Calgary Herald - Charitable giving has social and tax benefits

By Mario Toneguzzi, April 17, 2011

When Micah Libin first started receiving a paycheque, it was only natural to start making donations to charities.

"It's important to me," he says. "One of my priorities is to help make the world a better place. There's no shortage of people calling and asking for donations. Almost all of them sound like great causes. So you realize quite quickly that there's more in it for you to say yes and give some money to some people. They need it more than you do."

Libin, 37, is chief financial officer of Greengate Power Corporation, chairs the fundraising aspect of the United Jewish Appeal.

With the tax deadline looming this month, many Canadians are sifting through their paperwork to find those receipts for charitable giving. Beyond the altruistic nature of giving, there are also tax benefits many Canadians may not fully comprehend.

"I have always been aware of the tax implications. My view is that the tax incentives impact the amount somebody gives," says Libin. "My view is that it does not impact the desire to give.

"I think the desire to make the world a better place is one of the core values that people have. It's what allows us to hope that tomorrow's going to be better and we're going to find cures for diseases and food for the hungry. The government respects that that's a very, very powerful urge and I think they are right to promote that through tax incentives. They'd be crazy to get in the way because I know that me and probably most Canadians feel quite a bit more committed to charity than to any particular political party."

According to Statistics Canada data on charitable donations in 2009, there were 5,616,340 donors in the country and the average age of donors was 53. The total amount donated was $7.75 billion. The median amount donated was $250.

In Alberta, there were 599,890 donors in 2009 for a total of just over $1.25 billion -second highest in the country behind Ontario's total of $3.5 billion. The average age of donors in Alberta was 50 with the median amount given $370.

Gena Rotstein, founder of Dexterity Consulting, Canada's first philanthropic brokerage firm, helps individuals, families and businesses donate their money, matching their social values with the most effective charities for them.

She says most people are not fully aware of the tax benefits of giving.

"I get asked a lot of questions around it," says Rotstein. "I think people know that they can get tax credits for their charitable giving and their philanthropy but I know based on some research that came out of the Association of Fundraising Professionals a few years ago that tax incentive is not the No. 1 reason people give.

"Part of it is that because it's not a motivator people don't feel like they need to be informed. But for those high net worth individuals where they really need to be looking at some of their capital gains issues, philanthropy actually makes smart business when it comes to setting up their giving plans or their wealth management plans."

Jo-Anne Ryan, vicepresident of philanthropic advisory services for TD Waterhouse, says during the financial market decline in 2008 charities felt the hit. And even though the markets regained in 2009 much of what they lost, there was still plenty of uncertainty and volatility.

"People do give a lot of stock that government eliminated the capital gains for donating securities in the federal budget of 2006. So a lot of people have really gotten used to donating securities when they have appreciated in value," she says.

"So in 2008 when they really didn't have any capital gains we certainly saw a slowdown. But I would say we have seen a pick up. The end of the year is often when people make their donations simply because people like to procrastinate. If there's a deadline, it motivates them."

TD Waterhouse runs the Private Giving Foundation, an independent public charity dedicated to encouraging charitable giving that has donated more than $16 million to charities.

"(Alberta) has the most generous tax incentives for charitable giving compared to any other province," says Ryan. "If you make a donation, you're going to get a tax credit of 50 per cent right back. And of course if you donate securities, you're going to eliminate the capital gains that you would normally have to pay. If you were to sell that security, 50 per cent would be taxed as income."

"Good tax incentives to give," she says.

mtoneguzzi@ calgaryherald.com

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