The Power of Giving
Julia Wise and her husband, Jeff, typically give 30 to 50 per cent of their income away. One year their charitable donations totaled about $160,000. Julia says it’s a way to help make the world a better place and will help teach her children about the family’s values. She says, “There’s always someone who needs the money more than I do.”
Do you faithfully carve out a percentage of your income to donate to charities? There are a number of compelling reasons why people do this. Most would like to see a “better world”. Sharing the wealth is one way to achieve this. Charitable giving is a very personal and private act of kindness.
Julia states she feels privileged to have acquired a good education which landed her a good job with a good salary. Her interview on CBC Radio Show “Out in the Open” is fascinating as she addresses the questions and ponders others’ concerns about their extravagant generosity. You can click here and listen to this podcast.
A Different Perspective
A change in our perspectives about the things that really matter was mentioned in a previous blog, When We Have So Much. Terry Aberhart, CEO of Aberhart Farms Inc. and Sure Growth Technologies Inc. (an agronomic consulting company), shared his experience on a trip to Ethiopia. I asked you then to imagine going without food, clean water to drink or bathe, and medication to treat a curable ailment. I believe most would find this unbearable because we have never lived in this kind of environment.
Sometimes role playing isn’t a bad thing when we get too comfortable in our day-to-day lives. I often think about what would happen if my life drastically changed, and I was living in poverty, and looking to the food bank for my daily meal. What if I had no shoes to wear? What if I had to sleep on a park bench? These role-playing scenarios sound like a bad dream but there are people who live this daily.
We can empathize with other people who are less fortunate than we are from a health perspective. Every year, the first weekend in March, the Kinsmen Telemiracle Foundation hosts a 20-hour telethon to raise money for people who require special needs equipment and access to medical treatments. The generosity tugs at your heart strings and brings tears to your eyes as you watch the dollars roll in and the words echo the message, “Which way are we going?” The only answer is “Higher”. This year was no exception. The Regina Leader Post headlines Telemiracle Smashes Record with more than $7.1 million in donations. The sum is an accumulation of both small and large donations. The largest donation ever was a bequest of $1.5 million from the late Dr. Philip Thacker, Professor Emeritus of the University of Saskatchewan and a Kinsmen member. Peoples’ compelling stories inspire others to donate and raise money in countless ways.
Philanthropists have their personal reasons for giving. In a rare interview for the magazine, Farming for Tomorrow, Mr. Jimmy Pattison said “The best thing that ever happened to me was that I had no money.” Today Mr. Pattison is patriarch to one of the country’s largest private companies – the Jim Pattison Group (JPG). Reading through the article, you learn quickly that he attributes his success to good values, honesty, integrity, and hard work. He has lived and strived through challenges and opportunities which make him grateful for the success he has achieved. Now he lavishly donates his money primarily to the health-care sector. The new Children’s Hospital of Saskatchewan in Saskatoon is one of the fortunate recipients of Mr. Pattison’s generosity. Last May, he presented a donation of $50 million towards the facility.
The Monetary Incentive
I am not entirely convinced that people donate money primarily to receive tax credits. From a financial perspective, this is certainly an incentive. Canada Revenue Agency rewards you for your generosity. If you have taxes owing, your tax credits are like gift certificates to offset your tax bill. The higher the amount of donations, the greater the tax incentive will be when you file your tax return. If you are limited to the amount you can donate in any given year, then you might choose to claim your donations together in one year. You are allowed to carry forward any donations in any of the next five years.
A lower tax rate is applied for donations of $200 and less; and a higher rate for donations over $200 for any given year. Here is the link to the federal and individual provincial donation tax credits.
Using this donation tax credit calculator is one way to determine your tax credit entitlement for your province of residency. The following math illustrates the credit for a Saskatchewan resident who has contributed $1,000 in donations.
Federal charitable donation tax credit
$ 30 (15% on the first $200)
$232 (29% on the remaining $800)
$262 is their total federal tax credit.
Provincial charitable donation tax credit
$ 22 (11% on the first $200)
$120 (15% on the remaining $800)
$142 is their total provincial tax credit
This Saskatchewan resident has a combined federal and provincial tax credit for 2017 of $404 ($262 + $142).
Never Too Small or Too Large
I believe that the majority feel a tug on their hearts to be generous with their money. No one can make someone do this. We have often heard a child use this phrase, “You can’t make me!” A small child may refuse to participate in a game or eat their veggies. But once they have had the experience, they are more willing to experience more of the same. I associate this with charitable giving or philanthropic giving. The ultimate payoff is witnessing the benefits of the donations. People find this rewarding and desire to do more good in the world. Philanthropists are financial helpers willing to promote the welfare of others, “especially by the generous donation of money to good causes which meets basic needs.”
Regardless of the amount of any donation, it’s the contribution that matters. Donations are not limited to size; they are not measured as too small or too large. In the end, the accumulated dollars create and impact a better world. Let’s all keep on giving whatever amount we can to a beneficial cause.