC to support your charity as well.
