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Parties and Charities: The Tale of Two Tax Credits

“..lowering the charitable credit recognizes that people give for other reasons than tax rebates.” – Department of Finance Spokesperson, Metro News

It’s probably quite true that most donate to charity without expecting anything in return. The more sharp tongued of individuals might publicly ask if the same can be said of larger political contributions. Regardless, with Budget 2015, the tax credit for donations to political parties remains unchanged while that for charitable contributions over $200 drops to one of the lowest rates among provinces and territories. Falling from 21% to 12.5%, only Ontario (11.16% and Nunavut (11.50%) will have a lower rate.

My close-up charitable experience comes from volunteering with a food bank. To collect and distribute food across a city requires putting trucks on the road. So you can also factor in the rising gas tax as an increased price of doing business, and a driver of food bank demand as transportation costs raise the price of food. As I’ve mentioned before, food bank use is rising, in bad times and good.

How will the cut to the charitable tax credit impact food banks, and everyone who provides the services and supports that are used more and more as the economy sputters?

But D.D. Coutts, manager of communications for the Calgary Food Bank, said she believes many organizations, particularly those in the human services field, will be hurt by the move.

“We’re not concerned about people’s generosity because people were donating before there was any tax credit and are very generous to donate,” Coutts said. – Calgary Herald, Calgary charities worried about drop in donations after province cuts tax credits

The Edmonton Chamber of Voluntary Organizations, Calgary Chamber and Volunteer Alberta would agree, having launched their “Now is Not the Time” campaign:

Budget 2015 asks Albertans to pay more in taxes and fees at a time when many will have reduced earnings. Less disposable income means less money available to donate to charity.

When the economy slows, all forms of revenue for charities are reduced. Alberta charities are already seeing reductions in corporate donations and government funding continues to stagnate. At the same time, many charities are called upon to respond to increased community needs.

The tax credit reduction follows on the heels of the elimination of the Community Spirit Donation Matching program, which was also designed to incent charitable giving.

http://www.nowisnotthetime.ca/

A petition has also been launched at http://www.albertans4giving.ca.

This leaves Alberta’s charities and non-profits to do what they’ve always done. Maintain minimal admin costs, provide services and supports that the government does not, and do more with less as demand for services increases.

Lend them a  hand by continuing to be generous with your donations, and throw a letter to your MLA in with that as well.