Charity selection

Charity selection, i.e. choosing the charitable organizations deserving your support, can be daunting task. There are over 86,000 registered charities in Canada, and many more non-registered non-profits, from numerous sectors. The choices are primarily influenced by personal beliefs and preferences, but the information and links below may provide some guidance.

Tax deductibility

Canada and provinces offer significant non-refundable charitable tax credits.

The first $200 of charitable donations generally results in tax savings equal to the lowest marginal tax rate. And donations in excess are at or close to the top tax rate, depending on the province or territory where a taxpayer lives. (...) Take, for example, an Ontario resident with a salary of $50,000. They would save $40 on a $100 donation after the first $200 of donations. At $100,000 of income, the savings would be $46 on $100 of donations. At $250,000 of income, the savings would be $50.

So if the tax credits are of interest to you, make sure the organization you want to give money to is a Canadian registered charity and can provide an official donation receipt.

In any one year you can claim:

• donations made by December 31 of the applicable tax year;
• any unclaimed donations made in the previous five years; and
• any unclaimed donations made by your spouse or common law partner in the year or in the previous five years.

Charity selection criteria

Your values and beliefs will play a big role in selecting one or several charities. So typically the #1 criteria is what issue or problem you are most concerned about.

However, there are also other criteria potentially worth considering, so that your donation has the maximum impact (e.g., ).

Mission, governance, donor reporting

• Clear, well thought out mission
• How well governed is the charity?
• Active in Canada or internationally?
• Quantity and quality of relevant information provided by the charity (donor reporting)

Financial

• Financial transparency (e.g., publicly available financial statements, preferably audited)
• How much is the charity spending on administrative overhead and fundraising, versus program costs?
• Are its programs delivering measurable results, i.e. what is the social impact?
• Funding need (financial reserves versus annual program costs)
• Are salaries of top-paid employees reasonable or extravagant?

Exclusion criteria

A charity might be screened out if it does not fit your selection criteria. But beyond that, there are some specific red flags to watch for.

• Is the charity making emotional appeals?
• Somebody calls you, emails you, or knocks on your door to encourage you to give to a charity that you've never heard of; at the very least, do your own research before giving
• You are offered a receipt for a donation that you did not make or for an inflated amount

See also

• Donating appreciated securities
• Tax planning

Further reading

• Financial Wisdom Forum topic: "Charity Recommendations"
• Financial Wisdom Forum topic: "Which Charity Is The least Worthy Of A Donation"

External links

• Top 100 Rated Charities (2022), Charity Intelligence Canada
• Top 10 Impact Charities (2022), Charity Intelligence Canada
• Five-Star Charities, Charity Intelligence Canada

• Strategies for smarter charitable giving, MoneySence, 2020