The holidays are a busy time of year. It can be easy to get caught up in the excitement of Christmas and New Years and forget about those less fortunate than us. December 31st marks the end of 2014, and it’s also the last day for charitable donations this tax year. Have you contributed to a worthy cause in 2014? If not, the clock is ticking – there are many charities in need of your funds for 2015 and beyond.
Canadians Giving Generously in December
Not only is December a popular month for shopping, it’s a busy month for giving. Nearly a third (30 per cent) of charitable donations is made in the last month of the year, according to CanadaHelps, a non-profit organization serving Canadian charities and donors. In fact, 10 per cent of donations are made in the last three days of December alone.
Religious charities continue to be the most popular among donors, accounting for 21 per cent of the total number of donations and 32 per cent of total dollars given. Social and health charities again have secured the number two and three spots, respectively. Together, religious, social and health charities account for 60 per cent of all donations in terms of number of donations and dollars donated.
Although many people still make donations in person, it’s the Internet that’s seeing strong growth. Internet donations are up by 13 per cent in the number of donations and 18 per cent in the dollars donated. The average online donation this year is $120.42.
How to Choose a Charity
With so many worthy causes to choose from, it can be hard to pick just one. “We often say that people will continue to lead with their heart, but make sure it’s guided by their head,” says Paul Nazareth, vice president of Community Engagement at CanadaHelps. “(You) should think about what kind of impact you want to have. Who do you want to help? From there, think about whether (you) want to give locally or internationally and look up the charities that do that.”
Some people are worried their money isn’t going to the people who need it most. To make sure the charity is helping those in need, Nazareth recommends visiting the website Charity Focus, a partner of CanadaHelps. There you can look up the financial information on over 85,000 registered charities in Canada. This useful tool pulls the reporting data straight from Canada Revenue Agency, allowing you to quickly see a charity’s expenses and how much is spent on the charitable purpose.
Other Ways to Give Back
The holiday season can be a busy and expensive time of year. If you are feeling strapped for cash, there are other ways you can give to charities.
“This is the time of year where people can get creative with their gifts,” says Nazareth. “(You) don’t always have to give with funds. There are many different ways people can give.”
For example, Nazareth says organizing a blood drive or volunteering at a food bank, as non-financial ways you can give back to the community. You don’t just have to donate money. Nazareth says he’s seen an increase in unconventional giving like donating Air Miles.
The Tax Benefits of Donating
To encourage people to donate to charities, the government offers incentives in the form of tax credits. Tax benefits of making charitable donations, including the First Time Donor Super Tax Credit. Nazareth recommends speaking with an accounting professional to ensure you’re maximizing your donation tax credits.
“There are a number of limitations for the First Time Donor Super Tax Credit,” says Nazareth. “(The tax credit) only works up to (donations of) $1,000; you can’t have given for the last five years. It offers a bump up on your donation. You can get a higher donation credit.”
CanadaHelps also has a handy tax calculator to help you maximize your charitable tax credit.
If you’re thinking of donating, there’s no better time than the present. Be thankful for all that you have and give to a worthy cause today!
Sean Cooper is a pension analyst by day and financial journalist by night, living in Toronto, Ontario. He is a first-time homebuyer and landlord who aspires to be mortgage-free by age 31. Follow him on Twitter @SeanCooperWrite and read his blogs and request his writing services on his personal website.