Charities affect the lives of hundreds of thousands of Canadians. Canadians believe charities are important, and expect them to make communities great places to live. Despite all that, donations have stagnated.
Imagine Canada cites research showing that “more than half of donors would increase their giving if there were better tax incentives.” They believe that the Stretch Tax Credit, which the Harper government failed to include in its last budget, could prod people into giving more, and thinking more about giving.
How it works
The proposed Stretch Tax Credit (STC) would boost the federal tax credit for donations that exceed an individual’s previous highest level of giving. For that extra amount, the credit on the first $200 would be 25% rather than 15%, and the credit for gifts over $200 would rise from 29% to 39%. And it would be available year after year to all donors who stretched their giving beyond previous levels.
Let’s see how it would affect someone whose previous highest level of giving was $100, and who chooses to give a total of $300 in the year the STC is introduced.
This individual increases her giving by $200. $100 of that falls into the first credit level, and her tax credit on that $200 would rise to $25 from $15. The remaining $100 qualifies for the higher credit level, which the STC would increase to $39 from $29. She receives a total of $64 in tax credits, instead of the $44 she would receive without the STC.
How you can help
Imagine Canada wants you, and all of us, to persuade our own Members of Parliament of the difference the STC would make to the impact that charities could make in their communities. They’ve published tips for communicating with your MP by letter or in person, and more information is available here.