COVID Response: Immediate Increased Charitable Donation Tax Refund

SAVE: Nonprofits, NPO Recipients, Canadians, Businesses & Government

April 24th, 2020

Help SAVE Charity Organizations by Rewarding Canadians with a Refundable Charitable Donation Benefit

Essential Service Emergency:

Charitable Organizations are at the front lines serving all Canadians, especially our vulnerable people. Charities provide essential services that are relied upon daily.

Due to the COVID-19 pandemic, the demand for their services has exploded while their revenues and resources have plummeted.

Charity organizations are starting to collapse.

Now more than ever, they desperately need our help to secure resources.
*Charitable Organizations are ready to receive immediate help from Canadians with donation channels already in place.
We can save them, with a speedy solution.

Speedy Solution:

  1. Award and incentivise charitable donations to Canadian charities with a Refundable Charitable Donation Benefit (RCDB).¹
  2. Empower 1.2M Canadian corporations to give more to support charities by increasing our giving power by matching current individual taxpayer 50% credit incentives.²
  3. Permit Canadian NPO’s (non-registered charities) to issue special 2020 tax receipts.³

Awesome Multiplier Effects:

  • Halo Effect -> Profoundly impact lives. For every dollar given, non-profit organizations provide up to 5x the value to the community in social and economic impact.
  • Ripple Effect -> By doing social good, Canadians are active participants in helping our own communities. Canadians are heros to each other. Next year, at tax time, we will be directly reminded about how our generosity made a difference and give again.
  • Hero Effect -> Community hero stories inspire national hope across Canada.
¹ Not all Canadians & Canadian corporations benefit from the current donation tax credit because many of them are not taxable or do not have taxable income. A RCDB makes all eligible donations refundable credits to all donors.
² Canadian corporations desire to support social good, inspire their staff and boost their public profile. They long to be financially empowered to forge long-term relationships with Charities in their communities. T1 Federal + AB credits = 50%
³ Approximately 50% of the 172,000 NPO’s are not permitted to issue official charity tax receipts. They have BIN’s.
Note: Burdensome grant applications require precious staff, time, expertise, new government infrastructure and require limited treasury funds right now.

Letter addressed to government leaders

Rachael Harder, MP for Lethbridge 255 8th St. S | Lethbridge, AB T1J 4Y1
Nathan Neudorf, MLA for Lethbridge-East #10, 550 WT Hill Blvd. S | Lethbridge, AB T1J 4Z9
CC: Canadian Federation of Independent Business (CFIB)April 24, 2020Non Profit organizations are the front lines of serving all Canadians. As of today, their revenues have plummeted, the demand for their services has exploded. With skeletal staff and volunteers, they are starting to collapse. We can save them before this happens. They desperately need revenue now. We have a simple solution to our urgent crisis.
Immediately incentivise, reward and empower all Canadians to give now to nonprofit organizations through donation channels already in place.
Some background: This past January, we wrote a letter to the Canadian Federation of Independent Businesses (CFIB), to advocate for an increased Charitable tax offset for Canadian Controlled Corporations. We believe these recommendations are an invaluable and innovative tactic in the COVID-19 response strategy to sustain the capacities of Canadian NPO’s, our country’s businesses, and to increase our capacity to provide essential services to Canadians in desperate need.
Desperate times call for innovative measures. We believe we need to go further than our original proposal. We need to extend this tax offset to all Canadians, corporations and persons. In addition, we propose that tax credits on donations be refundable. Many corporations and Canadians may not be taxable or have taxable income.

Canadians who can afford it, help those that can’t.

By implementing these measures at a corporate and personal level now, active investing will result in quantitative and qualitative benefits. Benefits cross economic, social, health, education, thought leadership, art, culture, housing, environmental, and other areas. NPO’s span the breadth of our country’s essential services and are relied upon daily.

This is an opportunity to set the stage as a world leader in innovative compassionate care measures, using organizations already in place. We can promote a culture of giving and compassion that Canadians are known for.Additionally, many of our Canadian based NPO’s are uniquely positioned to provide essential aid in ill-equipped developing countries where governments can’t or won’t help. They are collapsing by the hour. This proposed solution is a global, national and provincial response to a commonly shared pandemic.
Given the Halo Effect, an economic ripple effect of redirected dollars to NPO’s may be up to 4.77x economic & social impact for every dollar given to a charity.
With the rise of customers supporting social enterprises and conscientious corporations — 88% of consumers prefer supporting companies who give— what we suggest will lead to increased customer interaction and spending.  As a result, the economy is improved, profits increase, therefore taxes increase.
This is our opportunity to boost public profiles of NPO’s Canadian corporations, individuals, businesses and government.
In addition, Canadians and Canadian corporations will forge long-term relationships with NPO’s that will further be of mutual benefit. Donations will be distributed to the employees of NPOs. These employees will spend the money and be taxed on their income. This is a sizable return, given there are 500,000 not-for-profit employees in Canada (2,000,000 if you include government-run NPO’s like hospitals and universities). These not-for-profits provide essential services that the government would otherwise need to provide.
Corporations already give 4.5 Billion annually in Canada- fourteen times that of the 350M federal support for charities issued on April 21. If this tax rebate makes Canadian corporations feel only 5% more generous- then they just boosted their support to not-for-profits by 64% without spending a dime. Certainly, they could have been paid that in taxes- but it would be a fraction of that 225M donation. At this time, some companies remain financially strong. Let’s call on them to support those in need as well.
By leveraging Canadians to infuse revenue to NPO’s today, the treasury will not be further affected until tax returns are filed. Strained NPO’s are operating on shoestring budgets and staff. They don’t need cumbersome grant applications that require unavailable staff, time and expertise.
Additionally, please consider that the majority of non profit organizations are not registered charities which means donations to these equally important organizations would require a way to issue official receipts for tax purposes.
This makes sense. Not just logically, but in modelling a word-class culture of sacrificial, entrepreneurial, Canadian values.
Let’s build community together.

Together, we are better.

Thank you.

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Samantha Postman, MA-ABS, B. Mgt. Innovation Specialist

Sources can be given for statistics at your bequest. However, we are attaching an 8-page appendix report that includes the CFIB letter and the above data.
Updated notes to the original CFIB proposal dated January 13, 2020:

As at December 31, 2019, charitable donation tax offset rates for:

  • CCPC’s that qualify for the Small Business Deduction (SBD) are as follows for: Federal 9% — Alberta 2% — Combined 11%
  • For corporations that do not qualify for the SBD (Alberta): Federal 15.49% — Alberta 11.00% — Combined 26.49%

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