How Much Can I Afford to Donate to Charity?


Like many Canadians, you might be wondering “How much can I afford to give to charity? How can I budget for charitable giving? Is there a smarter way to give?”

The average donation to registered charities in Canada in 2008 was less than $700 in households with gross incomes of more than $100,000. A Fraser Institute Study called, “Generosity in Canada and the United States” revealed that in Ontario, we were giving only 45% as much as those in New York.”

The reason for this is simple:

Most Canadians don’t have the confidence or knowledge to be donating larger amounts of money because no one has ever taken the time to explain to them how much they can afford to donate and the benefits that come along with it.

I believe that if Canadians had a better handle on what they could afford to donate, in many cases they would be comfortable giving more.

To help with this, TriDelta has put together a free and easy online tool called the Donation Planner, which answers the basic question:

“How much could I afford to give?”

The donation planner looks at how much you can afford to donate to charities each year, how much this will save you in taxes, and what your estate will be worth AFTER these donations.

In many cases, the number will surprise you.


How much Can I afford to Donate to Charity?

Benefits to Charitable Giving in Canada


Tax and Financial Benefits to Charitable Giving in Canada

When it comes to charitable giving in Canada many people believe, “My estate will handle it. They can have it when I die. What’s the rush now?”  Many people are losing the personal and financial benefits gained from charitable giving due to this attitude.

Asher Tward, VP of Estate Planning at TriDelta Financial writes, “The majority of Canadians do not have the knowledge  of their financial situation to create enough confidence to donate larger amounts of money while they are still alive. Many would be surprised to know how much they can afford each year! Without a plan for charitable giving while living, it could be financially costing you . You will pay more taxes than necessary, diminish the size of your final estate for your loved ones and give less to charity than you could have. There are many financial and personal benefits of charitable giving now, rather than waiting.”

Financial Benefits

1) Receive an immediate tax credit of roughly 45% or more, depending on the province you live in.

2) Save the tax on the growth of the money that you will never use in your lifetime. By giving it away now you won’t have to pay tax on the future growth.

3) Take advantage of additional tax benefits by the gifting of shares. You don’t have to pay capital gains tax on donations of qualifying shares.

4) Depending on how you donate, you may still benefit from the principal and be able to control the assets, while receiving annual tax benefits.

5) Eliminate paying some probate fees as you no longer own the asset.

Personal Benefits

1) See the impact and benefit of the wealth you have worked so hard to earn and save.

2) Involve and inspire others to do more and participate in giving.

3) Get more involved in things that make you feel good.

4)  Derive joy and a feeling of importance from seeing your name associated with a donation.

5)  Create a legacy and tradition of philanthropy.

We have a free and easy online tool called the Donation Planner.  It shows you how much more you can afford to donate each year, how much taxes you will save, and AFTER these donations, how much your estate will be worth.  Try out the Donation Planner so you can be in a position to decide whether you want to give more while you are living.

After trying out the Donation Planner, you may be interested in reading about how to leave a legacy without being wealthy.

How to Leave a Legacy for Less: Affordable Giving


How can you leave a legacy for less? Here is one way of making a major charitable contribution, even if you are not wealthy.

To learn how much you can afford to give each year, try the free and powerful analytical tool designed to determine your yearly donation capability: the TriDelta Donation Planner.

As an example, let’s say you are 50 and in decent health (assuming a 35 year life expectancy). You are able donate $1,000 a year to your favourite charity.

Here is what you could do:

Donation Amount $1,000 a year
Cost $550 per year, after tax credits 


or $19,250 over 35 year period

Effective rate of return on this “investment” 10% (after tax credits)
Total Gift possible to your favourite charity $162,000

Shouldn’t  it be a total of $35,000? Where does the $162,000 amount come from?

The $162,000 gift comes from a life insurance contract, with the charity as the beneficiary and owner of the policy. Each year, the premiums on the life insurance is about $1,000 in total, so instead of giving directly to the charity, you keep the insurance. The payout on this insurance is $162,000 upon death. If you had $10,000 a year premiums, you could afford to give almost $2-million.

The only drawback is that the charity will not receive your donation until the end of the 35 year period.

Make it a gift to a parent and benefit a charity sooner

If you wish to give sooner and witness the benefits,  you can use the same strategy (with the same charity as the beneficiary), but take out the life insurance on one of your parents.

For example, a 50 year old may have a 72 year old mother in decent health. The charity would most likely benefit sooner, you would be able to witness the donation, and this can also be a gift to a parent who feels close to their house of worship or particular charity.

Here is an example where you put in $2,000 a year into a plan for your 72-year old mother if she survives to the age of 87:

Donation Amount $2,000 a year
Cost $1,100 per year, after tax credits 

or $16,500 over 15 year period

Effective rate of return on this “investment” 12.7% (after tax credits)
Total Gift possible to your favourite charity $49,000

If you are interesting in leaving a legacy or making a large charitable contribution, do not assume your wealth does not permit it.

To get inspired, learn more about Leaving a Legacy and Donation Planning in Canada.