CRA’s relentless attach on donors, looking for reasons to disallow taxpayers tax credits from charitable donations is backfiring. When taxpayers stop donating, the poor suffer and the load on social welfare increases.

It was not to hard to figure out that if Canadians are going to have to fight CRA just because they want to help the needy and benefit from a tax credit to offset the amount donated, then the obvious answer is that they just don’t donate. With CRA out to disallow your tax credits, why set yourself up for abuse?

CRA is sucking and blowing at the same time. They say donate, but then they look to disallow the tax benefits that rightfully apply.

I am not saying this from hearsay, my business is helping abused taxpayers. As a result of what I see first hand, I have a very negative attitude towards CRA and their approach to taxpayers. To them unless you are a T4 salaried employee than you are assumed to be a tax cheat. CRA gets to be the way they are because Canadians have a distorted concept of the true CRA reality. The majority of Canadians are salaried, so most of them don’t get to see the dark side of CRA. Ask anyone who has been audited and you start to get the picture.

As far as I can see, CRA has put the nail in the coffin. I for one will now only help the needy by dealing directly with them, and I sure as hell won’t be submitting any charitable donations slips. I don’t need the aggravation, if CRA wants to disallow my donations, then they can have it… If I do happen to donate, I won’t use a charitable donation receipt for any tax savings.

To learn more about tax problems and tax audit solutions, go to www.taxauditsolutions.ca or [1] click here.

 Dan White

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Charities see alarming trends as donors become older, fewer
PAUL WALDIE
From Friday’s Globe and Mail
Published Thursday, Dec. 02, 2010 8:13PM EST
Last updated Friday, Dec. 03, 2010 7:12AM EST
391 comments
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Canada’s long tradition of supporting charities is showing signs of erosion.
The number of Canadians making charitable donations is falling sharply and the total amount donated has dropped by nearly $1-billion over the last two years. Meanwhile, the average age of donors has risen to 53, leaving many charities wondering where future funding will come from.

The trend is “troubling,” said Cathy Barr, vice-president of operations at Imagine Canada, an umbrella group for Canadian charities. She added that there is real concern that “the donor base is shrinking and that’s very worrisome.”

Figures released by Statistics Canada last week highlight a disconcerting trend for charities. The report showed that 5.6 million people donated money last year. That was down from 5.8 million in 2008 and was the lowest number of donors since 2002, when 5.5 million people gave money. In dollar terms, total donations dropped to $7.75-billion in 2009 from $8.19-billion in 2008 and $8.65-billion in 2007.

The participation rate – a measure of the percentage of tax filers reporting a donation – is even more troubling. Last year, 23.1 per cent of taxpayers claimed a deduction for making a charitable donation. That was down from 24.1 per cent in 2008 and marks a 30-year low. Not that long ago, nearly one-third of taxpayers reported a donation; now the percentage is less than one-quarter.

The recession and a crackdown on illegal tax shelters by the Canada Revenue Agency accounts for some of the downturn, but not all of it. In fact, the number of donors increased between 2007 and 2008 for the first time in years, an indication that Canadians are prepared to dig into their pockets during times of financial distress. And Imagine Canada estimates that even when the CRA’s move to revoke several tax shelters is taken into account, donations are still down.

“You begin to worry at a certain point, is this the hollowing out of the middle class? Is this the lack of social connection?” asked Malcolm Burrows, who heads philanthropic advisory services at the Bank of Nova Scotia. “It’s one thing for dollars to go up and down with the economy. It’s another thing for this long-term trend of donors disappearing. That is worrying.”

He and others say the trend indicates a growing gap between wealthy Canadians, who have largely continued to make donations, and the middle class, which has found giving difficult during tough times. Statistics Canada figures show that over the last decade the number of donors has fallen, but the median gift has increased from $190 to $250. That means fewer people are giving more money.

The average age of donors has also slowly moved upward, rising from 51 earlier this decade to 53 last year. Ms. Barr said that likely reflects tougher economic times for young people, many of whom are still struggling with the recession and the high cost of essentials like housing. But a bigger concern is that young people don’t seem to be getting into the habit of donating. “That is particularly troubling,” Ms. Barr said.

Targeting younger donors has been critical for charities like United Way Toronto, the largest United Way in Canada. The organization launched a GenNext campaign about four years ago aimed at people between the ages of 20 and 30. Julia Gorman, vice-president of resource development at the charity, said young people volunteer more and also want more information about where their donations go. This year the organization has held more than 1,000 presentations with donors and agencies supported by United Way to explain how donations are spent. “We’ve never done that before,” she said.

Ms. Gorman said the overall fundraising climate is difficult and United Way Toronto’s annual campaign is about one-third short of its $113-million goal with less than a month remaining.

Marvi Ricker, managing director of philanthropic services at Bank of Montreal, said the financial squeeze on the middle class is hurting many smaller charities. “I think that’s where the donations to smaller organizations, more grassroots types, are really going down,” she said.

But she remains optimistic, citing a recent study by the bank that indicates aging Canadians plan to give well into their retirement. And she takes heart from various efforts by teachers to get students interested in philanthropy. “More people are taking a different approach to giving,” she said. “They are doing philanthropy not just writing cheques.”