Charitable giving

October 8, 2025

Charitable giving is voluntarily giving money, time or goods to support organizations that create positive change for people, communities and in society. Donations to charity can be made in many forms including the giving of cash, securities, personal time through volunteerism, skilled services, and goods such as food, clothing or furniture. In many cases, charitable giving combines philanthropy with the practicality of tax savings through the federal non-refundable charitable tax credit.

A tax credit is a specific amount subtracted from income taxes owing to the Canadian federal and provincial governments. A non-refundable tax credit can lower your tax payable to a maximum of zero, while a refundable tax credit can reduce your tax payable below zero resulting in a tax refund. All provinces and territories have similar tax credits, but the tax relief varies in each region.

Tax credit for charitable donations

Charitable donations are a great way to support the causes that you are passionate about. If you want the tax benefit from your charitable gift it is important to understand what is considered an eligible donation for tax purposes. For the donation to qualify for the federal charitable tax credit, a charity or another type of qualified donation recipient (donee) must be registered with Canada Revenue Agency (CRA). The Government of Canada website allows for inquiries to check their list of registered charities to find out if your donation is eligible for a tax receipt. When you receive your official donation receipt, be sure to review it for accuracy, ensuring it includes all the information required for the charitable tax credit.

A registered charity will supply an official receipt including:

• their official registration number
• serial number of the receipt
• date of the donation
• amount of the donation
• the donor’s full name
• signature of the individual authorized by the charity to acknowledge the donation

Many charitable organizations issue tax receipts immediately rather than being distributed in the new calendar year. The receipts may be received through mail or by email. Keep records of all donations in order to apply them to your income tax return. Volunteer work, gifts of goods such as food or clothing do not qualify for the tax credit.

CRA charitable giving limits

Individual taxpayers can claim donations of up to 75% of their net income, plus 25% of taxable capital gains realized from donated property. If the charitable donation exceeds the allowable limits, excess can be carried forward and claimed in the following five years after the donation was made. In the year of death, an individual can donate up to 100% of their net income in that tax year. If the donation exceeds 100% in the year of passing, the excess can be carried back and applied to the year before death, up to 100% of net income in that year as well.

Federal charitable tax credit

Individuals receive a federal non-refundable tax credit on donations made to a registered charity. The first $200.00 donated receives a 15% tax credit, with any amount above that limit receiving a 29% tax credit. The credit can be as high as 33% if a person’s income is above the highest marginal tax rate. To maximize the federal tax credit, it may be a good strategy to combine charitable donations for the entire family on one tax return in a single year or carry forward donations (up to five years). Pooling the funds together may bring the total donation limit above $200.00 which takes advantage of the higher percentage of the tax credit. The credit is calculated on the Schedule 9 section of the federal tax form.

Provincial charitable tax credit

Canadian provinces and territories have their own non-refundable charitable donations tax credit rate. Each jurisdiction has one rate for donations up to $200.00 with most applying a higher rate for amounts over $200.00.

Gifts of cash

The most common form of donation to a charity is in the form of cash. It is a straightforward and easy way to donate to a charity.

Gifts of securities

Instead of donating cash to a charity, an individual may wish to make a gift of publicly traded securities such as stocks or mutual funds. These transactions are specifically beneficial as any accrued capital gain is realized, however the gain is reduced to zero. This is advantageous in two ways as the taxpayer is not required to include the capital gain on their income tax, and they receive the donation tax credit. Consider donating securities with tax reportable capital gains vs cash to increase tax efficiency.

Protect yourself from scams

Registered charities play a significant role in society. They rely on support received through charitable donations to offer a wide range of services to help people in our own communities, across our country and in some cases around the world.

Unfortunately, fraudsters and scammers try to take advantage of donor kindness and generosity. It is important to donate wisely. Be aware and watch for signs of fraud and scams which may include:

• An organization that pressures you to give right away
• A call is received to thank you for a donation you do not remember making
• Organizations that use the title of well-known charities-but have a variation to the name
• Canvassers who do not have details about the organization or the work they do
• A call received has a strange or untraceable call display number which might mean the caller is trying to hide their identity
• An individual requests the donation to be made in cash, money order or gift card which are not traceable instead of cheque, credit card or electronic transfer which are traceable

There are many considerations when deciding to give to a charity. It is important to research your options to find charities that align with your personal values, beliefs and passions. A charitable donation can fulfil your philanthropic goals as well as providing financial benefits through the charitable donation tax credit. To help navigate all avenues and maximize benefits, seek out the advice of a qualified financial advisor or tax professional.

FirstOntario Credit Union in partnership with Aviso Wealth has an experienced team of advisors specializing in various areas of wealth management including retirement planning, investment management, estate and succession planning, individual financial risk management and more. These professionals are here to help you plan for the future and reach your financial goals. Visit FirstOntario.com/Investments or call 1-800-616-8878 ext. 1700 to connect with a FirstOntario advisor and start growing your wealth today – your way.

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc.. The information contained in this report was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This should be considered as a general source of information and should not be considered personal investment advice or a solicitation to buy or sell any mutual funds. The views expressed are those of the writer and not necessarily those of Aviso Wealth.