Tag Archives: charity

Can I Claim a Charitable Tax Deduction Credit for a Donation Made Outside of Canada?

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We help a lot of Canadian charities because we were both raised to believe that if you have you should share. One thing we quickly learned is that we can donate more to Canadian charities at the same total cost to us if we claim the donation on our income taxes. We also donate to some international charities. (And yes, despite what Pearson airport and Canada Post believe, the USA is actually *international!*) In the past, we haven’t bothered too much with the receipts for those foreign donations because we believed that they were not necessary for filing our Canadian income taxes. When I read the tax forms more carefully this year, though, I was left wondering if we could claim donations made outside of Canada to get a tax deduction.

What the CRA Says on Schedule 9 Donations and Gifts

This was the wording on Schedule 9 that caught my eye

“Donations made to the United Nations, its agencies, and certain charitable organizations outside Canada” (line 334)

The amount you enter on this new line 334 is added directly into your “Total eligible amount of charitable donations and government gifts” just like your gifts to registered Canadian charities.

So can you donate to international charities and claim it on your Canadian taxes? Which charitable organizations outside Canada are included in “certain?”

Which are the “Certain Charitable Organizations Outside Canada” and Which Aren’t?

I went hunting on the CRA website to find out if the health and children’s charities we donate to internationally are “claimable.” Here’s what I found:

Did the Queen Give it the Royal Nod on Behalf of Canada?

I found at http://www.cra-arc.gc.ca/chrts-gvng/qlfd-dns/qd-lstngs/gftsfrmhrmjsty-lst-eng.html
that

“A listed charitable organization outside Canada that has received a gift from Her Majesty in right of Canada is a qualified donee until 24 months from the date of the gift.”

A list of which gifts Queen Elizabeth II has made within the required time period is provided. For the 2012 taxation year, these include

  • Education Africa, in South Africa
  • The Rhodes Trust, in the United Kingdom
  • the Aga Khan Foundation, in Switzerland
  • and several others

The list is certainly not long!

Did One of Our Politicians Go to Uni There

At http://www.cra-arc.gc.ca/chrts-gvng/qlfd-dns/qd-lstngs/prscrbdnvrsts-lst-eng.html there is a list of international universities to which you can donate and claim the expense on your Schedule 9.

(Donations to most Canadian universities are also eligible. You can check by looking up the name of the university on the CRA website at http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html.)

So if you want to contribute to the University of Tartu, rest assured you can get back a portion of your contribution. (or donate more at no additional total cost to yourself) Or to the Maharishi University of Management, which I’m sure you know is in Iowa.

Gifts to the United Nations and Its Agencies Qualify Too

I could not find a specific list of United Nations agencies on the CRA website, so you might have to contact the CRA to determine if an agency is approved.

What Other International Gifts Can be Claimed on Schedule 9?

At this time, the UN and its agencies, foreign universities, and the organizations favoured by Queen Elizabeth II on Canada’s behalf are the only ones qualified. So our donations to help children in other countries and with world health issues are not eligible.

Still, if you did donate to one of those select few organizations, you should be sure to report your claim on Schedule 9. Assuming you have taxes to pay, you will be able to reduce them using the associated credit. Then you can use the money you didn’t have to pay in taxes to contribute more to the same or another charitable effort, at no additional total cost to yourself!

Do You Work Primarily in the USA or Internationally?

This information is intended for average Canadians who work in Canada, generally donate in Canada and pay taxes only in Canada. It appears that there may some other eligible donations that apply only in very specific circumstances, particularly for Canadians who work in the US (or other countries) and are paid in US dollars (or other currencies). If that describes you, you may want to talk to an accountant about which contributions to US (or international) charities you may be able to claim.

If you read the comments, below, you will find a very useful and detailed description of one case in which a taxpayer could claim donations made to US charities based on income earned in US dollars.

I don’t feel qualified to judge which international (including American) charities would qualify for this tax break in Canada. I’d recommend you look for a tax accountant who specializes in Canadians working abroad if you have a substantial donation that you wish to claim. (It’s possible that in that case you should be getting advance authorization from the CRA before submitting the claim.)

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Quick Tips about Donations to Charity

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Don’t Waste Your Money Paying Fundraising Companies for Gimmicks for Charity

Some years we get a gaggle of gimmicks in the mail from fundraising companies trying to get us to donate to charities. The most useful were the return address stickers. The least useful were the carrot seeds, although our guinea pigs liked the resulting sprouts. We’ve received note cards, fridge magnets, and posters too.

The idea is a simple one: the person who receives these “gifts” is supposed to feel guilty and send in a donation.

It’s very irritating.

It’s also a waste of money. I don’t want 50 cents of every 1 dollar I give to a cause going to a fundraising company. I also don’t particularly want to fill up my blue bin and garbage can with someone else’s idea of what I want.

Personally, I never send a contribution in response to these campaigns. (They can tell if you use the enclosed donation form and/or envelope that you were somehow motivated by their mailing.) I do sometimes donate to those charities, but I do it in other ways.

Perhaps if enough of us refused to give in to this emotional blackmail they’d move on to another technique, hopefully one that’s less expensive and less wasteful.

Watch Out for Scam Charities

We’ve probably all been accosted at the entrance to the grocery store by some rather awkward teenager asking us to buy a chocolate bar for charity. Before shelling out money for something you likely don’t want anyway, be sure to check a bit further as to what the charity is.

You likely know the schools closest to your store. If it’s one of them, it’s probably for real. But recently (or perhaps they have only been getting caught recently) there have been cases of criminal fraud. Teens have been hired to sell chocolate bars for a charity that doesn’t exist. You can read about what example of this in the Mississauga News.

So be a bit cautious.

You Can Give the Money and Refuse the Refuse

If I actually took delivery of a poinsettia from every person I know who is trying to sell them for their fundraiser I would be able to stock my own greenhouse. Similarly, anyone who looks like I do does NOT need to buy and eat any more chocolate bars, pre-buttered popcorn, chocolate almonds, or other snacks.

Most of these flowers and treats are being sold by my friends’ kids. Others are for reasonably worthy causes like a local youth outreach program. I don’t mind donating to these causes (even though there is no tax receipt involved) but I don’t want their stuff.

Guess what? You can give them the money and NOT take the item. It always startles people, but then they realize it’s a win-win. They can give my money straight to the group without ordering anything. In that case the group gets more money because they don’t have to spend part of it paying for something to give me. Or they can (and I suspect some of the ravenous boy band members do this!) take my donation and eat the treat themselves. Either way, their cause gets supported, and I don’t expand either florally or figure-atively.

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Do you have some other tips for managing donations to charity? Please share your tips and tricks with a quick comment. (or a slow one!)