Protect your privacy
Protect your privacy
Have you ever donated to a big charity and suddenly found yourself on the mailing list of several others? That’s because some organizations swap donor lists — a kind of mutual back-scratching — but only if you let them. “The laws are different in each province,” Seale explains, “but what’s common is that the charity needs your permission in order to share or trade your name.” Usually it requests permission with a check box on the donation form. “If you don’t see a check box, make sure you express your desire not to have your name traded,” she says. All charities must have a privacy policy, usually available on their website, that explains how they treat personal information.
Beware of tax shelter promoters
Donate a few hundred dollars to a charity and knock thousands off your tax bill? That’s the promise peddled by some tax shelter promoters using lines such as “By saving taxes, you save lives.” Don’t believe it.
While many tax shelters are legitimate, a number of for-profit companies in Canada are promoting a plan designed to exploit the tax laws governing charitable giving. The basic idea is this: You purchase a work of art, or medicines for developing countries, or some other product (which you often never see) and the promoter has it valuated at a price far in excess of what you paid. Then you donate the item to a charity and receive a tax receipt for the inflated amount.
Many of these companies are currently legal, complete with tax shelter identification numbers issued by the federal government. But that doesn’t mean they’ll be around for long. The CRA has been going after such companies for several years, and they’re winning the battles. The CRA has rejected charitable donation receipts submitted by thousands of people who used these bogus tax shelters, and has shut down many of the promoters. Boufford stresses that tax shelters and philanthropy are completely separate activities, and he has straightforward advice about noble-sounding schemes that seem to good to be true: “Don’t touch them. You don’t get something for nothing.” At the very least, talk to a tax expert and a lawyer first.
Think twice before earmarking funds
Many donors ask charities to direct their donation to specific causes — after natural disasters, for example, they may stipulate that it go directly to programs in the affected area. “It’s been a real trend over the last 10 years or so,” Seale says. “I’ve seen a lot more designated giving, and it’s something charities have to be able to accommodate.” The problem with earmarked funds, however, is that they don’t necessarily go where they’re most needed. After the 2004 tsunami in Asia, for example, the Red Cross received far more money than it needed to run its relief programs, and much of the excess could have helped more people in different parts of the world. (Doctors Without Borders, which found itself in the same predicament, asked donors for permission to redirect the excess, and actually gave some of the money back.) “If you have programs that are really important but they just aren’t very sexy, or they’re complicated to explain, then it can be hard to raise designated money for them,” Seale points out. If you trust an organization and believe in its work, you’ll help it more by allowing it to judge how to best spend your money.
Dan Bortolotti is the author of Hope in Hell: Inside the World of Doctors Without Borders, and has reported on the Canadian Red Cross’s tsunami relief work in Sri Lanka.
This article originally appeared in the November 2007 issue of More
