While it may be the season for giving, clients who are looking to contribute to charity before the new year can look forward to getting a little back on their 2010 tax return.

Charitable donations made before December 31 produce credits towards 2010 tax filings.

And with more than 85,000 registered charities in Canada to lend your support to, many of which offer the convenience of online donations and automatically generated tax receipts sent straight to your e-mail inbox, giving is easier than it has ever been.

Jamie Golombek, managing director, CIBC Tax and Estate Planning. offers the following guide to help Canadians give strategically this December as it’s possible to be both philanthropic and tax-efficient.

> The tax value of a donation
Canadians who donate to registered charities before December 31 are eligible to claim tax credits for the year equal to a maximum of 75% of total net income for 2010. A non-refundable federal tax credit of 15% for 2010 is granted for the first $200 of donations claimed, while all donations beyond the first $200 will be eligible for a 29% credit. Additional provincial credits boost the savings even higher.

> Gifting appreciated securities
Donating publicly traded securities, mutual funds or segregated funds with accrued capital gains to a registered charity not only entitles your client to a tax receipt for the fair market value of the security or fund being donated but eliminates any capital gains tax as well.

> Sharing donations between spouses
A donation receipt in the name of one spouse or partner can be used by either partner, allowing spouses to pool their donations together to take advantage of the higher threshold credit rate and possibly provide surtax savings, depending on the province.

> Timing your claim for maximum efficiency
Unused donations made in 2010 but not claimed in 2010 can be carried forward for up to five years and used against tax owing in those years as well.

> Establish a donor-advised fund
Donor advised funds (DAFs) essentially piggyback on public foundations, such as community foundations, by permitting you to create a “mini-foundation” as a subset of the larger, public foundation. Just because the donor gets the tax benefit today, however, doesn’t mean that the entire amount donated has to immediately go to a registered charity. The funds can grow inside the DAF tax-free and each year the donr can recommend distributions to be made annually from the DAF to registered charities of the donor’s choice. The funds inside the DAF are pooled together with all other donors’ funds and are invested by professional money managers. Perhaps the biggest advantage, however, is that donors, unlike setting up a private foundation, don’t have to worry about any administrative details or record keeping, as this is all done by the DAF.

Golombek suggests advisors discuss incorporating giving into a client’s overall financial plan. “It’s important to devise a tax-efficient giving strategy that helps you support the causes that matter to you while reducing taxes where possible,” he says.

To confirm the registration status of a charity, visit the Canada Revenue Agency website which offers a searchable list of Canadian charities.

IE