Giving Abroad...

The second question was; why can’t domestic Canadian charities funnel receipted donations to non-affiliated non-profit organizations?

The short answer can be determined in the definition of “total gifts”. Section 118.1 (3) defines what total gifts represent. They include four components. Crown gifts, cultural gifts, ecological gifts, and total charitable gifts.

Total charitable gifts are defined as gifts to:
• Canadian registered charities;
• Registered Canadian amateur athletic associations;
• Prescribed universities outside Canada;
• Certain tax-free housing organizations in Canada
• Canadian municipalities
• United Nations
• Charities outside Canada, to which the Government of Canada has made a donation in the year or the preceding year

This explains the individual limit on charitable contributions (to be eligible for a tax receipt). This ties right in to the question would people donate even if they could not receive a charitable tax credit. If their on willing to donate to US based organizations, then the answer is yes. We’ll debate that question tomorrow.

Canadian registered charities are not international organizations, nor do small charities have operations in the USA or abroad, nor do they have affiliated charities operating abroad with headquarters in Canada. ONLY donations to Canadian registered charities are eligible to receive a tax credit. Therefore donations to charitable works in the USA and the rest of the globe, are not tax deductible (except to the extent that it can offset American source income, that may be taxable to a Canadian resident).