Nonprofit Fundraising Gets a Boost from Government Tax Credit

I have often written about the state of nonprofit fundraising according to various industry research, surveys and data in posts like the Blackbaud Index Indicates Slow Nonprofit Fundraising Recovery in 2013, 2012 Nonprofit Fundraising Trends According to Industry Report and 5 Communication Trends in Nonprofit Fundraising According to Report. In October I reported on the Findings from The Chronicle of Fundraising’s How America Gives Report and how it’s important for local and state governments to encourage giving via incentives or special tax benefits. It’s been demonstrated that states with charitable tax policies have resulted in an increase in donor revenue. It seems that Canadian charities will now be putting this theory to the test.

image taken from pinterest.com/imaginecanada

A new First-Time Donor’s Super Credit was announced last week in which Canadian donors could add 25 percentage points to the Charitable Tax Credit for donations by individuals who have not claimed a charitable tax credit since 2007. Applied only to donations up to $1,000 the program will increase the regular 15% tax credit to 40% on donations under $200, while the usual 29% credit will increase to 54% on donations above $200.

It’s clear that the Canadian government has understood the needs of the sector and the timing of this announcement could not be better as many nonprofits continue to struggle through uncertain economic times and the demand for services continues to grow. Marcel Lauziere, President and CEO of Imagine Canada, the national umbrella for Canada’s charities and nonprofits estimates that this would generate upward of $110 million each year from new Canadian donors. He sees this as a step in the right direction in which it will “encourage more Canadians to give so that we can broaden the donor base in Canada, and to encourage those who already give, to give more.”

Other steps in the right direction planned for 2014-2015 by the Canadian government includes expanding the Hiring Credit for Small Businesses which nonprofits also qualify for. It will give them access to an overhauled job program in Canada Jobs Grant which replaces Labour Market Agreements. The previous program (LMA) provided aid to job seekers that did not qualify for Employment Insurance, the overhaul will now include financial assistance to help organizations train employees, matching employers contributions up to $5,000.

Now is a good time for nonprofits to start developing fundraising and work force strategies to ensure they are capitalizing on these changes to maximize supporter engagement and fundraising revenue. The new First-Time Donor’s Super Credit will open up a new group of potential donors that will be interested in supporting causes they value. The Hiring Credit for Small Businesses can give organizations the boost they need to train social media and/or digital marketing resources that they previously may not have been able to afford. These two initiatives by the Canadian government will certainly have an impact on the Canadian fundraising landscape. Hopefully it will lead to stronger fundraising revenue in the years ahead.

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Miratel Solutions is a Toronto call centre, eBusiness, and letter shop mail house specializing in professional fundraising services including telephone fundraising, online fundraising, lottery services, donation caging, donation processing and other donor management services. We are committed to our CSR business values in all contact centre services and mail house operations and advancing the missions of the nonprofits we proudly serve.