“No one has ever become poor by giving.” – Anne Frank
Canada’s charitable landscape is shifting. Fewer philanthropic Canadians claim charitable donations on their tax returns each year, yet total giving and the average donation have reached record highs—signalling a quiet concentration of generosity among a smaller group of committed households.
For families with the capacity to give to charity, this creates both responsibility and opportunity: how you structure charitable giving now can shape the resilience of the organizations and causes you care about for years to come.
It can also have a significant impact on your personal finances thanks to the potential tax benefits, of course.
Recent data from Imagine Canada and CanadaHelps show that the share of tax filers claiming a charitable donation has fallen to about 16.8%, down from roughly one in four less than two decades ago. At the same time, total claimed donations climbed to approximately $12.8B in 2023, and the average donation per donor reached a new high in inflation‑adjusted terms. In practical terms, a smaller pool of donors is carrying more of the load for Canadian charities, with older and higher‑income households contributing a growing share of annual donations.
Charities already face rising demand, higher operating costs, and greater pressure to invest in digital tools, all while relying on a donor base that is aging and shrinking. For wealthier Canadians and families with established financial plans and the means, thoughtful charitable giving has become less of a “nice to have” and more of a pillar in sustaining organizations and causes that support your community.
When generosity becomes concentrated, the way large gifts are made matters as much as the amount. A one‑time charitable gift can certainly help, but a charitable giving strategy—planned over years, not weeks—offers charities more predictable funding and can enhance tax efficiency for the generous. This often involves choosing among many ways to give: monthly donations, gifts of securities from an investment account, in‑kind donations, bequests, or establishing a donor‑advised fund or private foundation.
For example, donating to a charity “in-kind” can include publicly listed stock, mutual funds, or other qualifying securities directly, often eliminating the capital gains tax that would otherwise apply if the investment were sold first, while still providing a charitable donation tax credit based on the fair market value at the time of transfer. The result can be higher net support for the charity and potentially greater savings for the donor compared with writing a cash cheque of the same size, as demonstrated below.
Source: Mackenzie Investments. (n.d.). In-kind donations — tax benefits of in-kind donations [PDF].
This approach serves those in the highest tax bracket well, as there’s an escalator effect on the federal charitable donation tax credit (CDTC):
In Canada, the federal and provincial governments offer a combined tax credit for eligible donations to registered charities, subject to annual limits based on a percentage of net income. The federal tax credit rate is higher for the portion of donations above a modest threshold of $200, and provinces layer on their own credits, so larger gifts can attract a more meaningful outcome relative to smaller ones. For many households, this structure means that the after‑tax cost of a charitable donation is significantly lower than the amount on the tax receipt, especially when planning is coordinated across spouses and across donations in the year.
To claim the credit, Canadians must receive a tax receipt from registered charities and donees that meet Canada Revenue Agency (CRA) requirements, and those slips are then reported on the individual’s tax return for the relevant calendar year. While it can be tempting to focus solely on the deduction‑like impact, the more durable value tends to come from integrating charitable giving into broader tax planning and wealth management decisions rather than treating it as a year‑end scramble.
| Tax Tip:You don’t have to claim the full eligible amount of a charitable gift in the year you make it. You can carry unused amounts forward—up to five years for most donations, or ten years for ecologically sensitive land made after February 10, 2014—and each amount can only be claimed once. If you use a carry‑forward, apply those past amounts before claiming credits for new donations and keep a clear record of what you’ve claimed and what remains |
For families making larger or recurring gifts, structure becomes an important part of philanthropy. A donor‑advised fund, for example, allows a household to make a charitable donation to a public foundation, receive a tax receipt in the year of the gift, and then recommend grants to Canadian charities over time, effectively creating a flexible charitable giving program without the administrative burden of a standalone private foundation. Others may prefer a strategic charitable giving foundation of their own, where governance, family involvement, and long‑term intent are central priorities, even if they’re more complex by nature. In our experience, private foundations can lend an entire family a shared mission while also teaching younger generations the importance of financial stewardship—these benefits alone can make them worthwhile.
These vehicles can help align a giving plan with broader investment management and estate objectives, such as smoothing donations across years with variable income, involving the next generation in philanthropy, or coordinating gifts with the sale of a business and related capital gains. Whatever the structure, CRA rules and the need for accurate official tax receipt documentation mean professional advice and legal guidance are essential before making large or complex gifts.
In an era where a relatively small group of donors provides a large share of sector funding, how those donors choose to give can either amplify resilience or deepen fragility. For households already inclined to give to charity—or those considering making a charitable donation for the first time at scale—the combination of thoughtful structure, inter vivos gifting, attention to tax advantages, and a clear giving strategy can help optimize your charitable impact while maintaining alignment with your financial plan.
There are many ways to give, and each carries different implications for tax, liquidity, and family dynamics. Coordinating charitable giving with your financial advisor and qualified tax professionals can help ensure that when you donate to charities or establish longer‑term vehicles, you do so in a way that supports your community, reflects your values, and creates a lasting contribution to organizations and causes that matter most to you—all while building a legacy of making a real difference.
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