Rights & Money

Making the Most of Your Donations

Planning your charitable giving can produce a better result for both you and those you want to support 

By Olev Edur


Even when times are tough, seniors are this country’s biggest benefactors. A study released in 2023 by Statistics Canada found that in 2021, almost five million donors gave more than $11.8 billion to charity. Thirty-four per cent of these donors were aged 65-plus, despite constituting little more than a quarter of the adult population, and their average annual donation of $3,310 was almost 50 per cent higher than that of the 55-to-64 age group ($2,360) and that of those 45 to 54 ($2,230). Younger people, of course, gave considerably less. 

In addition, a study by Edmonton-based Sage Seniors Association found that more than one-third (36 per cent) of Canadians aged 65-plus are volunteers, devoting on average 223 hours a year—the equivalent of at least five and a half weeks of full-time work. “In market terms, the economic value of older adults’ volunteer contributions amount to more than $5 billion annually,” the study concluded. 

Nevertheless, the past few years have become increasingly difficult for all donors, seniors included. In its 2023 Giving Report, CanadaHelps, a “charity of charities” that connects charities and donors and has facilitated more than $2 billion in donations in its 23 years of operation, cautioned that 2023 was “a year defined by inflation” that intensified “long-standing threats to the [charitable] sector.” The report went on to state: “The rising cost of living and prolonged impacts from the pandemic have more Canadians in need of charitable services. At the same time, fewer Canadians are making charitable donations.” 

So, while seniors have remained the mainstay of the sector, some have been feeling the pinch, too, and while they continue to contribute, it may benefit them now to opt for the most effective ways of making those contributions. Fortunately, there are a few tools for boosting the value of whatever they can offer. 

Donor-Advised Funds (DAFs)

When it comes to cash offerings, you may be able to magnify the benefits through the use of what’s called a “donor-advised fund” (DAF). These arrangements can be made through most financial institutions and advisers. 

While there are many variations, DAFs basically involve putting money into the fund and investing it; then the investment income, and perhaps some of the principal, is doled out yearly as grants to the charities you select. 

“When you make this kind of donation, it can benefit the charity more over the long term because it can continue into perpetuity,” says Jacqueline Power, assistant vice-president of tax and estate planning at Mackenzie Investments in Toronto. She adds that the charity must be registered with Canada Revenue Agency (CRA). (For a list of eligible charities, see the CRA web page. You get a tax receipt for all donations to the DAF.) 

You can choose any charity or charities you want and how much they should get each year, and you can change the terms from year to year. “We generally recommend that you set up standing instructions, but you can switch annually—DAFs are really very flexible,” Power says. “You can arrange for only the income to be granted each year or a percentage of the fund assets—five per cent is quite common. Or you could allow the fund to grow and then make larger grants over time.” 

You also can donate securities “in kind,” meaning that you don’t need to cash them in first. You get a tax credit for the full market value, and an added bonus here is that any gains that have accrued up to the date of donation aren’t subject to tax. “The tax on donated securities will be zero,” Power says. 

Charitable Remainder Trusts

If you want to give but are concerned that doing so will leave you short, you might want to consider a charitable remainder trust (CRT). In these arrangements, you contribute to the trust, the money is invested, and for the remainder of your life, the income earned by the investments goes to you; when you die, whatever is left goes to the charity. As with DAFs, your contributions merit a tax receipt, as long as the designated charity is CRA-approved. 

The income you receive from the trust will, however, be taxable, and while you could contribute securities in kind, as with the DAF, you’ll have to pay tax on any profits accrued up to the date of the donation, unlike as with the DAF. “These arrangements are very common in the US but not so much in Canada,” Power says, adding that there is much less incentive to make in-kind donations with these arrangements. 

Maximizing the Tax Benefits

However you choose to give, you should be aware of the tax rules regarding charitable donations, so that you can use them to greatest advantage. For example, your tax credit (line 34900 of your tax return) on the first $200 donated is accorded the equivalent of the lowest marginal tax rate (15 per cent federally, plus the appropriate provincial rate, ranging from four to 20 per cent), while any further contributions are accorded the highest rate of 29 per cent federally (and 33 per cent to the extent of your income in excess of about $235,000 for 2023) plus the provincial rate (ranging from 11.5 to 24 per cent).  

You can carry donations forward up to five years, so it can make sense to accumulate more than one year’s worth and contribution them together. You may also be able to claim any unused donations made by your spouse during the past five years, although the maximum you can donate is 75 per cent of your net income for the year (with certain rare exceptions).  

Choosing the Right Charities

Regardless of how you choose to give, you may want to do some research, because not all charities are alike when it comes to their impact. Many charities, for example, spend a considerable amount on administration and promotion, and there have been instances in the past in which expenses exceeded revenues, meaning nobody but the promoters benefited. You may have your favoured local charities, such as churches or community organizations, and that’s great because you probably know what they provide. But if you are looking further afield and want the biggest bang for your buck, you should do your research before giving. 

For starters, as noted above, make sure the charity is CRA-approved. If you want to find charities that have the greatest impact in their fields, take a look at the Charity Intelligence Canada website. The charitable organization uses a five-element rating system to determine how effective a charity is at achieving its stated intentions. 


Finally, many seniors volunteer, and this doesn’t cost anything (other than perhaps transportation). Meanwhile, demand has been rising. As a result, those who have difficulty giving money may want to give of their time instead. As for where you might find need for your help, the Sage Seniors Association found the following: 

“Older adults give more hours on average to religious and social service organizations and hospitals than [do] younger volunteers. They also spend considerable time doing administrative work, providing health care and support, and canvassing. For example, some volunteer as unpaid board or committee members; some canvass, fundraise, or lobby for charities and other non-profit organizations; and some support others by tutoring or mentoring local children in daycares and schools, preparing and delivering food to shut-ins, and even preparing tax returns.”