If you’re a Canadian, you see charities in action every day. From hamburger fundraisers in front of the grocery store, to students waving car wash signs at the corner to the amazing work of your local service clubs… charities are doing good for Canadians everywhere.
Charitable giving is top of mind during the holiday season when the theme of “giving” is presented to us in every TV commercial and newspaper advert. And while we’re out shopping for those we love, it’s hard not to think about those less fortunate than we are.
“When you support charities, you help make a positive impact on the daily lives of all Canadians, including yours.”
Ted Leyzer, CPA, CA, LPA, Partner
Millards Chartered Professional Accountants
Ted Leyzer, CPA, CA, LPA and Partner at Millards Chartered Professional Accountants in Brantford says that giving to charities brings value to your community but can also have a positive impact on your personal bottom line.
In this two part web series about registered charities that parallels a video series published by the CRA, we’ll look at ways to ensure that your donations make a difference for both the organization you’re donating to as well as you, the donor.
“Canadian registered charities and other qualified donees can provide donors like you with an official donation receipt. That receipt can translate into a substantial tax credit.”
Leyzer says that there is an important distinction to be made between “registered” and all other organizations and individuals that might be vying for your donations.
What does it mean to be registered?
Registered charities are different from not-for-profit organizations, like clubs and sporting leagues, because they operate under a specific set of rules that are administered by the Canada Revenue Agency. There are over 85,000 registered charities in Canada and they all abide by rules that dictate how charities need to conduct their business affairs.
These rules direct organizations:
- about being sure the money they raise goes to charitable activities;
- about keeping proper books and records;
- about sharing their financial and activity information with all Canadians annually through the CRA—; and
- lots of other things you can read about by visiting the CRA website at cra.gc.ca/donors.
“In return for sticking to the rules, charities earn the right to a charitable registration number. That number is important to you because when you make a donation, Canadian registered charities and other qualified donees can provide donors like you with an official donation receipt.”
That receipt can translate into a substantial tax credit and that tax credit can have real value for you when you do your income tax and benefit return.
To qualify for a tax credit, it’s critical that you are dealing with a charity that is registered with the Canada Revenue Agency.
“As Canadians, we all make an effort to be accountable for the things we do. Registered charities are accountable too… to all Canadians, including you.”
In part two of this series, we’ll review the ways that a tax credit can be applied to your income tax and help you reduce your income tax.
Ted Leyzer, CPA, CA, LPA and Partner at Millards Chartered Professional Accountants is actively involved with Brantford CYO Basketball and enjoys working with kids and helping them stay off the streets. His practice areas include auditing and accounting services to credit unions and hospitals and municipalities and providing corporate and personal advice to owner-managed businesses.
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