Many will tell you Thanksgiving is their favourite holiday of the year. There’s time with family and friends and no expectation of gifts.
For others it’s just a reflection of all they can be thankful for. I don’t say this lightly. This has been a tough fall for so many and I don’t know a person who hasn’t had reason to pause given the natural disasters and the even more recent attacks in Las Vegas and Edmonton. These were all horrific events.
The challenge is you can’t be expect to donate to every cause, even if you want to. Giving – whether financial or personal - should be limited to the resources you have available.
This holiday season is a good time to revisit your charitable donation strategy as a family. Share your values and talk about the causes you find you have a personal connection to. But, also be prepared to recognize that they could change over time depending on what life dictates.
An important part of the discussion is determining if you want to give locally, nationally or even globally.
Like any investment, it is important to do your homework. Administrative costs and other costs can sometimes eat up donations. Inefficient charities tend to enrich a few executives at the top without doing a lot of good overall.
How much of your charitable dollar is going to the actual cause? Check CRA's website to see if the charity is registered and eligible to issue official donation receipts, and view a charity's contact information and information return.
If you really want to make sure that your charity donations are doing the most good for the dollar, you can also become personally involved: Donate your time as well as your money. You can help by volunteering at charitable events, and performing a number of other tasks. Another possibility is that you could be named to a charity's board, and help make the decisions.
While tax receipts are nice to have they don’t tend to be the driving force for giving. Yet, it’s important to have a plan when determining how much you will give to a charitable organization. Meeting with an advisor can help you to determine the right amount, ensuring you are optimizing the donation and minimizing the tax impact.
And it's not always just about cash. Options such as stocks, bonds, mutual funds, segregated funds or life insurance could eliminate capital gains tax and would likely produce significant tax savings for your estate, as well as the charitable organization you are donating to.
Consider establishing a donor-advised fund a simple, tax-effective to support the causes that you care about. For $10,000, you can establish a donor-advised fund, an innovative, simple, and effective way to support causes that matter to you.
The bottom line is: You don't have to be a billionaire like Warren Buffett to make an impact. Money isn't everything and we can all give back just a little and yet make a big impact. Just don't make the mistake of reflexively donating to charities because you feel pressured or don't know how to say "no, but thank you for asking.”