To continue the momentum of fundraising for Hong Fook Youth and Family Hub, Hong Fook have launched Giving Tuesday campaign. Giving Tuesday is a global day of giving that happens every year after Black Friday and Cyber Monday. It’s a day for Canadians, charities, and businesses to come together to “do good stuff'' and celebrate the joy of giving. This year's Giving Tuesday is on Dec 3, 2019.
With the government budget constrain and increasing mental health services needs for East/Southeast Asian youth, your donation will help make a direct and concrete impact. For every $10,000 that was raised, Hong Fook’s Youth and Family Hub can provide 6 youths who experience mental health concerns, with intensive one-on-one services, as well as 20 youth and families trained with enhanced mental health knowledge and skills.
Giving Tuesday is also a great way to plan for year-end charity giving. Our Hong Fook donor and support Bob Lo, will share some tax saving benefits for donations.
Tax Benefits of Donating to Hong Fook
Written by Bob Lo, Hong Fook donor and supporter
Canada has a generous tax credit system for individual donors who make a donation to registered charities such as Hong Fook Mental Health Foundation. There are two important systems to pay attention to: the Charitable Donation Tax Credit and Donations of securities or mutual shares.
1) The Charitable Donation Tax Credit is a non-refundable tax credit. As such, it can only be used to reduce tax owing; if you do not owe any tax, you don’t get a refund. However, any unused donation tax credit in a year can be claimed in the next 5 years.
For Ontario resident taxpayers, your credit for the first $200 of donations is 20% and the balance over $200 enjoys a tax credit ranging from 40% to 50%. It is interesting to note that for many middle-class taxpayers, it is possible that the tax saving from making a donation is higher than his/her marginal personal tax rate.
Since Charitable Donation Tax Credit is greater for donations higher than $200, it may be worthwhile to accumulate donations and claim them in the same year. There are 2 ways to accumulate donations: you can combine your donations with that of your spouse’s or you can claim donations from multiple years together in the same year.
2) Donations of securities or mutual shares is the most efficient way to give charitably. With a donation of securities or mutual funds, capital gains tax does not apply, allowing you to give more and avoid paying capital gain taxes.
The following chart below illustrates what happens if an Ontario individual taxpayer in the top tax bracket sells the shares with capital gain and then donates the after- tax proceeds and what happens if he/she donates the shares directly to Hong Fook: