Cut in provincial tax credit has charities concerned

Ted Bosse of the fundraising committee for Edmonton's new $14-million Corpus Christi Church says a provincial government cut to the tax credit for charitable donations will lead to a drop in donations.

WCR PHOTO | THANDIWE KONGUAVI

Ted Bosse of the fundraising committee for Edmonton's new $14-million Corpus Christi Church says a provincial government cut to the tax credit for charitable donations will lead to a drop in donations.

April 20, 2015
THANDIWE KONGUAVI
WESTERN CATHOLIC REPORTER

Catholic charities are crying foul at the recent Alberta budget cut to the tax credit for charitable donations.

Once among the highest in the country, the credit has been reduced to 12.75 per cent from 21 per cent for donations more than $200 ndash; meaning less incentive to give money to charity, including the Church.

"I'm disappointed that the Alberta government would choose to do that," said Connie Lunde, director of development at the Edmonton Archdiocese. "For Canada, Alberta's was the most generous tax credit for charitable giving so it is disappointing that that's one of the ways they want to save money."

Those Albertans who donate to charity (and use the tax deduction) donate more per capita than anywhere else in Canada, and the giving is slowly increasing.

However, the budget stated the credit has had "limited success" in encouraging higher total donations since it was increased in 2007.

The government added that decreasing the credit to 12.75 per cent will save $90 million annually ndash; a conclusion Ted Bosse, a member of the fundraising committee for Edmonton's Corpus Christi Parish, finds "unconscionable and shortsighted.

"I don't believe that the direct attack on charitable donors is going to net the government any increased position because for every dollar they save in terms of tax rebates to charitable gifters, they're going to increase the social cost of the province by probably $1.50."

In Alberta, donations over the first $200 used to receive a 50 per cent tax credit when combined with the 29 per cent federal tax credit for charitable giving.

With the cut to the provincial tax credit from 21 per cent to 12.75 per cent, Albertans will now have a combined tax credit of 41.75 per cent for charitable gifts.

"Charitable donations will, I'm convinced, they will go down, because there's something beautiful about saying 50 per cent and when you have to start saying 'Not quite 50 per cent' now, it makes a difference," Bosse said.

However, Lunde said many donors are not even aware of the tax credit when they give.

"Overall ndash; not just within churches or religious organizations but across the general population ndash; tax credits are a very low motivation for giving. It's very low on the totem pole for reasons to give," she said.

MULTI-YEAR PLEDGES

For those who are aware of the tax credit, the reduction for charitable donations will especially impact donors who have made multi-year pledges for major capital campaigns such as the new Corpus Christi Church, said Bosse.

Connie Lunde

Connie Lunde

Construction on the church is well underway, with nearly $6 million of the committee's $14-million target raised to date, including a number of five-year pledges.

"People have done their financial gifting planning based on a certain tax reality," said Bosse.

The tax benefit that some people with normal incomes get for their contributions is part of what allows them to contribute as much as they do, he said.

Gerry Turcotte, president of St. Mary's University in Calgary, said the cut in the tax credit will directly affect donors across all levels of the giving spectrum.

"Needless to say, we are disappointed at this decision," Turcotte said in an email. "We can only hope that the government reconsiders this decision, and that donors continue to support institutions like ours at such a difficult time."

VULNERABLE PEOPLE

Bruce Klanke, vice president of community engagement at Catholic Social Services, said he is optimistic the reduction of the tax credit for charitable donations will not hurt the agency's fundraising campaigns.

Donors to CSS are mainly motivated by their desire to help vulnerable people, Klanke said, adding he doesn't expect the change to have a significant negative impact on donations.

Our donors share our mission of providing for those most in need and in being the hands of Christ to them, he said.

Donations at the agency have remained steady over the years despite previous changes in the tax credit, he said.

"So I can't see a strong link between donation levels and the tax credit but that said, we just don't know.

"We're going to have a year that's going to be tough economically and that's going to have some taxation change so we'll see how the numbers are affected but I think people will remain generous and they will continue to give."