By John Tabet, November 10, 2020
This is the first article in a two-part series on charitable giving. Read Part II here.
Over the last number of years, my interactions with clients have shown a clear and undeniable trend: today’s investor is moving away from the conventional separation of wealth creation and personal values, and more towards the complete integration of socially conscious priorities into the holistic wealth planning process.
On the investment side, this often takes the form of increased interest in socially responsible investment funds, which in recent years have gone from a market niche to a core offering for virtually all asset management firms.
Different types of donations
There are three main ways to make monetary donations:
For most people in the wealth accumulation stage of their financial journey, charitable giving will involve annual donation amounts ranging from hundreds to thousands of dollars, spread out over multiple charities or focused on a single cause.
When you donate to a registered charity you become eligible for tax credits, making charitable giving a win-win for both you and your charity of choice. Let’s look at an example:
- The combined federal and provincial tax credit on her $1,000 donation reduces her income tax bill by $361.38.
This example represents a fairly straightforward case, but our tax rules include a number of other provisions that can enhance your credit amount and add significant flexibility to how you claim your credits. These include:
Charitable giving is one of the best ways to meaningfully support causes that engage and inspire our natural impulse to help those less fortunate than we are and join with those dedicated to making our world a better place. Working with your Investment Advisor and accountant can make this immensely satisfying activity financially beneficial for you as well.This article is a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.