Have you ever wondered, “How much should I give to charity?” or, “Am I giving enough?” The answer isn’t as always clear cut as many would hope because the amount you ultimately decide to give is a personal decision and completely up to you. But just like financial planning, you’ll want to develop a charitable giving plan to maximize and strategize your generosity. Don’t know where to start? Here are 5 questions you’ll want to consider when determining your overall personal giving strategy:
1. Have you decided which charities you want to support?
Taking the time to determine which causes you want to support should be the first part of your charitable giving strategy. Think about the causes you’re passionate about and research organizations you want to support. Do you want to support charities that work locally or globally? Do you want to support one charity, or many? You can read more about how to choose the perfect charity for you here . By choosing the charities you want to support from the start, you’ll stay in control of your giving and have a good sense as to which causes and charities you’ll want to give to.
2. How will you give?
From one time donations to monthly gifts, there are several ways you can make a financial donation to your favourite charity.
One of the most strategic ways to give is monthly giving. When you set up a monthly donation, you control how much you give each month and make your expenses more predictable and make you feel great giving throughout the year. Plus, monthly donations help charities too! With reliable monthly income, charities can better plan their spending because they have steady funds they can count on each month.
If you’re looking to make a larger donation and have financial investments, a donation of securities may be right for you. Since the elimination of the capital gains tax on securities donations in 2006, a donation of securities or mutual fund shares is one of the most tax-efficient ways to support your favourite charity and reduce your tax bill. Learn more about donating securities with CanadaHelps here.
3. Have you decided how much you will give per year?
Generally, a good starting place is to determine a percent of your income you are comfortable giving. Deciding to give a percentage of your income allows you to give what you can, even if your income changes. Generally 1 percent of income is a starting point for many. If you already give and live comfortably, you can challenge yourself to give a higher percentage of your income. Or, get creative with your budgeting! You can challenge yourself to give the cost of a daily latte instead of buying one, or to brown bag your lunch once a week and give the money you would have spent to your favourite charity.
4. Have you researched charitable tax benefits?
When making or re-evaluating your giving plan, remember to factor in the tax credits you’ll receive when you claim your charitable donations on your annual tax return. Taking into account how the money you’ll save on your tax bill can allow you to give more throughout the year. To help you determine how much you can save, we’ve created an easy-to-use tax calculator.
5. What other ways will you give?
Giving comes in all shapes and sizes and it all makes a difference. Whether you choose to volunteer or donate clothing, there are so many ways to give charitably without making a financial donation. Need some out-of-the-box ideas? Here’s a list of 14 creative ways to give charitably.
But don’t forget! Just like your financial plan, be sure to review and revise your plan on at least an annual basis. During your review, consider how much you’re giving. Could you do more? Are there additional charities whose work you value and would like to support, and how would they fit into your plan? Or are the charities you’re already supporting meeting your expectations and would it make sense to give them more?
To manage your giving strategy, a free CanadaHelps account allows you to monitor your charitable giving, set giving goals specific to your budget, and compare your giving to other Canadians. Learn more about how a free CanadaHelps account can help manage your giving strategy here.
At the end of the day, giving back to your community and those in need is a great feeling because you’re helping to make a positive change in the world, and an impact on individual lives. No matter how you choose to do it, you’ll feel great giving.
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