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As the financial year comes to an end and the holiday seasons approaches, Mrs. SPF and I have been reflecting on our personal finances which are now very much under control and quite sustainable. As we plan for 2011 we recognized that our finances are strong but that we felt something was missing. We felt as though we were not giving back to the community in which we live with our human or financial resources. It is not as though we didn’t give anything to charity, but we felt that we could, and should do more.
We sat down and looked at our current balance sheet and budget and determined we can afford to give more to charity and that this is the time of year to do so. Why now? First, this is a time of year where many are in need. The holiday season can be extremely difficult for those who are less fortunate than ourselves. Second, we feel that we were too focused on purchasing presents for people who appreciate them, but are hardly in “need”. Third, we believe that investing in our community has great value. Lastly, we recognize that charitable contributions in Ontario/Canada are tax deductible so while we are out of pocket today, we will receive a significant portion of our donation back from the tax man. We decided that we would donate $1020 to charities in 2010.
We decided to split up our donations relatively evenly. We gave:
- $150 to the local Women’s Shelter
- $150 to the Youth Emergency Shelter,
- $150 to The Alzheimer Society,
- $150 to a Children’s Foundation (for abused kids),
- $150 to the local food share,
- $150 to the AIDS network,
- $100 to the Humaine Society and a smaller
- $20 donation to “Mowvember” which is a cause where men in Ontario grow moustaches during the month of November to gain donations to raise funds for prostate cancer.
These organizations all have specific meaning for us and we felt they could use some financial assistance.
How do charitable tax deductions work? To encourage donations, the federal and provincial governments provide a two-tiered credit system. The amount up to $200 qualifies for a tax credit at the lowest tax rate. The amount over $200 qualifies for a credit at the highest tax rate.
For us, based on the $1020 figure we will get the following tax relief:
15% Federal + 5.05% ONT = 20.05% on the first $200 = $40.10
29% Federal + 11.16% ONT = 40.16% on the other $820 = $329.31
Total: $369.41 tax refund. We will be out of pocket $650.59. This investment in our community will return 36.5%.
We feel this is the right thing to do given our circumstances. We bought a house and a Subaru this year and paid for our wedding in full in the Fall of 2009. We have been able to pay some lump sums against our mortgage and a personal loan. We replaced our computers this year, I bought some tools and Mrs. SPF purchased some hobby items. We can surely find room to give to our communities. For 2011 we are discussing running a contest on this site where we will donate $50 on the behalf of 5 readers as a contest.
Sustainability for our souls.
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Wow, it is amazing! You are doing such a great job! Every year I tell myself that we need to step up and do more. The world would be a much better place if we all push ourselves to give a little harder. :-)
Thanks Aloysa! We decided it was time to step it up.
Congrats you two!! This is definitely something to be proud of. If we could all do so well at helping others. Thanks for setting such a great example.
Just doin’ our part Miss T. Always feels good to help those less fortunate.
That’s excellent! I think investing in your community is a great cause. I’ll definitely enter to win $50 for charity. ;)
Great retireby40! Look for us early in the New Year when we run the contest. We’ll likely use multiple ways to get entries ;)
Wow, quite amazing you managed to do all that in the same year! We too give quite a lot to charity and I feel simply good about it. Are the charities you chose all the “Canadian” part of those societies? Do you know if the tax deduction work the same if you give to a foreign association?
Hi DNW. Yes, these were all the Canadian versions of the societies. According to: http://www.cra-arc.gc.ca/E/pub/tp/it110r3/it110r3-e.txt
“Most foreign charities or foreign affiliates of Canadian charities are not
qualified donees, and thus, gifts directed to them are not eligible for an
official receipt. However, certain foreign charities can issue official
receipts for Canadian income tax purposes. If you wish to make a gift to a
foreign charity, the Client Assistance Section, Charities Division at 1-800-
267-2384 can advise you as to whether the charity is qualified to issue an
official receipt for income tax purposes. “