I’ve noticed recently that more and more stores are raising money for different organizations, one dollar at a time. They also seem to be asking for more personal information.
Inevitably after making a transaction at the checkout counter, the questions begin:
“Would you like to give us your mailing address?”
“Your e-mail address?”
“A sample of your DNA?”
“Would you like to make a one dollar donation to the poor and starving children’s fund?”
Now, at this point I don’t want to either look like a Scrooge or act like one. Nor do I want to give away any personal information or give my charitable donations one dollar at a time.
“Mom, why don’t you want to give any money to the poor and starving children’s fund?”, my nine year old asks me. “Don’t you care about children that don’t have anything to eat”, she wonders, her sad puppy eyes looking up to her Mom. The same Mom who is trying to instill values and compassion in her daughter.
I also find at this time of year our mail box is filled with letters from different organizations soliciting funds. There are many worthy causes out there. It’s sometimes difficult to know where to donate.
These are our personal rules for charitable giving.
1) Confirm the organization is a registered Canadian charity.
You can confirm that a charity is a registered Canadian charity on the CRA website. The CRA has stringent guidelines for registered charities and non-profits. Every year more there are more applications for charitable status and every year there are organizations whose charitable status is revoked. Be sure to check regularly. One other issue to watch out for is the specific name of the charity. The Canadian Breast Cancer Foundation is a legitimate registered charity. The Canadian Women’s Breast Cancer Foundation has had their chartable status revoked and can no longer issue receipts.
2) Research how the funding is allocated.
You can do specific searches for charities on the CRA website. There you can see funding budgets and what percentage of funds goes towards specific areas. You can also find out how they raise funds, how much money is coming in and what percentage goes towards fundraising and salaries. It’s a great way to find out where your charitable giving goes.
3) Give in a way that aligns with your values.
There are thousands of worthy charities and non-profits in Canada. Give where your values are and in ways that you support where the money is being spent. Not particularly religious? You may not want to donate to an organization that spends a lot of it funding on missions. Have cancer or heart disease in your family? You may want to support something that supports research in a specific area.
4) Have a plan for how much you want to give and who you’ll give to.
If you have a plan and a budget for your charitable giving, it’s a lot easier to turn down other requests. It’s one of the other reasons I don’t like to donate a dollar at a time. We track our spending and if I added a dollar every time I shopped, it would appear I spend nothing on charitable giving and my grocery budget increased. This way we have a plan and can track how much is left if our budget for charitable giving.
5) Get an official tax receipt.
I’ve heard people argue that it’s not true giving if you’re doing it for the tax write-off. Regardless of whether you claim your receipt or not, the charitable organization needs to give you a receipt. This keeps the charity or non-profit accountable to the CRA. It also ensures your money is going where you want it to go.
We don’t give to organizations who solicit door to door or by phone. We also don’t give at stores that would like to add a dollar to our purchase. Sure, they may be doing great work but I like to budget for our charitable giving, claim the deduction and I’d rather not give the credit for giving to a corporation.
Later I explain to my daughter that we do give to many different organizations. I tell her a little about each so she’ll understand that we making donating our time and resources a priority and we give in a way that aligns with our values.
This is not about whether you should be giving to charity. It’s for those who’d like to give but want to make sure their funds are being used wisely.
For more on the tax implications and deductions of charitable giving, check out these posts.
Kathryn works in public relations and training for a non profit. In her off hours, she volunteers as a financial coach helping ordinary Canadians with the basics of money management. Her passions include personal finance and adult education. Kathryn, along with her husband and two children live in Ontario.